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Magazine Cover Story

*Trend Setting

**Executive Interview**

***Mark Phlieger was among the first to evangelize on behalf of Web-based computing when he launched Avista Solutions. Now his thinking has gone mainstream. The trendsetting company celebrates its 10th anniversary. Avista celebrated other milestones and added a record 37 new customers in 2010, comprising 20 community banks, totaling $12 billion in assets, 10 credit unions and seven independent mortgage bankers. On March 25, 2011 there were 63,000 active B2B user accounts across Avista’s customer base.

****Other milestones include Avista relocating its corporate headquarters to Charleston, South Carolina in July 2010, a city that Phlieger said offers much support for the technology industry and cultivates high quality talent. Since signing on its first customer in 2001, Avista Solutions has: processed more than 100,000 loan applications in one month, reached a 28-day implementation time record. Mark Phlieger talked to us about what happens next now that the Web has gone mainstream.

****Q: As we see more institutions with depositories like community banks and credit unions enter the mortgage space, are you noticing that the bulk of your new clients are these types of institutions?

****MARK PHLIEGER: Yes, absolutely. We signed five banks this month. The market has shifted to depositories doing lending. What we’re seeing is mortgage bankers combining with these depositories. Also, it’s important to remember that banks are heavily audited, so when we talk about the differences between a bank and a mortgage banker, the banks are heavily accustomed to regulation. That is not an insult to the mortgage banker, it’s just that the banks are more used to being under regulatory scrutiny.

In terms of the sales cycle, they are longer these days. How long? Credit unions have the longest cycle, banks are in the middle and the mortgage banker is the shortest. We love dealing with community banks and credit unions.

****Q: Recently the MBA revised down its origination volume projection for next year. Originations are expected to be at their lowest point in 15 years. How do lenders and vendors survive this market?

****MARK PHLIEGER: Less volume means that we have to sign more customers. We are signing four or five a month, but hope to move that up to seven or eight as volume falls. Right now our largest customer is only 4% of our revenue. Our goal is to have a lot of customers in the small and mistier market.

There’s a general attitude that there is rapid change going on that we have to deal with. Banks know that they have to generate fee income to make up for other revenue that they’re losing, which is driving them into the mortgage market. They also don’t want to invest in legacy technology where they have to invest in a heavy IT staff, servers, Citrix, etc. They want to plug and play. They want to go out and find their people and just turn on the technology. We’ve grown a lot in this down market because of our cloud-based model. They also like the all-in-one solution. They don’t want to deal with 10 different solutions.

****Q: Avista celebrated its 10th anniversary this year. How has the mortgage industry changed in 10 years?

****MARK PHLIEGER: I had more hair and I weighed a lot less when we started Avista. Honestly, it used to be more go-go. It was all about volume, but now it’s about quality and compliance. It’s changed a good bit. There is a lot of opportunity for vendors that are interested in innovation and offering a top-quality tool. You want leading-edge technology so you are where the client wants to go. These days we talk about mobile and cloud-based solutions. Your technology has to solve the problems of your client. For technology like that, I think there will always be opportunity.

****Q: Avista was among the first, if not the first, company to come out with a completely Web-based solution. Now it seems like the market is where you were 10 years ago. How does that feel?

****MARK PHLIEGER: It’s nice to see. We were cloud-based before cloud-based was cool. We’ve been Web-based on Day One. Over the years it has gotten easier with Google and Amazon setting the bar for cloud-based products. We don’t have to evangelize as much. On the downside, there is more competition, but that’s ok because mortgage bankers are going to pick the product that best fits their needs. They want anytime, anywhere access. Just like we made the transition to everything Web, the next transition is to everything mobile. The reality is that I read and consume all my information on my iPad. That’s where we’re going next.

****Q: What does it mean to be cloud based?

****MARK PHLIEGER: Simply put, it’s about delivery as a service instead of selling a product. Think about it this way, you don’t care where the power plant is as long as you plug in your iPhone and it gets charged. We handle infrastructure, platform, etc. Once you sign with us we take you through implementation and set everything up for the client instead of giving them a box and saying: Here you go. It’s a different model. We charge based on the closed loan instead of by the license. When the model is more like a lease instead of a license, there is an incentive for everyone to work together to make the business a success. You have to care.

****Q: There has been a lot of consolidation in the LOS space and that is likely to continue. Most recently we saw Ellie Mae acquire DataTrac. What do you think about LOS consolidation?

****MARK PHLIEGER: This was predicted and it will continue. The players that ran a desktop or client-server model will get consumed. This acquisition validates the cloud model. Speaking of Ellie Mae, you see in their quarterly reports that most of their revenue is coming from cloud-based products.

I believe there is a lot of opportunity to be independent and have a leading-edge platform. Avista is end-to-end and we’ve built everything. So we can compete well with any other LOS. You need a solid infrastructure to support banks and credit unions. You can also be more nimble when you’re independent.

****Q: Avista also made headlines with its FHA Connection link earlier this year. How is that going?

****MARK PHLIEGER: We’ve always had clients that were heavy in FHA. We wanted to build a piece so that lenders doing FHA didn’t have to leave the platform. We’re committed to FHA and customers told us that this was important. FHA share remains substantial so we need to do everything we can to make it easier for our clients to originate an FHA loan. We’ve had a great response. We also enjoy working with FHA. FHA is very professional.

****Q: Continuing to talk about integrations, last year you did integrations with Kroll, Wolters Kluwer and Fannie Mae’s EarlyCheck. What is your integration strategy?

****MARK PHLIEGER: It’s based on what is required from a regulatory or delivery point of view. We also look to where we can get efficiency for customers. Lastly, it’s based on customer feedback. They tell us what companies they like to do business with. We put all that on the roadmap and partner with those companies. We will be live with UCDP within a month. It’s important to make sure that customers have what they need. Integrations are also almost done with Genworth and LogicEase from ComplianceEase. You touched on Wolters Kluwer. We were the first end-to-end product to offer their Expere product. You’ll see more closing doc integrations.

****Q: You talked about signing a record number of new clients last year. How is this year shaping up?

****MARK PHLIEGER: It’s solid. We will best last year in terms of the total overall number of customers signed up and the total value of the contracts signed this year is larger as compared to last year. It is competitive, but we’re seeing opportunity. It’s important to understand what banks and credit unions have to do from a compliance standpoint. It’s intense because they will make sure the vendor complies, but that’s ok for us. We do well up against due diligence scrutiny.

****Q: So, what does the next-generation LOS look like to you?

****MARK PHLIEGER: It’s about more access. People may be coming in from desktops, laptops, tablets, etc. In my opinion, the system also needs to be end-to-end and all-in-one. There is a focus on data quality. You need a common database and consistent process flow. It also has to be quick. The services also have to be baked in like credit, flood, compliance, fraud checks. Everything has to be based on Web services and MISMO XML to get that efficiency. We are a big MISMO supporter. It has been huge for us to reuse code to connect to more services. It’s about technology and customer service coming together. You also need 24/7 access, redundant data centers and thinking through the whole mortgage model.

****Q: How would you define the state of innovation in the mortgage space today?

****MARK PHLIEGER: I like change, but across the industry I’m not sure that’s the case. If the vendor wants to be relevant you have to innovate to solve real business problems. You also need to have an A team to go in and consult with customers. In a transactional model you want to help your clients adopt the technology. You have to go into every client shop to make sure that they are using every feature. You can’t rest on your laurels. In a cloud model we’re not shipping disks so we can roll out new features instantaneously, but we have to educate our clients about all that’s possible. In this market, that’s a big deal.

****INDUSTRY PREDICTIONS:

****Mark Phlieger thinks:

****1. You will continue to see expansion in vendors providing a cloud-based, all-in-one model.

****2. Mobile applications will continue to explode. People want information anywhere, anytime.

****3. Compliance and data quality will continue to be a focus, as it should, in mortgage lending going forward.

****ABOUT MAK PHLIEGER: Mark Phlieger is president and CEO of Avista Solutions, the Charleston, South Carolina- based creator of all-channel, Web-based loan origination systems. Co-founding the company in 2001, Mark has led Avista since its inception and has an impressive record of achievement in pioneering and development in the mortgage technology space. Mark was a team member on the Fannie Mae project that developed the groundbreaking technologies of Desktop Underwriter and Desktop Originator and later became responsible for their implementation and adoption as the industry standard among Fannie Mae lenders.

*****http://www.progressinlending.com/TME0911/TME0911-39.pdf*****

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Progress In Lending
The Place For Thought Leaders And Visionaries

Magazine Cover Story

*Looking To The Future*

**Executive Interview**

***Nancy Alley is not new to the mortgage space. She has been around the block. However, now she has a big company in Xerox Mortgage Services to shepherd. What does she bring to the table? Well, if Nancy’s history is any indication, she is ready to help struggling lenders forced to deal with decreasing volume and increasing regulation move their business to the next level.

****Back in the late 1990s Nancy co-founded a company that offered electronic signatures and electronic vaulting to the mortgage space. This technology is just now gaining its footing, but Nancy was there from the start evangelizing and doing her part to move the industry forward. She’ll bring that pioneering spirit to XMS. Here’s her take on the future of XMS and the mortgage industry:

****Q: For a lot of people, imaging and paperless are synonymous. What’s your take on how the definition of paperless has changed in the past five years?

****NANCY ALLEY: When you think about paperless and take a step back, it was really just about getting rid of paper five years ago. We are in a very paper-intensive industry. So, paperless started with just replacing paper. What did that mean at the time? People started scanning documents and it was limited to a few departments within the lender shop. I would argue that paperless is so much more. You can now manage, share and collaborate on images and electronic documents. Further, as we go into the future you’ll be able to manage, share and collaborate using data. We’re moving along this evolutionary path. We are not talking about how you get rid of paper with our clients because most have done that already. Now we’re talking about electronic collaboration. When you think about collaboration, it has to bust outside of the lender’s walls. It can’t just be internal. It has to be cradle to grave. That’s my vision.

****Q: Do you think the UMDP initiatives are going to help or hurt the industry?

****NANCY ALLEY: This is a hot topic. In the past couple of years, this industry has seen huge change. Change is always painful at first, but I’m a big supporter of these initiatives because they will push this industry to the next level. How? These initiatives will drive paperless adoption and true electronic collaboration. This forces us to go even further and move away from being document centric to being data centric. Right now lenders have data in different systems, but they may not talk to each other and that data may be in different formats. That now changes. To have the transparency to truly analyze everything that we’re doing is key. I think this makes that possible.

The other positive piece that is not specific to UMDP, but relates to UMDP, is that UMDP mandates the use of MISMO data standards. That’s a good thing. Historically we have always had proprietary systems and data formats that don’t talk to each other. So, we do have to get over the pain of change, but once we get passed that as an industry, this will be a great thing.

