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Optimal Blue Transitions To New Ownership

Optimal Blue has been acquired by GTCR, a private equity firm. It was also announced that Founders and co-CEO’s, Larry Huff and Ivan Darius, will be transitioning leadership of Optimal Blue to Scott Happ, Founder and former CEO of Mortgagebot. Happ will join Optimal Blue as Chief Executive Officer at close. Sue Baker, a former Senior Vice President at Mortgagebot, will join Happ as Vice President of Product. The management team will stay in place.

GTCR will work with Happ, Baker and Optimal Blue’s management team to expand the Company’s strong network offerings and further invest in its technology. The transaction is expected to close in the next four weeks. Huff and Darius will remain involved with Optimal Blue as consultants and ensure a seamless transition to Happ.

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GTCR has committed up to $350 million of equity capital to the investment, to pursue growth initiatives at Optimal Blue, as well as complementary acquisitions to provide information and other digital services to the mortgage marketplace.

“I’ve had the great fortune to work with and serve the best customers, employees and partners one could imagine,” said Larry Huff, Co-Founder and Co-CEO. “I also would like to recognize the great partners we have at Serent Capital. Kevin Frick, Lance Fenton, and the others have been incredibly supportive partners and invaluable to the success at Optimal Blue. It has been an incredibly rewarding experience, and I look forward to my continued involvement.”

“Adding industry veterans Scott and Sue and the GTCR resources will turbo-charge the performance of the incredibly talented team assembled at Optimal Blue,” added Ivan Darius, Co-Founder and Co-CEO.

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Integration Speaks To TRID Compliance

D+H has completed integrations with both DocMagic and Optimal Blue into its MortgagebotLOS loan origination platform, as well as a compliance readiness platform called Barometer. “We are constantly working to build or integrate the best technology and find new ways to improve the end-to-end experience for our lending clients,” said Bill Neville, president of D+H’s Lending and Integrated Core Solutions business. “But every one of these efforts must be supported by the same foundation of compliance expertise that protects clients now, and into the future. They are part of the company’s overarching commitment to being the industry leader in compliance excellence.”

Optimal Blue is a cloud-based provider of managed-content, product pricing and eligibility (PPE), secondary marketing, point-of-sale, and compliance technology and services to the mortgage industry. The integration will give mortgage lenders seamless access to Optimal Blue’s family of enterprise lending services, including product pricing and secondary marketing functionality which syncs in real time, directly from the MortgagebotLOS environment.

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“Optimal Blue is excited to deliver this comprehensive integration with D+H and MortgagebotLOS. Market and customer demand has been tremendous for this partnership, and we’re pleased to now be able to meet that demand,” said Mark Coupland, vice president of Business Development at Optimal Blue. “Working with the D+H team has been a great experience and it is reflected in the work we have done together. The feedback from our beta testers has been outstanding, and we are now making this available to the entire market.”

D+H also expanded its existing integration of MortgagebotLOS and DocMagic, a provider of fully compliant loan document preparation, compliance, eSign, and eDelivery solutions. Under the agreement, D+H becomes an official reseller of DocMagic products and services.

“We are pleased to have D+H as an approved reseller of our products,” said Steve Ribultan, director of Business Development at DocMagic. “D+H and DocMagic have always worked extremely well together by providing lenders with an efficient, seamless and compliant process that is second to none. As a reseller, D+H is now empowered to independently introduce our solutions to their prospective clients.”

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These integrations provide D+H clients with a fully compliant, streamlined, and comprehensive workflow, moving from the institution, through loan documentation, all the way through to secondary marketing. D+H was able to safeguard compliance for these integrated solutions by tapping its own extensive understanding of TRID, led by the company’s Compliance Legal department and network of Federal and State Counsel.

D+H also saw opportunities to share its understanding of the regulatory space directly with clients, which led to the development of Barometer, a role-specific, scenario-based preparation tool to assist lenders in complying with the TILA-RESPA Integrated Disclosure rule.

Barometer facilitates learning by testing users’ understanding of the TILA-RESPA rule against real-world scenarios created by D+H experts, and includes video, audio and written content. Barometer was rolled out as a free service to 300 clients and 1,500 end users to help clients prepare for TRID.

“Most financial institutions do not have a single or consistent solution for compliance training and were scrambling to prepare for the arrival of TRID,” said Sue Britton, vice president, Innovation and Commercialization, D+H. “We were glad to be able to offer so many of our clients complimentary access to Barometer. This service combines our insight and expertise with a state-of-the-art learning solution, giving clients the confidence that their teams can succeed with TRID.”

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Vendors Integrate To Help Lenders Mitigate Risk

D+H Corp. has entered into an agreement with Optimal Blue that will broaden the scope of solutions offered to its MortgagebotLOS loan origination clients, with product eligibility and pricing services, as well as secondary marketing services. Here’s how the integration happened and why it matters for lenders:

“We’re very pleased to partner with a forward-thinking FinTech leader like D+H that shares our focus on the future of web-based financial services, our industry expertise, and our understanding of what clients need in order to thrive in this shifting landscape,” said Larry Huff, co-founder and co-CEO, Optimal Blue.

The integration of these platforms will enable mortgage lenders of financial institutions to seamlessly access Optimal Blue product and pricing functionality without leaving the MortgagebotLOS environment. In addition, secondary marketing and loan lock functionality accessed within Optimal Blue will be consolidated and synchronized with MortgagebotLOS in real time.

“We understand how important it is for our clients to maintain a seamless experience throughout all stages of the origination workflow,” said Bill Neville, president, D+H USA. “By integrating Optimal Blue’s system with MortgagebotLOS, we are making it easier for our clients to optimize their operations so they can focus on what they’re known for — providing outstanding service to their customers.”

Through the use of Optimal Blue’s lending solutions, lenders are able to perform secondary marketing functions, automate lock policies and processes, receive detailed pricing information both real-time and historically, as well as build and maintain loan products, profitability and branch structures. Once each loan has been sourced and priced through Optimal Blue, they may be processed within MortgagebotLOS for submission to preferred lenders. Users can also opt to pre-qualify borrowers through select lenders by leveraging Optimal Blue’s automated underwriting capabilities. Lenders leveraging Optimal Blue’s pipeline risk management, best-execution, loan allocation and hedge advisory services will also have seamless and real-time loan data from MortgagebotLOS.

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Regain Your Productivity

Mortgage lenders of today need to be agile; not only do they face competition from the growing ranks of online lenders, but they also need to keep on top of the ever-evolving requirements of compliance and new regulations, battling a constantly changing barrage of additional steps, timed disclosures and testing requirements at every turn.

The good news is, origination technology is here that can handle all this change and keep mortgages flowing smoothly through the process.

But what should you look for in a solution? Do you want one that focuses on winning business? Or increasing productivity? Or pleasing your compliance stakeholders? Of course, the ideal solution meets the needs of all three.

A Complete Solution

Today’s borrowers are used to doing business in a world of instant results. They shop, book their vacations and even file their taxes online. With an online solution like MortgagebotPOS, for example, banks, credit unions and mortgage companies can capture applications from borrowers applying online at any time of the day or night, and further position themselves in their markets as convenient and service-focused.

As these loans work their way through the origination process, integrated back-end solutions like MortgagebotLOS, for example, let lenders improve productivity and responsiveness by alerting users of potential errors and red flags throughout the process, well before the loan closes.

Case in Point: Horizon Bank’s Story

One excellent example of the right way to leverage technology is Horizon Bank, a locally-owned community bank headquartered in Michigan City, Indiana. When Mortgage Business Analyst Joel Schaefer joined the institution in 2012, Horizon was at a crossroads.