****Q: Let’s talk about you for a bit. You recently were named the GM of Xerox Mortgage Services. What are your plans for Xerox Mortgage Services?

****NANCY ALLEY: I’m excited to accept this position. I would have never agreed to do this if I didn’t think we had bright days ahead. Greg Smith coined a lot of phrases, but before he left he used to say that we don’t skate to where the hockey puck is now, we skate to where the puck is going. I agree with his philosophy. That’s what we’re going to do. We are going to skate toward the future. The future is about data. Part of what we’ll be doing is becoming more data centric so our clients can collaborate based on data and not just documents.

Also, the XMS Network is very important. The network is central to my vision for XMS going forward. You don’t want to limit yourself to a solution in your walls, you want to communicate out in a seamless way. That’s how you drive true ROI.

****Q: As the founder of what was Advectis and the BlitzDocs product, we all know what Greg Smith brought to the table, but what does Nancy Alley bring to the table? How is XMS going to be different under Nancy Alley?

****NANCY ALLEY: If you look at how Greg grew the company, you go back to the evolution of paperless. He did an amazing job of getting lenders to go paperless. I believe that one of the reasons Greg hired me was because of my tireless dedication to driving the e-mortgage. I am going to steer XMS down that road. I am going to make sure our clients have a roadmap to get to the full e-mortgage.

I also lead the efforts with BlitzDocs XE. My expertise around e-vaults has already shown itself within our product offering. I think Greg letting me develop XE was a test to see what I would do with his baby. We are going to continue to build that out.

****Q: Next year is the five-year anniversary of Advectis being acquired by Xerox. How has Xerox Mortgage Services leveraged its relationship with Xerox and its sister companies?

****NANCY ALLEY: Advectis was the original company. They had a great solution and great people. None of that has changed. However, we can now leverage Xerox so we can integrate services that we couldn’t provide PRIOR. For example, the goal of XE is to fulfill electronically, but we don’t live in a perfect world. If the customer opts out we can seamlessly deliver the package through the mail in paper form. We also see a lot of demand for business process outsourcing. We can offer that and work on the file to do things like data extraction. At our fingertips we have all these other entities that we can leverage.

****Q: The MBA predicts the loan volume to drop off significantly in Q4. How can lenders use technology to survive?

****NANCY ALLEY: If we in the mortgage industry have proven anything in the last few years, it’s that we’re a tough bunch. I have no doubt that the industry will survive, but we have to be more flexible, which is where technology comes in. Lenders need to be looking at solutions that drive automation and collaboration. As volume drops off you need to figure out how you’re going to make money. The solution also has to be flexible because volume changes. One thing to look at is volume-based pricing to tie costs with your volume. As an industry we can’t stop innovating, but when you buy technology you need to make sure that it goes cradle to grave and improves the whole process. Nobody can afford to do big pilots, they need technology that will improve their process now that can solve their problems. To this end, the technology should be able to manage exceptions and be agile. As volume dips, that’s where you get revenue and ROI.

****Q: What is the state of the industry and where do you see it going?

****NANCY ALLEY: We all read the papers and watch the news, there’s still a tremendous amount of uncertainty. As volumes drop we are warned that volumes will drop further. We’re also told that interest rates will increase. I don’t see light at the end of the tunnel, but it’s not all bad news. Lenders are getting comfortable working in these tight conditions.

Getting more granular, I like where we’re going in terms of the data requirements. I hope this is the push we need so we can effectively and transparently share and collaborate on docs and data. We are a member of MISMO and I’m excited about MISMO acceptance. The more we can share data and collaborate based on data, the better the industry will become.

****Q: With the rise in regulations and changing market dynamics, what are lenders’ biggest pain points and how are they leveraging technology to overcome them?

****NANCY ALLEY: Lenders struggle with the constant flow of new rules. There are always new rules being thrown at them. The politicians are always thinking of something new. Lenders are now worried about UMDP. Are they ready? Are their appraisals in the right format? Will they be able to send to the GSEs in the right format? That’s just one example. As I look at that pain points, that’s why you need to leverage your vendor. Your vendor has to make sure that you’re ready. So, lenders need to continue to use technology and expect that their vendor partners to step up to help them navigate these new rules.

****Q: Last question: How would you define the state of innovation in the mortgage industry today?

****NANCY ALLEY: As a technology provider we always want people to be proactive, but it’s a balancing act for lenders. During difficult times you are forced to look at how you do things, how you can do things better, and you’re forced to innovate. We are looking at how we can assess the market and provide a tool that solves business problems. Having said that, you can’t innovate just to innovate, you have to innovate to improve what you’re doing. For example, you may be innovating by providing electronic signatures on disclosures. That’s great, but you need to do that with all your disclosures, for all your loan types, with all your borrowers. So, we need to innovate, but we need to innovate comprehensively.

****INDUSTRY PREDICTIONS:

****Nancy Alley thinks:

****1. Lenders will spend their technology dollars on comprehensive solutions that can easily and seamlessly manage exceptions.

****2. The definition of paperless will progress from basic imaging capabilities to the ability to collaborate on documents and data from cradle to grave.

****3. Lenders will no longer define all-in-one, or end-to-end, by the software system they use, but rather by the extent of their vendor’s reach to other partners throughout the mortgage lifecycle.

****ABOUT NANCY ALLEY: Nancy Alley brings more than 20 years of financial services and mortgage industry experience to her role as the vice president and general manager for Xerox Mortgage Services. In her previous role as vice president of product management for Xerox Mortgage Services, Alley managed the company’s document collaboration solutions, BlitzDocs and BlitzDocs eXtended Edition. Alley also previously led the product management and engineering efforts of eSignSystems, a leading eSign and eVaulting provider; and spent eight years at GE Capital Corporation developing her product management and business development skills in the mortgage banking technology area.

*****http://www.progressinlending.com/TME0811/TME0811-31.pdf*****

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Progress In Lending
The Place For Thought Leaders And Visionaries

Magazine Cover Story

*Innovate to Solve Real Problems*

**Executive Interview**

***Certainly the tidal wave of foreclosures is overwhelming. How do servicers keep up? How do technology vendors keep up? Everyone is forced to keep up. However, in the midst of the deepest chaos, there is opportunity for innovation to take over. As such, companies like IndiSoft were born. IndiSoft is a technology development company that develops, licenses and supports the Software as a Service model for default servicing in the financial services industry. The company’s flagship product, RxOffice Legal is a collaborative platform that helps companies create efficiencies throughout the default life cycle, including loan modifications, short sales, deed-in-lieu, foreclosure, bankruptcy and REO management.

****Sanjeev Dahiwadkar, President and CEO at IndiSoft, is a true entrepreneur. He’s a glass-half-full kind of guy. Going forward he’ll share his ideas on how we as an industry can put this market chaos to an end and move closer to recovery.

****Q: How has the mortgage market evolved over the past two years after the crash?

****SANJEEV DAHIWADKAR: If I can say one thing, it is that there is a need for transparency and a need to measure quality, both internal and among external partners. That is a common theme. We’ve seen an evolution in our space over the past three years. I see three basic needs, connecting in real time, the need to measure the success of your outcome and transparency. Every regulator, investor, servicer, etc. is talking about implementing new processes and policies to know the facts. Trust and confidence has been lost so the last three years have been all about making every step of the process both more transparent and measurable.

****Q: How has IndiSoft evolved with the market?

****SANJEEV DAHIWADKAR: IndiSoft has totally changed. If you talked to me the day I opened IndiSoft, I would have told you that we were going to be the greatest technology consulting company in the market. What happened? The market collapsed, so we seized that opportunity to become a great product company. Right now we are totally product based instead of operating as a consulting company.

At the same time though, we have not lost that consulting component entirely, which is why we acquired Microteck. We want to maintain a consulting arm, which was the driver behind that acquisition.

****Q: For those people that don’t know about Microteck or how that adds to your offering, what do you say to them?

****SANJEEV DAHIWADKAR: Microteck is a consulting company that works on specialized applications, such as Oracle, for example. Those specialized tools that our clients need can now be delivered to them. We at IndiSoft offer specific products that talk to specific parts of our customers’ businesses. Our clients have a need for other specialized applications that we at IndiSoft couldn’t deliver, so Microteck fills that need. Now we can enter new markets that we previously ignored because it went out of our realm. Microteck will add complimentary services to allow us to offer talent and technology on demand.

****Q: Are you in acquisition mode? Are there other acquisitions in the works?

****SANJEEV DAHIWADKAR: We are looking at additional companies. We are in acquisition mode. We want to expand our footprint in a strategic way. Initially we relied on organic growth, but now we will also expand through acquisition. However, we want to expand in a smart way that makes our core foundation even stronger.

****Q: Describe to me what a future acquisition might look like? Are you going to buy an LOS, another technology consulting firm, specialty service providers? What are you looking at?

****SANJEEV DAHIWADKAR: Our primary focus will remain on the technology side. We will look at acquisitions that fill any gaps that we have. We want to stay ahead of others. We believe in leading by innovation. Any acquisition that can help us provide efficiency through technology will be our main focus this year and next year.

****Q: You say that you want to lead in terms of innovation. Explain to my readers what you mean by innovation exactly?

****SANJEEV DAHIWADKAR: We want to enable collaboration among all stakeholders. We used technology to enable collaboration even when the stakeholders had conflicting goals. Everybody claims to connect parties, but nobody connects as many parties as we do in real time. We have to all work together toward a common goal even if we have different ideas. We make that happen.

Also, you want to ensure efficiency and transparency. Efficiency and transparency that is measurable is a byproduct of our technology. Centralized case management integrated with documents and workflow is critical. All of that needs to be smooth and delivered from one application. Our integrations are so tight that it is seamless to our clients. Now everybody is talking about how their default platform is collaborative. We started that a couple of years ago.

****Q: From a product perspective, what’s next?

****SANJEEV DAHIWADKAR: We have not made this public, but we launched an auditing tool to allow our clients to do compliance validation and documentation. We are providing a clean way to document every piece of the process. Today you need to document your process and prove that certain steps were taken. Right now that tool is in use at one of our larger clients.

****Q: You also recently started ITShastra. Explain why/

****SANJEEV DAHIWADKAR: That is our development center in India. Any development work for clients that want outsource services goes through ITShastra. We have clients throughout the world that need development on different platforms like Java, .NET, etc. So, we have different groups working on technology in different verticals like health care, we helped launch some Hollywood movies, bioengineering, etc. We’ve done unique work in different verticals through ITShastra.

****Q: You’ve used market conditions to innovate yourself, but what advice do you give servicers and other technology providers that have been burdened by market conditions?

****SANJEEV DAHIWADKAR: From the user’s perspective, it is challenging out there. The market changes daily. One week we hear that home prices are going up and the market is coming back and the next day they say recovery won’t happen until 2014. Servicers have to stay focused. Servicers need to lean on technology to get better control over their process. It’s a new world and servicers have to take charge. They have to use technology to achieve their business goals and at the same time be as efficient and transparent as possible.

For vendors, they have to meet demand. They need to be able to tweak their technology so their users can rely on them. Servicers have to get things done. They can’t afford to go with a technology that’s old or unable to change with the market.

****Q: Shifting to market conditions, many say HAMP has been unsuccessful and the government has to revise its approach to dealing with foreclosures. What’s your take?

****SANJEEV DAHIWADKAR: I wish I knew the answer. What I can say is that the government is trying their level best. Has everything worked with a level of satisfaction? No. However, that doesn’t mean that real effort isn’t being made. There is no silver bullet. Now everyone is trying new things. It’s about trial and error. We have to acknowledge what didn’t work and try something new. There is an openness now and that will lead us out of this chaos.

****Q: We’ve also seen the government crack down harder on servicers with sanctions. Is that needed?

****SANJEEV DAHIWADKAR: The issue is very complex and above my pay-scale. Everybody wants accountability. There will be compromise. I’m curious to see where it goes and how it all turns out myself. We’ll have to see.

****Q: Back to innovation. What will be the next great market innovation in your opinion?

****SANJEEV DAHIWADKAR: The less we talk about technology, the better. The more transparent the technology becomes in that it can be easily used by the business user, the better. Going forward, you’ll see more and more people talk about getting control of their business using technology that is easy to use. It’s about crafting what I will call invisible technology.

****INDUSTRY PREDICTIONS:
****Sanjeev Dahiwadkar thinks:

****1. Tighten your belt. We’re on a roller coaster ride that isn’t over yet.

****2. You will see the consolidation and elimination of assistance programs.

****3. Technology will play a larger role in terms of promoting efficiency.

****ABOUT SANJEEV DAHIWADKAR: Sanjeev Dahiwadkar is president and CEO of IndiSoft LLC, a Columbia, Md.-based software development company for the default servicing industry. Dahiwadkar, a true entrepreneur and an expert in the design and delivery of cost-effective, high-performance information technology infrastructures and applications to address complex business problems, has a proven track record in the large default servicing banks, small business e-commerce solutions and work flow efficiencies in several business verticals. Additionally, he has developed three patent-pending products and continues to innovate.

*****http://www.progressinlending.com/TME0711/TME0711-33.pdf*****

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Progress In Lending
The Place For Thought Leaders And Visionaries

Magazine Cover Story

*New Business Opportunity*

**Executive Interview**

***We all know that origination volume is predicted

to decline by 40% this year. More and more

lenders are turning to retail for means of

oversight and quality control. So, if lenders are doing

more to get their hands on less volume in a world

mired with more and new regulation, how can

they do that effectively? Surely automation has

to be part of the answer.

****Beyond technology, lenders have to do a better

job of cultivating relationships with new and

existing borrowers. Stephen and Judy Margrett

of The Turning Point turn this dilemma into a

competitive advantage for lenders. They share

their thoughts on how you can take advantage of

new market
dynamics here:

****Q: When people think of
automation to win the

battle
for the borrower they think of CRM, but

how
do you define CRM? And how is that different

from
what your company offers?

****STEPHEN MARGRETT: You
define CRM

with
great difficulty. You could ask

100
people that question and get 100

different
answers. CRM is fundamentally

about
managing and enhancing

business
relationships.

A
lot of people in the mortgage

space
see it as a list where you tell the

system
something about each person in

that
list and enter a command for the

system
to take certain actions as it pertains

to
those people in the list. That’s

great,
but it doesn’t do anything for

compliance.

We
offer CRM embedded in a more

powerful
context. What do I mean by

power?
The system uses business rules

that
helps the user identify an opportunity.

The
system goes on and executes

to
address that opportunity. The user

does
nothing.

The
other dimension is that in today’s

mortgage
market it is too dangerous to

let
loan officers just go off and do their

own
thing. There has to be corporate

oversight.
We allow our companies to

set
permissions and we provide real-time

audits,
as well.

Compliance
is almost the only word

that
matters in the mortgage industry today.

We
offer a compliance-centric marketing

tool
that is fully automated.

****JUDY MARGRETT: CRM has
come to be

known
in the mortgage industry as a

data
management or a contact management

tool.
It holds information about a

customer
that you can view and use to

reach
out to those contacts in the future.

We
say that you need mortgage-specific

CRM.

What
does that mean? Everything is

integrated
with mortgage rules. The system

reads
data, understands that data and

knows
what functions to do next. All of

that
is surrounded by accountability, control

and
compliance. The system tells you

who
can say what and what they can say.

In
contact management systems you

can’t
hold graphics and html and have

everything
dynamically come together

with
the right LO, with the right state

disclaimer,
etc. Those platforms are one

dimensional.
So, many lenders will build

other
functionality on top of this system

to
do all that they need it to do.

In
our system it can feed data from

any
system, hold all the graphics, permissions

and
legal procedures, and communicate

all
that out to the lender and the

borrower.

Mortgage-specific
CRM needs to

dynamically
deliver for your institution

so
you get that business.

****Q:
This all boils down to helping lenders get

new
business. What do lenders have to do differently

today
to get new business?

****JUDY MARGETT: Historically
we had a lot

of
different loan products to choose

from.
Anyone could get a loan and there

weren’t
many restrictions.

However,
the smarter bankers and

lenders
always placed an emphasis on

customer
retention. The battle for the

borrower
has changed because the market

has
shrunk.

What
do I mean? There aren’t as

many
loan products or qualified borrowers,

so
you better hold on to as many existing

borrowers
as possible. You have to

nurture
loyalty and referrals.

The
lender that wins will be constantly

communicating
with the customer,

but
they’ll also be controlling that

communication.

****STEPHEN MARGRETT: Mortgage
did not look

on
marketing as significant and life was

easy
when the boom was going on. You

could
always make a good living in the

mortgage
industry.

What
has most fundamentally

changed
is that we are back to a place

where
it is much more difficult to find

and
keep a customer. You can’t leave this

to
loan originators anymore, you need

marketing
experts.

You
can’t win the battle for the borrower

by
brow-beating borrowers, you

have
to have good tools provided by

marketing
specialists.

****JUDY MARGETT: Lenders
also have to

deal
with a 60% attrition rate. There’s

awareness
that they need content control

and brand control.

They
need to know how their company

is
communicating to the borrower

and
what offers are being made. The environment

has
to be more controlled.

Further,
with new regulation lenders

have
to have a record of all their communication.

When
you can control and

automate
marketing you can ensure consistency

and
control.

You
can’t just offer originators tools

and
say, “Good luck, do what you need

to
do to bring more business.”

****Q:
So, how has your offering changed as the

demands
on lenders have changed?

****STEPHEN MARGRETT: The
vision is that there

are
three dimensions to the solution. You

need
to start with sales so loan officers

can
access solutions that help them do

their
job better.

Second,
you have a process dimension

that
links the opportunity to a

mechanism
that can take advantage of

that
opportunity.

Third,
you have the corporate dimension

so
all the players can all play

their
part and see what’s going on with

everyone
else. When you’ve done all that

where
do you go next?

We
will all be driven by our clients,

but
we are also driven by new regulation

coming
out of Washington, as well.

Further,
I predict that advances in

technology
like mobile will be significant.

We
have to take an interest in all

these
factors so that our clients don’t

have
to. My motto is: Give me more

data
and I’ll give you better quality

marketing.

We’ll
integrate with new data sources

to
make marketing more powerful.

We’ll
also integrate to various lead generation

players.

****JUDY MARGRETT: For
example, we integrate

to
various AVMs. Why is that important?

If
you’re going to make an offer to an existing

client
you need to know the value

of
their home. You don’t want to reach

out
to a borrower if you can’t make them

a
true offer.

Also,
in our library now we have

templates
for social media. The company

also
needs to control these types of

conversations.
You need to do things like

texting,
facebook or twitter. As technology

moves
on, lenders and technologists

have
to move.

You
have to drive your business in

new
areas all the time. You need to say

I
like that and have the tools to move on

that
new technology and still have all the

necessary
controls to ensure compliance

at
the same time.

****Q:
If you could leave our readers with one business

opportunity
tip, what would it be?

****STEPHEN MARGETT: The
tip that I would

share
is that you need to work with a

technology
solution that has as much

data
in it to alert you to opportunities that

you
may not be able to think up yourself.

You
need to realize that technology can

do a
lot of that thinking for you.

Further,
the technology needs to address

that
opportunity and execute. The

quality
and quantity of data will drive

that
level of automation and ultimately

help
you win the game.

****JUDY MARGRETT: You have to
use technology

to
automate and control your marketing.

If
your top 5 originators are doing

the
bulk of the business, you need to

automate
their activities.

The
technology should help them

deliver
communication in a consistent

way.
When you do that you are elevating

your
brand and all your LOs, not just a

few
at the top.

You
don’t want to lose personalization,

but
you want to drive brand consistency

and
better business back to the

point-of-sale.

How
do you do that? Reach out and

utilize
the technology that is now available

to
you.

****STEPHEN MARGETT: I
read an article entitled

“IT
Meets Marketing” and it was fascinating.

What
staggers me is that it was

treated
as something new.

The
fact is, I guess, that for most

people
it is something new. The notion

of
technology doing something for the

marketing
world is relatively new.

Why
is that? Because marketing

isn’t
defined. However, IT is finally coming

to
the aid of marketing. We all need

to
wake up to the fact that technology

sure can help.

****INDUSTRY
PREDICTIONS:

****Stephen Margrett
thinks:

****1. Customers won’t be beating a path to

lenders’
doors any longer: action will

be
required to drive them there.

****2. Marketing technology will come into

its
own as the only efficient means

to
implement and manage the required

action.

****3. Regulation will impose increasingly

stringent
compliance demands on all

aspects
of mortgage operations, including

marketing.

****INDUSTRY
PREDICTIONS:

****Judy Margrett
thinks:

****1. Mortgage lenders are looking for
technology

solutions
because technology

means
efficiency and every lender wants

to
be as efficient as possible.

****2. Lenders need to have more control and

oversight
over their business because

they
have no choice given new regulation.

****3. Lenders also recognize that their

operation
is too siloed and they are

looking
to bring their information together

in one location.

****ABOUT
STEPHEN MARGRETT: Stephen Margrett is CEO of The Turning Point, Inc.
The company’s

flagship
product is MACH3, a mortgage-specific CRM and automated

marketing
engine. With a master’s degree in consumer behavior

from the
University of Minnesota, Stephen has been in the field of

relationship
marketing for more than 25 years. In 1986, he created

Europe’s
first full-service, data-driven marketing agency and managed

it until
the mid-1990s, when he moved to the United States. He can be reached via e-mail

at stephen.margrett@turningpoint.com.