“We were largely paper-based, and operating in a loan system that wasn’t compliant or efficient,” Schaefer explained. After an extensive search and a lengthy comparison process, Horizon Bank went with the D+H’s Mortgagebot platform, implementing its POS (point-of-sale) solution in 2010 and its LOS in 2013.

“We liked the fact that Mortgagebot was cloud-based. It gave our originators the flexibility to work securely from anywhere, and do it without carrying paper files out of the bank,” Schaefer said. “By choosing a SaaS solution, we no longer had to do system updates for new releases or compliance changes ourselves. All of that is handled for us.”

Choosing the Right Solution

If your institution is in the market for a solution that will serve as your roadmap through today’s challenging mortgage lending landscape, ask potential providers these questions:

>> Is your system configurable? The technology should adjust to fit your needs, instead of requiring you to change your operations to fit the technology.

>> Can you provide references? What do their customers have to say about agility, dependability, and industry knowledge?

>> Can it integrate with my existing systems? This is a “must have” in terms of transparency, efficiency and reduced margin of errors.

>> Do you offer cloud-based delivery options? A true SaaS “web-based” solution enables institutions to manage updates, without having to physically install the software or handle ongoing maintenance. For example, Mortgagebot solutions can be implemented in just 90 days or less.

Positioning for More Change to Come

No question — regulatory and compliance challenges have fundamentally changed how the mortgage lending industry operates, with no end in sight. A continuum of regulations, revised amendments and updated requirements looms on the horizon.

So, you need a vendor committed to helping mortgage lenders embrace the “new normal” through a SaaS-based solution, giving institutions customer-friendly access and automated compliance checkpoints throughout the workflow.

Modern financial institutions face challenges from all sides, but they don’t have to go it alone. With the right solution and a knowledgeable provider, you can regain your productivity, maintain compliance and get back to the business of making loans and serving your customers.

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Regain Productivity Through Technology

Scott-HansenMortgage lenders of today need to be agile; not only do they face competition from the growing ranks of online lenders, but they also need to keep on top of the ever-evolving requirements of compliance and new regulations, battling a constantly changing barrage of additional steps, timed disclosures and testing requirements at every turn.

The good news is, origination technology is here that can handle all this change and keep mortgages flowing smoothly through the process.

But what should you look for in a solution? Do you want one that focuses on winning business? Or increasing productivity? Or pleasing your compliance stakeholders? Of course, the ideal solution meets the needs of all three.

A Complete Solution

Today’s borrowers are used to doing business in a world of instant results. They shop, book their vacations and even file their taxes online. With an online solution like MortgagebotPOS, for example, banks, credit unions and mortgage companies can capture applications from borrowers applying online at any time of the day or night, and further position themselves in their markets as convenient and service-focused.

As these loans work their way through the origination process, integrated back-end solutions like MortgagebotLOS, for example, let lenders improve productivity and responsiveness by alerting users of potential errors and red flags throughout the process, well before the loan closes.

Case in Point: Horizon Bank’s Story

One excellent example of the right way to leverage technology is Horizon Bank, a locally-owned community bank headquartered in Michigan City, Indiana. When Mortgage Business Analyst Joel Schaefer joined the institution in 2012, Horizon was at a crossroads.

“We were largely paper-based, and operating in a loan system that wasn’t compliant or efficient,” Schaefer explained. After an extensive search and a lengthy comparison process, Horizon Bank went with the D+H’s Mortgagebot platform, implementing its POS (point-of-sale) solution in 2010 and its LOS in 2013.

“We liked the fact that Mortgagebot was cloud-based. It gave our originators the flexibility to work securely from anywhere, and do it without carrying paper files out of the bank,” Schaefer said. “By choosing a SaaS solution, we no longer had to do system updates for new releases or compliance changes ourselves. All of that is handled for us.”

Choosing the Right Solution

If your institution is in the market for a solution that will serve as your roadmap through today’s challenging mortgage lending landscape, ask potential providers these questions:

>> Is your system configurable? The technology should adjust to fit your needs, instead of requiring you to change your operations to fit the technology.