****ABOUT
JUDY MARGRETT: Judy Margrett is President of The Turning Point, Inc. The
company’s flagship

product is
MACH3, a mortgage-specific CRM and automated marketing

engine.
With more than 20 years’ experience in mortgage banking, Judy

was an
early advocate of technology-based marketing solutions, especially

for
nurturing key business relationships. Recognizing the demand

to
maximize resources within business enterprises, she works closely with

industry
leaders to guide The Turning Point’s development of advanced mortgage-specific

solutions. She can be
reached via e-mail at judy.margrett@turningpoint.com.

*****http://www.progressinlending.com/TME0611/TME0611-31.pdf*****

******15,32******

Progress In Lending
The Place For Thought Leaders And Visionaries

Magazine Cover Story

*The Course Forward*

**Executive Interview**

***Michael
Detwiler entered the

mortgage
market in the late

1990s
with one goal, to really

redefine
the conventional definition of a

loan
origination system. He turned the

standard
LOS concept on

its
ear and sought out to

build
what he coined an

enterprise
lending system or ELS. Over

the
past 10 years Mortgage Cadence

went
from being an LOS to a company

that
has five different products that

include
an LOS, doc prep, imaging,

loss
mitigation and compliance offering.

****The
company now automates forward

originations,
reverse origination and

servicing.
All of Michael’s hard work was

validated
when Monitor Clipper Partners

invested
in the company last

year.
With that investment

under
him, Michael is ready

to
once again do his part to reinvent the

mortgage
space for the better. He shares

his
insights on how Mortgage Cadence

and
others can help foster broad industry

recovery.

****Q:
With the extensive regulation requirements

taking hold of the origination industry, what will

lenders
need to do to better adapt?

****MICHAEL DETWILER: What
I see happening is

an
atmosphere of denial. What do I mean?

There
are a lot of lenders looking to the

past
saying, “I’ve never had to buy back

a
loan, I’ve never lost a license, I’ve never

seen
any penalties, so that eventuality is

not
going to happen in the future.” What

I
say to them is the historical context of

what
they have experienced is not indicative

of
what they could experience going

forward.

It’s
all about the data. We’ve been

preaching
about the data since 2005.

However,
we just started talking about

it
in 2005 even though that has been our

strategy
since 1999. What lenders are going

to
have to do is invest in technology

that
will enable them to support policy

that
is compliant. The system should stop

them
from making high-risk moves, or at

least
warn them when they are crossing

that
bridge. It’s also important for people

to
understand that systems that have been

siloed
like the LOS and the doc provider

will
need to come together. You’re going

to
see lenders wanting one system. Lenders

don’t
want to shoulder the burden

when
those two systems are not aligned.

****Q: Where will the opportunities lie for lenders

and
vendors in the coming year?

****MICHAEL DETWILER: Studies
show that lenders

will
spend 15% more on technology

this
year as compared to last year. I don’t

agree
that origination volume will be under

$1
trillion this. That statistic does not

take
into account the prime-jumbo market

that
I think will come back. I’m looking

more
at $1.4 trillion this year. Vendors

like
us need to drive home the message of

data
validation and compliance in a core

system
that also extends to documents. I

also
think there’s opportunity for lenders

to
do more with imaging when it comes to

OCR
and data extraction.

Lenders
ask us how your system can

help
me stay compliant, how do your documents

help
me stay compliant and how

does
your imaging allow me to streamline

the
process? There’s a lot of opportunity

there.
As a result of market conditions,

lenders
will move to consumer direct.

Lenders
want to control their own destiny.

Lenders
will look to better connect

to
their borrower using technology, cross

selling,
etc.

****Q:
What new products do you believe will

be
introduced based on the requirements of

consumers?

****MICHAEL DETWILER: In
our case, we are expanding

our
consumer-direct functionality.

You’ll
also see more Web-enabled

applications
that are accessible through

a
smart phone. When you talk about

things
like e-delivery and e-sign, people

will
want to review and do those tasks on

their
phone. Lenders will embrace mobile

technology
and social media, as a result.

These
two hot areas of technology are

coming
together and lenders are moving

to
adopt.

****Q:
Mortgage Cadence also automates reverse

mortgages.
Will the reverse industry see a turnaround

any
time soon?

****MICHAEL DETWILER: The
big issue with reverse

is
valuation. The reverse market

is
based on equity. As far as the macroeconomics

go,
valuation is key. So, it’s a

complicated
question. When are the macroeconomics

in
the United States going to

come
together so the banks are confident

that
we’ve reached the bottom? You do

see
pockets of stabilization, but there still

isn’t
overall confidence. Until that issue is

resolved,
reverse will be impacted.

By
the same token, you are seeing

more
and more baby boomers retiring.

For
those baby boomers that lost out in

terms
of their investments, reverse will be

a
big part of their retirement. The short

answer
is we need valuations to stabilize

and
more education about the product.

But
reverse will be a big market going

forward
as we have more retirees take

that
step.

****Q:
With all the talk about how HAMP is a failure,

do
you believe loan modifications will be around

much
longer?

****MICHAEL DETWILER: Another
interesting

question.
You have empty homes on every

block.
In most cases, those houses

have
not gone to foreclosure, but they

haven’t
been modified either, and in some

cases
are still occupied. Short sales have

also
not taken off the way most expected.

You’ll see more
programs by the Fed

sponsored
by investors that include principal

forgiveness.

I’ll
give you an example. If you’re in

a
home, you’ve gotten notice of default,

you
owe $300,000 on your home, your

neighbor’s
home was a short sale for

$200,000
and the house down the street

went
into foreclosure and got picked up

for
$150,000, well if you get an offer from

a
servicer to mod into a 40-year fixed rate

loan
at $300,000 the borrower won’t do

that
because they know their house is not

worth
$300,000. So, there are challenges

getting
people into a mod, but the servicer

doesn’t
want to evict. However, you are

not
going to get buy-in on a mod at the

market
value of years past.

We
just got an RFP from a servicer

that
does not expect that their mods will

peek
until next year and won’t ramp down

until
2014. So, mods aren’t going anywhere.

The
talk that loan mods are over

is
overblown. The shadow inventory can’t

just
be pulled back onto the books of the

banks
so we need to get more creative.

If
you keep foreclosing and doing short

sales
you’re devaluing that whole neighborhood,

which
drives the whole market

further
down.

****Q:
What type of technology will be required in

the
back office to ensure documents are meeting

guidelines
and are efficiently being managed?

****MICHAEL DETWILER: If
you have an enterprise

lending
solution once a application comes

in,
the system should be able to run analytics

to
determine what’s on that app is

compliant.
You also need to work with

a
company that can dynamically generate

documents
upfront. A lot of the doc

preps
have a forms library and lenders

just
choose forms. It’s a point and click

solution.
That is very, very dangerous.

With
Mortgage Cadence Finale Document

Services
Division, once an application

comes
in analytics are run to ensure

licensing,
it looks at the origination channel,

it
detects if origination guidelines

have
been met and it won’t allow the

lender
to pull documents unless the compliance

thresholds
are met. Being able to

analyze
and generate documents based on

the
data before you get a form is key. The

day
of dumb dc prep that is forms based

and
does not include analytics and dynamic

creation
will come to an end. Companies

that
are hocking forms and don’t

have
a system that analyzes and works of

the
data will have a short life.

****Q:
Given your new investment from Monitor Clipper

Partners,
what can we expect from Mortgage

Cadence
this year?

****MICHAEL DETWILER: We
continue to expand

our
products and services in both origination

and
servicing. We’ll continue to

invest
in our intellectual property. You

can
expect to see acquisitions from us.

How
many? We’re talking to many companies

and
it all depends on opportunity.

You
will also see us moving down chain

into
the midtier and lower tier. You’ll also

see
continued expansion of our sales and

marketing
arms. When you look at the

new
licensing laws and liquidity requirements,

regulators
are looking for accountability.

People
have to protect themselves

from
that because it is a matter of life and

death.
The risk is real.

****Q:
Personally, what’s your biggest professional

success
and failure?

****MICHAEL DETWILER: I
know you’re looking

for
a professional success, but my biggest

success
is being married for over 20 years

and
raising a wonderful daughter and a

successful
son. That’s not a professional

success,
but to be married all these years

and
have two great children is something

that
I’m very proud of. It’s important.

Professionally,
the biggest accomplishment

has
been building and managing

Mortgage
Cadence over the course of

10
years without any outside investment.

Being
successful and profitable helped

us
establish a relationship with Monitor

Clipper
Partners. It was a great reward

for
all of our years of hard work. Now we

can
take the company to places that we

couldn’t
before when we were privately

funded.

Equal
with that is the loyalty among

our
customers. We are thought of as a

partner.
Our clients don’t call us a vendor.

That’s
a big accomplishment, too.

On
the other side, I believe that business

is
all about the people that you bring

on.
I need to work on doing a better job

of
finding the best talent. Our employees

have
a lot of longevity, but when we’re in

a
growing mode it’s hard to find the best

talent.
You have to be more patient when

you’re
looking for top talent.

Through
it all, I’ve learned that it is

possible
to achieve your goal if you work

at
it. We’ve delivered. I’ve learned that if

you
focus and get together the right people,

you
can really achieve anything.

****Q:
What advice do you have for entrepreneurs

looking
to improve their businesses in 2011?

****MICHAEL DETWILER: I
would say that the

residential
finance market is a fundamental

part
of the U.S. economy. We’re still

facing
challenges, but the market will sort

itself
out. I don’t agree with the political

pundit
that said years back that owning a

home
is a right, I don’t know if it’s a right

myself,
but you should continue to have

that opportunity. So,
hang in there.

****INDUSTRY
PREDICTIONS:

**** Michael
Detwiler thinks:

****1. Investors that understand the industry

will
come back into the space. For

example,
Wall Street will re-enter offering

prime
conduit origination through correspondents

and
mortgage products such

as
jumbo mortgages.

****2. Originators must embrace the new

lending
paradigm and be prepared

to
deal with more regulation and transparency

through
market products and

services
geared towards a more savvy and

concerned
customer base. Therefore, the

consumer-direct
channel will expand to

introduce
online, intuitive tools for the borrower

to
communicate with the lender.

****3. Servicers working with loan
modifications

will
move towards principal

reduction
as opposed to rate reduction

in
order to retain borrowers and prevent

foreclosure.
They must also communicate

more
effectively with the customer by utilizing

consumer-direct
technology that will

establish
acknowledgement and confirmation

of
received documents through an

online
portal.

****4. Advanced imaging solutions will

become
needed so documents can be

received
through a variety of sources and

formats
and then recognized, categorized,

indexed
and have appropriate data

extracted
into the system of record without

human
intervention.