>> Can you provide references? What do their customers have to say about agility, dependability, and industry knowledge?

>> Can it integrate with my existing systems? This is a “must have” in terms of transparency, efficiency and reduced margin of errors.

>> Do you offer cloud-based delivery options? A true SaaS “web-based” solution enables institutions to manage updates, without having to physically install the software or handle ongoing maintenance. For example, Mortgagebot solutions can be implemented in just 90 days or less.

Positioning for More Change to Come

No question — regulatory and compliance challenges have fundamentally changed how the mortgage lending industry operates, with no end in sight. A continuum of regulations, revised amendments and updated requirements looms on the horizon.

So, you need a vendor committed to helping mortgage lenders embrace the “new normal” through a SaaS-based solution, giving institutions customer-friendly access and automated compliance checkpoints throughout the workflow.

Modern financial institutions face challenges from all sides, but they don’t have to go it alone. With the right solution and a knowledgeable provider, you can regain your productivity, maintain compliance and get back to the business of making loans and serving your customers.

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A Time To Gather

D+H announced that more than 2,000 financial services industry leaders have gathered at the Walt Disney World Swan & Dolphin Resort in Florida for Connections 2014, D+H’s client conference. D+H’s lending, core, channel, payment and optimization solutions power approximately 7,000 financial institutions in the United States and Canada. The conference allows D+H clients to connect and exchange new concepts with peers, and to hear from industry thought leaders and visionaries. Here’s what happened:

D+H CEO Gerrard Schmid kicked off the event by discussing industry trends and providing insight into his vision for the future. “As your partner, we are focused on connecting with you to understand your challenges, which is why we take great pride in hosting this event,” said Schmid. “The shifting landscape in banking and technology requires banks, credit unions, regulators and their FinTech providers to work more closely than ever. The challenges are daunting, but the opportunity to leverage these challenges to innovate are all the more exciting.”

This year’s conference marks a first for gathering Compushare, Mortgagebot and Harland Financial Solutions clients together under the D+H brand and was hosted on the heels of the one-year anniversary of D+H’s acquisition of Harland Financial Solutions. In addition to bringing together the Company’s unified client base of banks, credit unions, mortgage lending and equipment financing clients, the event also hosts a variety of strategic alliance partners, industry research and consulting firms and members of the financial trade press.

“Connections 2014 presents us with the opportunity to gather with our clients and other industry thought leaders to tackle the issues and opportunities facing our industry, educate them on the solutions we provide, learn about the best practices they have in place, and share our innovative ideas for the future,” said Bill Neville, president of D+H in the U.S.

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Lenders Want Complete Technology

Lenders are increasingly looking for a full solution. For example, Four Points Federal Credit Union has chosen D+H’s UltraDataEnterprise Core solution, along with additional integrated solutions from the company, including Cavion Internet Banking, Cavion Mobile Banking, Cavion Remote Deposit Capture, Item Processing Services, Touché CRM, MortgagebotLOS and MortgagebotPOS mortgage origination solutions and the Servicing Director loan servicing system.

“We looked for a partner who we believe has our best interests in mind, has a strong management team and is investing in the future, so we can focus on our core business – serving our members. D+H has a stellar reputation for support and innovation,” said Donnie Price, president and CEO of Four Points FCU. “We also plan to leverage the integration among all the D+H solutions to create a more seamless service experience for our members and our employees.”

Four Points Federal Credit Union, based in Omaha, Neb., selected D+H based on a combination of the extensive capabilities of the UltraData Enterprise Core Solution; its tight integration with the Company’s other channel, payment and lending solutions; and the Company’s reputation and proven track record surrounding client support and innovation.

“D+H is strongly positioned to help credit unions spend less time thinking about and deploying technology, and more time focusing on serving their members and building deeper relationships,” said Bill Neville, president of D+H USA. “By providing the best value for our clients’ technology investment, as well as first-class service, tight integration and product innovation, we enable credit unions to operate more effectively, while freeing them up to concentrate on their strategic objectives.”