****5. Housing prices will continue to
stabilize

****ABOUT
MICHAEL DETWILER: As CEO of Mortgage Cadence, Michael Detwiler oversees strategic

planning
for the overall operations of the company. He is responsible for

sales,
marketing and managing the Mortgage Cadence product suite

and
additional service offerings. Prior to his leadership at Mortgage

Cadence,
Michael was resident of 3t Systems. During his tenure as

president
of 3t, the company was recognized by Inc. Magazine as one

of the Top
500 Fastest Growing Companies for three consecutive years and ranked No.

3 for two consecutive years
on Deloitte and Touche’s “Colorado Technology Fast 50.”

*****http://www.progressinlending.com/TME-FEB-11/TME0211-31.pdf*****

******7,32******

Progress In Lending
The Place For Thought Leaders And Visionaries

Magazine Cover Story

*Business And Technology*

**Executive Interview**

***Too often lenders view technology as something out of their
area of expertise. After

all they’re business people, not technologists. That’s the wrong
attitude if you want

to succeed in this or any other evolving market.

****Tyler and Todd Sherman are living proof that when done with an
eye on strategy,

technology can be a lender’s best friend. Why? These two
executives started a mortgage

lender, built their technology in house, successfully sold that

company and are now back at it again sharing their expertise

with the general market as technology vendors. Colorado-based

Motivity Solutions, founded in 2006, is a customer software
solutions provider

that offers a variety of mortgage-centric business intelligence
automation.

****Motivity Solutions flagship product, Movation Business
Management Platform,

provides a real-time view across an entire organization by turning multiple data sources

into actionable information through dashboards, scorecards and
intelligent reporting.

How do these two business-savvy executives see the mortgage market
today? They share

all in this
executive interview with Tomorrow’s Mortgage Executive magazine.

****Q:
What was the biggest problem lenders faced

just
two years ago as compared to what they face

today?
How does it compare?

****TYLER SHERMAN: I am not
sure there is any

significant
way to compare the state of

the
industry two years ago versus today.

What
was transpiring two years ago had

never
been seen before and will probably

never
been seen again—hopefully. But, if

I
were to compare the two, I would say

that
two years ago mortgage lenders were

simply
fighting for their existence. There

were
significant trust issues and a declining

real
estate market. What kept the industry

afloat
and helped lenders survive

was
FHA lending and the record-low

interest
rates. Now, lenders are facing an

expected
decline in originations for 2011,

which
is going to put the focus on growing

market
share and lowering the cost of

manufacturing
a loan. They are also facing

unheard
of regulatory concerns. What

is
going to rise to the forefront are age

old,
free market concepts—innovation,

entrepreneurial
spirit, having the customers

best
interest in mind in order to build

trust,
loyalty, and brand affinity. These

core
values were always where the independent

mortgage
bankers had the competitive

advantage
and I think we will see

a
return to this in 2011.

****TODD SHERMAN: I agree
that two years ago

the
biggest problem lenders faced was

fighting
for survival. From a technology

perspective,
the focus was on doing more

with
less, but the majority of the industry

wasn’t
spending money on technology.

When
we launched Movation in 2009, just

less
than two years ago, we felt the timing

was
perfect because of its’ core values—

augmenting
existing technology without

having
to replace it, its ability to help optimize

an
organization’s process, and the

ability
to give a very clear understanding

of
the state of the business. This was all

about
doing more with less. Looking at

the
landscape today, compliance seems

to
be on the top of everyone’s mind. And

it
is something that should definitely be a

priority,
but I think the biggest problem

lenders
face now is going to be staying

focused
on what is really important. The

lenders
that will continue to grow in 2011

are
the lenders that will be aggressive in

attacking
compliance, as opposed to being

entirely
reactive, and those that focus

on
what made the independent mortgage

banker
successful in the first place. We

have
taken the first few steps forward in

the
renaissance and we are at a point in

mortgage
banking we haven’t been at in

some
time—a point where anything and

everything
is possible through solid business

principles
and the innovative American

spirit.

****Q:
Similarly, how has technology changed in the

mortgage
space over the past two years?

****TODD SHERMAN: In
listening to the focus

of
the mortgage banker two years ago,

trying
to do more with less, vendors

were
trying to add functionality to their

systems
that would help them with this

charge.
What a lot of vendors were trying

to
do was build that all-inclusive,

end-to-end
system, in order to acquire

what
they could within what the industry

was
willing to spend during a time of

crisis.
There wasn’t a lot of open communication

between
vendors in an effort

to
build best-of-breed solutions. But that

isn’t
new to the mortgage technology

landscape.
It is why we built most of

our
technology in-house when we were

mortgage
bankers and one of the primary

reasons
we started Motivity Solutions after

selling
our mortgage bank. We wanted

to
build an open platform that worked

with
the lenders previous investment, in

capital,
training, etc., and encouraged

vendors
to work as partners in providing

solutions
that fit the needs of the mortgage

banker—as
opposed to the mortgage

bankers
having to conform to the

limitations
of the technology. And we

are
seeing that come to fruition through

our
partnerships with Xerox, AllRegs,

Del
Mar DataTrac, the Stratmor Group,

and
other select vendors.

****TYLER SHERMAN: And we will
be announcing

some
other very exciting partnerships

as
well in the very near future. That isn’t

to
say that our segment of the industry is

where
we would like to see it. There is

still
very much a lack of trust amongst

vendors
in the industry, posturing, etc.

When
we won the award for Movation in

2009
we said that we looked forward to

working
with everyone in that room, the

leading
industry technology providers,

and
we meant it. We continue to drive

down
the path of creating partnerships

that
provide real value to mortgage bankers.

I
would also say that business user

configurability,
something that we continue

to
enhance within our system, and

mobile
technologies are definitely more

top
of mind for the lender, and therefore,

the
vendors as well. We think mortgage

bankers
are beginning to understand the

benefit
of using business intelligence to

drive
a healthy, competitive, and goal oriented

performance-based
environment.

Some
industry vendors are looking to us

and
our technology to bring that benefit

to
their products and others are looking

to
build it themselves—it all depends on

the
philosophy of the company.

****Q: As someone who has been
both a lender and

vendor,
how was your view of technology as a

lender
different and similar as compared to

how
you view technology today as a technology

vendor?

****TYLER SHERMAN: We view it
in much the

same
way. Mortgage banking is our family

business
so we view ourselves as mortgage

bankers
today even though we don’t

originate
loans. When we were a lender

we
focused on technology and processes

that
allowed us to bring value to our customers.

Much
of what is being instituted

today
in regulations are policies that we

had
in place as mortgage bankers back

in
2004. We did it because we thought it

was
the right thing to do for the consumer,

which
ultimately lead to our sustainable

success
in becoming a top 10 FHA

lender.
The technology we developed at

Watermark
is conceptually identical to

what
we have in Movation today. So, I

would
say that our view of technology

hasn’t
changed a bit from when we were

a
lender.

****TODD SHERMAN: I would
definitely agree

with
that. As a lender we understood

very
well who we wanted to use and for

what
service. Everybody was pushing an

end-to-end
solution but there were still

gaps.
In business, you cannot try and be

all
things to all people and be successful

at
it. You have to stick with what you do

well.
For us, as mortgage bankers, that

was
FHA loans. As mortgage bankers developing

technology
for other mortgage

bankers,
it is an open platform that manages

the
entirety of the business by filling

the
gaps, improving existing technology,

and
creating a performance-based culture.

I
cannot tell you how many product demonstrations

and
pitches we went through

and
there wasn’t one product that had the

flexibility
we required. Some products

might
have been flexible, but the cost of

customization
was prohibitive, and other

products
might have only been missing a

few
pieces, but they were core pieces we

couldn’t
live without. And none of it really

seemed
like it was being developed

from
the mortgage banker’s perspective.

So,
we developed our own.

****Q:
Talk about the role business intelligence plays

in
the mortgage market today?

****TYLER SHERMAN: The role of
business intelligence

in
the mortgage market today is

a
means to provide real-time insight into

the
business and highlight which areas

within
the business that need improvement.

Without
real-time insight, lenders

can’t
know on a day-to-day basis who is

and
who isn’t meeting the goals necessary

to
accomplish the objectives of the business.

We
work with our customers from

an
ideology of what gets measured, gets

results.
Business intelligence is how you

measure,
manage, track and drive performance.

Business
intelligence allows lenders

and
vendors to focus on what needs

their
attention most.

****TODD SHERMAN: In addition
to what Tyler

said,
business intelligence allows you

to
go as deep as you need to in order to

identify
the area of improvement. You can

analyze
the entire company, a department,

a
process, an entity such as a loan or vendor,

or
all the way down to the employee

level.
We use business intelligence with

our
clients to understand first where they

are
and are not meeting their goals on a

corporate
level and then determine the

next
steps based on what is going to bring

the
highest level of value to the customer.

That
may be more business intelligence,

it
might mean automating a process, it

could
mean customer relationship management.

As
business owners, we may

think
we know what our company needs

to
do, but it is even better to definitively

know—even
if it is only confirming our

gut
instinct. This makes it simple to determine

next
steps and creates a confidence

that
we are optimizing our time and financial

resources.
This would not be possible

without
business intelligence. Companies

that
take advantage of this technology are

going
to have a clear competitive advantage

over
those that don’t in 2011 where

growing
market share through customer

retention,
referrals, and service as well as

creating
a more profitable manufacturing

process
will be imperative for growth.

****Q:
How can BI be used in creative ways to give

lenders
an edge?

****TYLER SHERMAN: We have
already talked

conceptually
about the edge lenders can

realize
through business intelligence, so

let’s
look at some specifics. Business intelligence

helps
lenders get more out of

their
systems, people, and processes. We

have
a customer who was really trying to

understand
why underwriting wasn’t able

to
turn the number of loans per month

they
had all established as the corporate

goal.
They knew the staff was hardworking,

led
by a competent manager, and felt

as
though they had all of the tools necessary

to
meet the goals. And, they had

already
taken the approach of reworking

the
underwriting process a number of

times.
Nothing they tried was effective.

So,
we applied business intelligence to

the issue to see what
it showed. As it

turned
out, the issue wasn’t in the underwriting

department
at all. We were able

to
help the lender discover that a certain

product
was creating a bottleneck because

of
the number of conditions it took

to
get the loan underwritten. The lender

was
then able to apply an additional step

at
the point of origination that really impacted

the
amount of effort it took within

the
underwriting department. And, the

lender
was able to look back and measure

the
improvement, even tying it to

the
increase in loan and product profitability.

****TODD SHERMAN: Tyler
brings up a good

point.
It isn’t just business intelligence

that
makes the difference. It is actionable

business
intelligence that makes the difference.

Think
about the consultant that

comes
in and says, “This is what you

need
to do. Good luck and have a fantastic

year.”
There is a measure of usefulness in

that
information, but it isn’t the solution.

Actionable
business intelligence gives

you
the full solution. There is no shortage

of
creativity and innovation within mortgage

banking,
and our clients have proven

very
creative in how they measure and

track
their successes and failures. Business

intelligence
is open from the perspective

of
how you apply it, but specific

in
delivering what the next step is—you

really
get the best of both worlds. Another

example
would be managing to the expectations

of
their stakeholders. Think of it

this
way, if you knew what questions were

going
to be on the test, why wouldn’t you

determine
what you are going to study

based
on that? Our business intelligence

gives
the lenders a method of tracking, in

real-time,
the key performance indicators

they
know they will ultimately be held

accountable
to. So, when and if the time

comes
for an audit, they already know

where
they stand because they have been

tracking
it the entire time. Preparation for

the
audit becomes easier and the audit itself

is
less intrusive on the organization

as a
whole. You also build a tremendous

amount
of trust with the stakeholder running

the
audit.

****Q:
Motivity has entered into strategic partnerships

with
companies like Xerox, AllRegs and others.

What
goes into making those partnerships

successful?

****TYLER SHERMAN: In one
word, synergy. This

is
why we named our program the Synergy

Network.
It takes likeminded companies

that
understand the true essence

of
team work—that the whole is greater

than
the sum of its parts. Some vendors

don’t
want to admit their system has gaps

and
others don’t have the confidence in

their
product, which creates a level of

fear
in partnering with a company like us.

Our
best relationships are built on trust,

integrity,
and a focus on mutually beneficial

results.
Businesses are protective

by
nature, but at some point you have to

submit
yourself to the effort of the team

in
order for there to be any chance of success.

We
work with our partners to accomplish

each
other’s goals regardless of

whatever
feature overlap there may be.

We
are very respectful of their customers,

their
brand, and their philosophies so

we
quickly arrive at the stage where we

are
solely focused on how we can create

more
value together.

****TODD SHERMAN: The last
important element,

and
one that we are personally very proud

of,
is that we have created a technology

that
is very open to working with other

technologies.
We have already discussed

this,
but relative to what it takes to make

a
partnership successful it cannot be overlooked.

Our
system was built with these

partnerships
in mind. There is a lot of

technology
out there that does a really

good
job and the more mature industry

technology
markets are extremely competitive.

We
don’t feel it makes sense from

a
business perspective to try and reinvent

the
wheel and then spend the resources to

compete
in a crowded marketplace. We,

and
our partners, believe that it makes

more
sense to work together focusing on

bringing
value to the industry. We feel

there
is plenty of opportunity out there for

all
of us and that together our businesses

will
end up in a better place.

****Q:
Origination volumes are expected to decline by

40%
in 2011. What advice do you have for struggling

lenders?

****TYLER SHERMAN: I think
first and foremost

is
understanding what your identity is and

then
staying focused on who you are. Be

proactive
within your business while not

acting
out of desperation. Stay confident

and
focus on longer-term objectives and

growth
as opposed to just doing what it

takes
to stay in business. Struggling lenders

need
to focus on both ends of the profit

equation—growing
market share and lowering

manufacturing
costs. They should

look
to affordable technologies like ours

to
assist them with this effort.

****TODD SHERMAN: Being
proactive, specifically

when
it comes to compliance, is going

to
be important so that these lenders can

focus
on growing market share and lowering manufacturing costs. Independent

mortgage
lenders have always been innovative

and
entrepreneurial—understand

where
you have a competitive advantage

and
use it. And then determine where you

need
a competitive advantage and go get

it.
Confidence cannot be overlooked, and

it
is very tough to be confident when you

are
struggling, but you cannot succeed

without
it.

****Q:
To continue discussing market conditions, new

regulation
isn’t going to stop flooding the market.

How
do lenders stay ahead of these new regs?

****TYLER SHERMAN: I think it
is important to

first
look at the differences between the

independent
mortgage banker and the

institutional
bank that originates mortgages.

For
the independent banker, the

end
justifies the means—meaning that

as
long as the loan closes according to

the
guidelines, all is good. For the institutional

banks,
they focus more on process

and
procedures and the results are

what
they are. Both have their benefits,

and
both have their downfalls. I think

the
ideal scenario is adopting and automating

processes
that ensure compliance,

understanding
that more compliance

is
going to come, and making sure

you
don’t eliminate the ability to move

quickly.
Regulation isn’t going to touch

just
one piece of technology or the business;

it
is going to touch all aspects of

the
business eventually. Lenders should

look
to solutions like our business management

platform
that can give them a

single
open platform from which they

can
manage compliance and all other elements

of
their business.

****TODD SHERMAN: I would say
lenders need

to
figure out a way to incorporate the

new
regulations without being overly

intrusive
to the organizations. This

won’t
be an easy task, but not an impossible

task
either. The key to that is being

proactive.
Whoever handles the implementation

of
new regulations the best

will
have a clear competitive advantage

over
those that continually struggle.

Regulation
is a check point you have to

get
through before you can continue on

with
the task of growing market share

and
lowering manufacturing costs. We

have
a solution that helps simplify the

implementation
of regulations, but that

doesn’t
mean it is right for everyone.

Lenders
need to find something that

works
for them and create that competitive

advantage.

****Q:
Another hot topic is data integrity. What should

data
integrity mean to lenders and how can they

ensure
the integrity of their data?

****TODD SHERMAN: For
lenders, data integrity

should
mean being able to rely on your

data
as that one version of the truth. That

means
defining the data that is important

to
you and focusing on keeping the

integrity
of that data at the highest level.

There
are many ways to do this, but if I

were
them I would automate policies,

track
changes, limit the ability of anyone

that
can affect data quality, and create accountability

down
to the employee level.

Bad
data affects everyone negatively so it

needs
to be communicated that everyone

is a
part of the solution.

****TYLER SHERMAN: That
accountability

down
to the employee level is the key

component
there. If lenders make data

quality
an aspect of an employee’s performance

review,
I can virtually guarantee

that
the data integrity will remain

high.
Those employees that don’t care

about
it will fall off leaving only those

that
do, thereby creating a culture where

everyone
has the utmost respect for data

quality.
And, yes, data integrity is all

about
you and your stakeholders being

able
to rely on it. This is a high-risk item

where
the focus must always remain on

the
end goal.

****Q: Lastly, what’s ahead for Motivity Solutions in

2011?

****TYLER SHERMAN: Overall our
company will

focus
on helping lenders get more business,

and
get more out of their business—

with
systems and employees. We will also

help
lenders focus more on loan level and

employee
profitability metrics. We will

be
announcing several new key partnerships

with
well-known, industry leading

vendors.
This is going to allow Motivity

Solutions
to be a part of some great solutions.

Shortly,
we will be rolling out a process

of
implementation that will elevate

our
focus on providing the highest level

of
value and ROI in the shortest amount

of
time.

****TODD SHERMAN: On the
product side, we

are
going to enhance our business intelligence

by
making the software even easier

to
admin and customize. We will be introducing

major
enhancement to our mortgage-

centric
CRM and we will be building

on
our work management and process

automation.
We are also enhancing our

data
quality functionality and improving

our
mobile platform. As Tyler mentioned,

our
sole focus for 2011 is helping lenders

get
more business, which is where

our
CRM comes in, and get more out of

their
business through performance driving

business
intelligence along with work

management
and automation to drive efficiencies.

This
will allow lenders to improve

both side of the profit
equation.

****INDUSTRY
PREDICTIONS:

****Tyler Sherman
thinks:

****1. Industry stakeholders will require
even

more
transparency throughout the loan

manufacturing
process.

****2. Lenders will proactively change
business

processes
to reflect ethical lending

practices
before they are forced to through

regulation.

****3. The majority of loan originations

will
shift back to the innovative and

entrepreneurial
independent mortgage

banker
because they have always been the

most
efficient originator of mortgages.

****4. Lenders will incorporate the
stakeholder

metrics
and guidelines by which they

will
be held accountable into all stages of

the
loan lifecycle.

****5. Lenders will begin to put systems and

processes
in place to create performance-

driven
accountability throughout

their
organizations.

****INDUSTRY
PREDICTIONS:

****Todd Sherman
thinks:

****1. Extended mortgage-related software

functionality
for mobile devices will

enter
the market.

****2. An open marketplace is needed for

publishing
and digesting services and

solutions
to create more efficient distribution,

regardless
of the system of record,

based
on lender needs as opposed to

vendor
needs.

****3. Systems will be developed that rapidly

accommodate
changes in the regulatory

environment
through lender configuration

as
opposed to vendor re-programming

and
re-deployment.

****4. Unified messaging will become more

prominent
to track all structured and

unstructured
communication for any entity

(i.e.
email, phone, IM, system contact

logs,
etc. for loans, employees, customers,

investors,
etc.).

****5. Systems will tailor themselves to the

skill
set of the user and expand based

on
the growth of the user to limit training

within
the employee on-boarding process.

****ABOUT
TYLER SHERMAN: As CEO of Motivity Solutions, Tyler Sherman is
responsible for

establishing
the vision and long-term strategy of the company. Tyler

has more
than 15 years of sales, marketing, and executive leadership

experience
across multiple industries. Before founding Motivity Solutions,

Tyler was
a co-founder of Watermark Financial Partners, where he led

the sales
team. The sales and marketing programs developed by Tyler

led
Watermark to become one of the largest organizations of its kind.

****ABOUT
TODD SHERMAN: As President and COO of Motivity Solutions, Todd
Sherman is

responsible
for all aspects of software development as well as the dayto-

day
operations and strategic implementations for the company. He

has spent
more than 17 years designing, creating and implementing

software
across several industries. Before founding Motivity Solutions,

Todd was
co-owner of Watermark Financial Partners. Todd has built

small single-user systems
and large enterprise systems for thousands of users.

*****http://www.progressinlending.com/TME-JAN-11/TMEJan11-29.pdf*****

******5,30******

Progress In Lending
The Place For Thought Leaders And Visionaries

Magazine Cover Story

*A New Era
In Mortgage*

**Executive
Interview**

***Have
you ever had a problem?

Come on,
we all encounter

problems
in life. The bigger

question
is: How do you solve your

problems?
In order to overcome

adversity and move forward you need

a lot of
input from a variety of sources.

You can’t
make snap decisions and

hope you
get a positive outcome.

Sometimes
you’ll get lucky, but in

most cases
snap decisions result in

more
problems.

****Today
the mortgage industry faces

a lot of
problems. Volume is down.

Margins
are thin. Investor confidence

has not
been restored. New regulation

never
seems to stop. And these are

just a few
issues that the mortgage

space
faces. We know the problems,

but what
we don’t know are the

solutions.

****How do
we get at those solutions?

PROGRESS
in Lending Association’s

Tony Garritano,
Roger Gudobba and

Michael
Hammond talk about the

benefits
of industry collaboration.

Beyond
that they discuss candidly

what they
think are the industry’s

biggest
problems and propose some

solutions, as well.

****Q: Why does the mortgage industry need

PROGRESS in Lending Association?

****TONY GARRITANO: The
mortgage industry is

under
siege. What do I mean? There are

game-changing
regulations compounded

with the fact that there is really no place

in
the industry for technology thought

leadership
to happened openly and

freely.
That’s what lead me to believe that

there
was a strong need for something

like
PROGRESS in Lending. This is an

open
industry utility for people to come

and
get more quality information about

how
technology combined with sound

business
strategy can really help lenders

and
people involved throughout the

mortgage
progress who are struggling

with
a very tough market because of new

regulations,
but not only because of new

regulations,
also because investors are

becoming
increasingly more stringent,

because
borrowers are scarce, because

unemployment
is high and there is

a
strong need to be as efficient as

possible.

****ROGER GUDOBBA: I would
second that.

One
of the reasons I got involved

is
because I felt this was a different

type
of opportunity than everything

else
presented. Typically, most of the

publications
are online newsletters

with
just news. They are all about

here’s
what’s happening kind of stuff

and
some of the feature articles would

expand
a little on where they thought

the
future was going, but a lot of times

that
was written by people that were

self
promoting something or other even

though
it might have been very subtle. I

see
this as an opportunity where anyone

in
the industry can respond and speak

out.
We are going to make more use of

blogs
and other forms of multimedia.

PROGRESS
really gives anybody a

chance
to talk about things. That’s the

whole
idea. It isn’t like we are trying to

set
the whole strategy going forward, we

are
trying to be thought provoking and

get
thought provoking people involved

so
that other people can look at it and

say,
“You know, maybe I should try this

or
that.” We are trying to stimulate their

entrepreneurial
ship if you will.

****MICHAEL HAMMOND: Roger
makes a great

point,
PROGRESS is really about getting

people
to engage and share ideas. It

doesn’t
mean that everyone is going to

agree
with every article or every stance,

but
that’s the benefit of PROGRESS in

Lending
in that people can share different

ideas
and different strategies about

how
they are using automation to handle

the
vast challenges that are happening

in
the market and by sharing more and

more
of those ideas and different ways of

thinking,
we can come up with better solutions

as a
whole and really collaborate

to
solve problems instead of just putting

band-aids
on things and trying to keep

moving
things forward.

****ROGER GUDOBBA: This
industry has certainly

been
very reactive over the years and there

are
a lot of followers and not a lot of leaders.

Typically
everybody just kind of sits

back
and says let’s wait to see what the

big
bank does or big mortgage industry

player does. A lot of times they don’t understand

that
by being a small company

that
is a little more nimble, you have the

opportunity
to move ahead. The big players

are like
big ocean liners trying to turn

in a
small harbor. PROGRESS in Lending

should
encourage people. We want to

stimulate
people’s thought process.

****TONY GARRITANO: And
the more different

ways
we can give people forums and

outlets,
the better we will be as an

association
and the better the mortgage

industry
is going to be. This is why we

started
off with the website and then we

added
a daily newsletter, then a video

and
now we are adding a magazine.

The
point is not to saturate the market

with
output strategies, the point is to

give
mortgage participants as many

opportunities
to react to what goes

on
in their daily lives so they can help

their
peers move forward. Some people

are
more comfortable doing that in a

magazine
while some people prefer a

few
quick stories via e-mail. Others are

more
visual and would prefer a video. We

want
to come at people how they prefer

to
be approached and get some thought

leadership
going. Sometimes they are

going to agree with us
and sometimes

in a place where the
dialogue starts and I

think
that is what separates us from other

organizations
in that we are not telling

people
what to say or think. We are not

going
to put out position papers and say

everyone
involved in PROGRESS in

Lending
has to think like this. We are just

putting
out content from as many people

in
the industry that want to participate

and
put out their ideas. Some of those

ideas
might be similar to those of the

people
involved with PROGRESS in

Lending
and some may be opposite but

that
is ok. That is why we are here to get

those
ideas out there

****ROGER GUDOBBA: When I
started writing

my
weekly column for the e-letter, I at

first
thought that having shorter columns

would
make it difficult to get ideas across,

but
then after having to write many of

them,
I am glad they are short. It gives

you
an opportunity to carry thoughts

across
to the next one and keep people

coming
back. Even if they miss an issue

of
our newsletter, the fact that when they

are
registered and click on read more, it

expands
and shows all that has been done

to
date is a big benefit for the reader. If

you
missed a column or two you can

look
over to past columns and see how

that
idea came about. It doesn’t take a

lot
of time to read. I can go through the

links
faster than in other publications.

I
get so bogged down navigating other

publications.

****MICHAEL HAMMOND: It
is important to keep

the
content to the length that makes it

easy to digest. We are bombarded with information.

How
many e-mail newsletters

do
you get? By keeping it short and concise

we
are allowing people to be exposed

to a
lot of different content, and unlike a

lot
of the other publications where you

have
one or two editors filtering information

the
way they think or through their

lenses,
our content is coming from many

different
industry participants that are actually

in
the industry. With PROGRESS,

there
are so many different voices producing

the
content that it really gives a lot of

exposure
to different ways of thinking.

Whether
you agree, disagree or believe

there
should be more in-depth discussion,

it
triggers thought processing in a multitude

of
areas.

****Q: Transitioning for a bit to market conditions,

what do you think is the most prevalent trend

we are seeing in the mortgage market today as it

pertains to automation?

****MICHAEL HAMMOND: I
think that one of the

biggest
challenges—and it isn’t anything

new—is
how many rules and regulations

are
being thrust upon the industry. When

you
talk to lenders they are just trying

to
keep their heads above water. They’re

asking:
How do I manage and maintain

all
these rules and regulations? How do I

implement
them? What is their impact on

what
I do? I think that using automation

to
allow lenders to better handle those

regs
in a systematic process that is easily

duplicated,
that can have an audit trail, is

probably
one of the key areas that people

are
very concerned about. Fraud is still

a
heavy issue, as well. What is going to

happen
with valuation and where are we

going
to get proper valuation modules so

that
the housing market can stabilize is

also
hot. There are a host of issues, but

the
No. 1 issue is still how to handle all

these
rules and regulations.

****ROGER GUDOBBA: It is very
important to

ensure
lender participation in the development

of
these rules and regulations.

The
minute you get people outside the

industry
setting the agenda, you are in

trouble
because they don’t know our industry.

The
sad part of all this is the fact

that
these regulations were set in place

to
correct bad business practices perpetrated

by
people within the industry. We

can
right that wrong, especially when

you
think about lenders always being

reactive
instead of being proactive. In

fact,
when it was so busy they were so

excited
about making all this money

and
making all these loans that they

really
didn’t want to change. They got

caught
up in the same euphoria that the

borrowers
did. Everyone thought, wow,

I
can buy this house for $100,000 and

sell
it tomorrow for $500,000. If you

look at the history of
this industry, there

are
always times of rapid accelerations

in
an area that really didn’t have any

business
sense. Just follow the times. It

is
like the stock market in that there are

ups
and downs. We are in a down period

and
we are going to pay some penalties

for
not paying more attention.

****TONY GARRITANO: The
big question is how

long
will this downturn be and how can I

stimulate
recovery. You won’t stimulate

recovery
by sitting on your hands, you

have
to move. To Michael’s point, I think

lenders
are most interested in automated

compliance
because they’re still reacting.

Once
they get that technology in place,

I
think it will be time for them to think

more
long term.

****Q:
What really happened to cause this downturn

and
what needs to happen to turn things

around?

****ROGER GUDOBBA: Lenders
have to do a better

job
up front in making better loans. Back

in
the old days when the local community

banks
knew the borrower who sat across

from
the President of the bank and said

I
need a loan for a house, there was a

personal
relationship there. That has all

but
disappeared, especially as you hear

about
more and more originators coming

through
the Internet. They don’t know

that
person and as I mentioned that,

the
Wall Street Journal stated that 48%

of
mortgage fraud is at the application

level
where the borrower had falsified or

misstated.
That doesn’t necessarily mean

that
the borrower intended to defraud,

the
borrower might have just been doing

it
to get the loan, but the problem with

that
is it affects evaluating risk. You

have
to understand all the parameters

involved
in risk evaluation and in doing

so
it is important that the information

is
correct. Lenders did a very poor job

of
validating data, from appraisals to

borrowing
information, which are all

used
to evaluate that risk. Maybe they

should
have made some of those loans,

but
maybe the risk should have been

evaluated
creating a higher interest rate

and
the borrower wouldn’t have qualified

and
the loan wouldn’t have got done.

They
just made a lot of bad loans and it is

going
to take some time to recover. The

difficulty
right now is how to get out of

those
bad loans because obviously this

loan
modification program has been a

waste
for the amount of time and money

that
has been spent. For the few borrowers

that
made it, more have slipped back into

default.
It has been a dismal failure as far

as I
am concerned.

****MICHAEL HAMMOND: I
agree. As to Roger’s

point,
loan quality is going to be an

area
that has to improve as it impacts

the
entire lifecycle of the loan. It’s not

just
about originating correctly and

having
a good borrower, it’s about

getting
at better quality on the front

end
because the better that loan is for

the
secondary market, the more we can

restore
confidence. I also think there is

a
trend that you are going to see because

wholesale
is drying up, because there are

fewer
brokers in the market, the retail

lenders
are really going to enhance those

channels.
There is a strong fight for who

has
the relationship with the borrower.

As
Roger said, when the industry was

booming
and people were getting loans

left
and right, they didn’t have that

personal
connection. Lenders are now

getting
forced to deal in retail, which

means
that they really have to focus on

who
owns the relationship, what tools

are
needed to get at the borrower, etc.

Lenders
need mortgage-specific CRM,

and
data analytics to come together to

really
help foster a stronger relationship.

****TONY GARRITANO: If
we’re truly going improve

our
space we have to embrace data

from
trusted data sources. The more data

we
collect from a trusted data source vs. a

third
party, the better we’ll be. There are

a
lot of tools that validate data against a

variety
of sources, why not use tools like

that
to collect the data in the first place

instead
of asking the borrower or anyone

else
emotionally involved in the deal? It

doesn’t
make sense. I have no doubt that

the
industry will recover, though. This is

a
growing up period for mortgage. We all

have
to get used to a new world of globalization

and
find our place within that

world.
Things change, now mortgage has

to, as well.

****INDUSTRY PREDICTIONS:

****Tony
Garritano thinks:

****1. Attaining the full e-mortgage is a big

part
of industry recovery.

****2. Lenders will rely more on data and

less
on third parties for loan-level

information.

****3. More data repositories will emerge

to
make it easier for lenders to access

data
directly from the source.

****4. Lenders will invest in technology that

enables
them to know everything

about
their business.

****5. Automated quality control will be done

earlier
in the process and at several

key stages out
of necessity.

****INDUSTRY PREDICTIONS:

****Roger
Gudobba thinks:

****1. There will be more emphasis on

qualifying
the borrower and the

property.

****2. More companies will develop predictive

analytics
to help the lender predict

where
the borrower will be in the future in

terms
of their true propensity to pay.

****3. Technology won’t be about features

going
forward, it’ll be about what it

does
for the end user.

****4. All lenders will be actively
re-evaluating

their
processes and taking a more

holistic
view.

****5. From those internal evaluations, we’ll

see
more action on the part of lenders

in terms of
embracing technology.

****INDUSTRY PREDICTIONS:

****Michael
Hammond thinks:

****1. There will be a constant influx of

rules
and regulations that will burden

lenders.

****2. The battle for the “relationship” with

the
borrower will rage on.

****3. Borrowers will demand more online

tools,
including social networking

capability.

****4. Overall loan quality is key to market

recovery.

****5. The role of analytics in the mortgage

process will
continue to expand.

****ABOUT
TONY GARRITANO: Tony Garritano is Chairman and Founder of PROGRESS
in Lending

Association.
When asked why he started an industry group like

PROGRESS
in Lending Association, Tony answered, “Going forward,

given the
recent turmoil, the mortgage space is literally going to be

transformed.
I formed this association to ensure that this transformation

is for the
better and not for the worse. Technology is going to play a

critical
role in how mortgage lenders comply with new regulation, remain competitive,

ensure
profitability, and serve borrowers looking to get their piece of the American

Dream. That’s why this
association was formed.”

****ABOUT
ROGER GUDOBBA: Roger Gudobba is Chief Executive Officer of PROGRESS in Lending

Association
and Chief Strategy Officer of Compliance Systems. When

asked what
the industry significance of PROGRESS in Lending is,

Roger
believes, “The mortgage industry has always lacked strategic

thinking.
It’s slow to embrace new ideas. PROGRESS in Lending

Association
provides a place for thoughts and ideas to flow freely.

It’s
easier to move things forward when you’re in a group. This association is a
central

place for
industry participants to have discussions about how technology can improve

the process.”

****ABOUT
MICHAEL HAMMOND: Michael Hammond is Chief Strategy Officer of PROGRESS in
Lending

Association
and President and Founder of NexLevel Advisors. When

asked what
PROGRESS in Lending can do for the mortgage space,

Michael
noted, “There currently is a void in the mortgage industry

where
technology and business discussions can openly and candidly

take place
to address industry problems. In the past year alone the

mortgage
industry has had to adapt to business-changing regulation like MDIA and

RESPA, for
example. Coming next year we’ll see the broadening of state licensing and

TILA
reform. All of these challenges call for automated solutions. I joined PROGRESS
to

be part of the solution.”

*****http://www.progressinlending.com/TME1110-Cover-Story.pdf
*****

******1,36*****

Progress In Lending
The Place For Thought Leaders And Visionaries

Your Competitive Edge: Are You Informed?

*Dare To Know More*
**By Michael Hammond**

***All the talk these days seems to center around UAD. However, when you talk about UAD you need to talk about UMDP and MISMO and XML data standardization, etc. What’s my point? There are a lot of acronyms and terms in our industry that you have to keep up with. It can be tiring, quite frankly. So, when I stumbled upon an article that detailed must-know words, I knew that I had to share it with you. In the article entitled “10 New Words Every Business Owner Should Know” by Jason Fell, he selects what he considers the 10 need-to-know new words for every business owner. Whether or not you start using them in your own business dialogues is, well, up to you, but here they are:

****1. Light-bulb moment

****Definition: (noun) A moment of sudden realization, enlightenment, or inspiration.

****Example: “Sales at my company were plummeting, but then had a light-bulb moment and knew exactly how to turn things around.”

****2. Cross-functional

****Definition: (adjective) Denoting or relating to a system whereby people from different areas of an organization work together as a team.

****Example: “If we’re ever going to boost productivity, everyone will need to improve their cross-functional capabilities.”

****3. Retweet

****Definition: (verb) On the social networking service Twitter, to repost or forward a message posted by another user. (noun) A reposted or forwarded message on Twitter.

****Example: “My company is blowing up on Twitter. My posts are retweeted constantly.”

****4. Geolocation

****Definition: (noun) The process or technique of identifying the location of a person or device by means of digital information processed via the Internet.

****Example: “Business is up at my restaurant since I started this geolocation-based mobile marketing campaign.”

****5. Contractionary

****Definition: (adjective) Causing or relating to the contraction of a country’s economy.

****Example: “This darn contractionary economy has really stifled my business growth this year.”

****6. Cyberbullying

****Definition: (noun) The use of electronic communication to bully a person, typically by sending messages of an intimidating or threatening nature.

****Example: “This person won’t stop harassing my business over Twitter. He’s practically a cyberbully.”

****7. Textspeak

****Definition: (noun) Language regarded as characteristic of text messages, consisting of abbreviations, initials, emoticons, etc.

****Example: “If you even think about using textspeak in our marketing copy, I will not R-O-T-F-L. For the uninitiated, ROTFL stands for rolling on the floor laughing.”

****8. Webisode

****Definition: (noun) A short film, advertisement, or episode of a television series, made for online viewing. A blend of Web and Episode.

****Example: “For our next webisode on YouTube, let’s think of a way to incorporate customer testimonials.”

****9. Denialist

****Definition: (noun) A person who refuses to admit the truth of a concept or proposition that is supported by the majority of scientific or historical evidence.

****Example: “I’m the boss. I’m always right and you know it. Stop being a denialist.”

****10. Bajillion

****Definitiion: (noun) An extremely large number.

****Example: “I’m an entrepreneur so, obviously, I have a bajillion things to do.”

****I hope you enjoyed reading about these new words as much as I did. My broader point in presenting you with these “new” words is to emphasize that things are always changing and we all have to keep up with the times. Sometimes just keeping up can be a full-time job, but we all have to do it.

Michael Hammond
Michael Hammond is chief strategy officer at PROGRESS in Lending Association and is the founder and president of NexLevel Advisors. They provide solutions in business development, strategic selling, marketing, public relations and social media. He has close to two decades of leadership, management, marketing, sales and technical product experience. Michael held prior executive positions such as CEO, CMO, VP of Business Strategy, Director of Sales and Marketing and Director of Marketing for a number of leading companies. He is also only one of about 60 individuals to earn the Certified Mortgage Technologist (CMT) designation. Michael can be contacted via e-mail at mhammond@nexleveladvisors.com.

Innovation Simplified: Perk Up And Listen

*Perk Up And Listen*
**By Kelly Purcell**

***I always get nostalgic this time of year. September is the back-to-school season. Everyone is eager to learn and meet up with friends that you didn’t see all summer. It’s exciting. Kids are so attentive this time of year. Everything is new and fresh.

****However, that energy soon fades. In a few months parents have to remind their kids to do their homework, get up on time, well you know the drill. I remember growing up, every time my Dad called me by using my middle name, Kelly Ann, I would perk up as I was usually being reminded to do something, or worse yet was in trouble. I knew it was time to listen. Today there’s so much noise in the mortgage industry I’m not sure anyone knows when to perk up and pay attention. But there’s one thing that surely gets everyone’s attention. Want to know what it is? Read on.

****RFP. One event that gets us technology providers perked up is the “Request For Proposal” that we receive from mortgage participants looking for technology solutions. The RFP is the voice of the customer. I don’t need to hear my father calling my full name to perk up and pay attention anymore, an RFP will do just fine.

****It is very encouraging these days to see the volume of RFPs come past our desk. The number of RFPs for eSignature and eVaulting technology has certainly increased in the last 12 to18 months. As a technology provider we get RFPs all the time. We review these documents very carefully as there is usually good business content to give us insight of upcoming trends and confirmation of current business requirements. Others however, are very poorly written and leave us thinking that the potential client may not understand or have a plan for the technology after all the RFP responses are delivered. It is sometimes very frustrating as real time and energy are put into these responses.

****So, what makes for a good RFP? To start with timelines for the various RFP phases for both parties- that being the issuer and the respondent. The first phase is of course receiving the RFP. The respondent (the “v” word–vendor) is in the euphoric stage- must kind of feel like those reality stars- they get the letter from the network to potentially “audition” for the show. A lot of time and effort is put forth in this phase from the respondent reviewing the document and making sure it is a good fit from a requirements standpoint with the vendor’s technology.

****Phase two is of course the “audition.” This is the most important phase. This is where as the vendor you are invited to present for anywhere from four to eight hours to hopefully a group of decision makers. This is where the issuer has a real responsibility to make this as even a playing field as possible for all the vendors and have the decision makers available for the presentations. There is much time and cost put into this phase from both parties and it must be treated as such. The more detail regarding use cases, demo expectations, agenda, etc. the more effective meeting for all parties.

****Assuming you made it to the onsite audition – the phase post audition is where the communication starts to breakdown. At this point there are a couple of scenarios that usually play out. You may be told quickly that you are not advancing- usually with little to no feedback. Why is that? Don’t vendors deserve the respect to at least be told that their functionality wasn’t quite there, or pricing was off or your team wasn’t the right fit? So if you are lucky enough to survive (or you think you have) – then often times it drops into some black hole not to be seen again for weeks or worse yet months. What is that cliché- hurry up and wait. It would be nice if the issuer of the RFP would be held accountable just as the respondent is held accountable throughout the process. I realize many times the RFP issuer is more confused after receiving all the information- and it takes more time than anticipated to weed through the information, but this is where communication is key. Just keep us informed and we won’t have to keep “bothering you” trying to get status. The management of the RFP process is usually a very good indicator as to future deployment and success of the project.

****A couple of other brief points. It always makes me a bit nervous when an RFP is seeking responses for both business models- outsourced and on-premise software. Most companies know well before the RFP which avenue they are seeking. So I have to ask myself- are they seeking both bids to justify the real model of choice- and if that is the case who’s time is being wasted, mine or my competitors? Then of course there is the RFP that doesn’t clearly specify the business model- well let’s just say those are a challenge.

****Overall, the business requirements are usually well thought out and articulated in most RFPs. Any workflow documentation that can be included is always helpful, though. We want to know the current volume and cycle time of the existing workflow. It’s important to know your current process if you hope to improve it.

****As vendors we welcome RFPs. We realize that the RFP is the voice of you-the client. We perk up when we get one and we pay attention to the details, so please share what you can and remember communication and respect are critical to any successful project.

Kelly Purcell is Executive Vice President, Global Sales and Marketing for eSignSystems, a division of Wave Systems Corp. eSignSystems is a provider of e-signature and e-vaulting solutions. She was co-founder of eSignSystems and has over 25 years of mortgage and technology experience. Kelly is recognized as an evangelist and advocate of e-signature and e-vaulting technology driving e-mortgage adoption. She held prior positions at GE Capital and Transamerica Financial Services. In 2009, eSignSystems was the recipient of Mortgage Technology Magazine’s Lasting Impact Award. She can be reached via e-mail at kpurcell@esignsystems.com