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Lender Increases Production With Technology

It’s always good when technology pays off. For example, South Carolina-based AllSouth Federal Credit Union (AllSouth) completed 58 percent of its mortgage applications through Mortgagebot Advisor after just two months of going live with the Web-based solution.

Having used D+H’s MortgagebotPOS platform for years, most of AllSouth’s mortgage loan volume comes through its self-serve, online channel. To further enhance efficiency and member service, the credit union recently decided to enable its branch and call center staff to take mortgage applications as well. After adding MortgagebotPOS Advisor (though opting to not utilize the product and pricing engine as a way to best fit its needs), the institution quickly saw a significant boost in volume.

“I was delighted at the level of production after just one month,” said Thomas Boswell, vice president of mortgage lending, AllSouth Federal Credit Union. “MortgagebotPOS Advisor gives us the best of both worlds. We utilize our branch network to add convenience and provide better service to our members, but leave the in-depth mortgage discussions and analysis to staff members who are fully trained in this area of speciality.”

Using MortgagebotPOS Advisor, AllSouth captures walk-in and call-in business because more employees are equipped to collect the application data without being formally trained or experienced in mortgage lending.

From a convenience perspective, Boswell explained, MortgagebotPOS Advisor is a ‘win-win’ for AllSouth. “The applications come in electronically, so the solution eliminates the manual paperwork and re-keying typically generated by staff members collecting data. Our staff has remarked that they can’t believe how easy it is to use. Additionally, the great service we get from D+H is a key differentiator for us over competitors.”

The benefits AllSouth is seeing span beyond its staff. Having the additional branch and call center capabilities also equips the credit union to better serve its member base – regardless of the channel from which they initiate the mortgage loan process.

“We are thrilled to see the impressive results AllSouth is experiencing with MortgagebotPOS Advisor,” said Scott Hansen, senior vice president of marketing, D+H. “In this digital era, this example reaffirms the need for financial institutions to remain committed to offering the same services across multiple channels and touch points. We believe a channel synchronization model is critical to ensuring a superior member experience, while maximizing opportunities.”

Mortgagebot is a key component of D+H’s end-to-end lending platform and provides solutions for automating loan applications, pricing, approvals, disclosures, as well as processing, closing, imaging and secondary marketing.

D+H Is At It Again

*D+H Is At It Again*
**By Tony Garritano**

TonyG***After acquiring point-of-sale Mortgagebot and Web-based LOS Avista Solutions, Davis + Henderson Corporation (D+H) has now entered into an agreement to acquire Harland Financial Solutions (HFS). The purchase price for the Lake Mary, Florida-based HFS is approximately $1.2 billion in cash. Here’s why D+H says this deal makes sense for them:

****The acquisition enhances D+H’s competitive position as a leading North American financial technology (FinTech) provider to larger financial institutions, community banks and credit unions, according to D+H. In addition to D+H’s existing relationships with Canadian and U.S. financial institutions, the acquisition provides D+H with:

****>> A U.S. provider of lending compliance solutions for banks and credit unions of all sizes.

****>> A core banking technology provider in the U.S. that is coupled with several additional solutions that support online and mobile banking, online account opening, branch automation and commercial lending, all designed to help banks comply with an increasingly complex regulatory environment.

****>> 5,400 U.S. bank and credit union clients, bringing D+H’s total client base to over 6,200 financial institutions after accounting for shared relationships.

****Financially, the combination of D+H and HFS creates a company with:

****>> Pro forma 2012 combined annual revenue of approximately $1.1 billion of which approximately 90% is recurring in nature.

****>> 36% of 2012 revenue in the U.S. versus 8% for D+H pre-acquisition2.

****>> Pro forma 2012 combined Adjusted EBITDA of $291.5 million with 27.6% Adjusted EBITDA Margin and Adjusted Net Income1 of $123.4 million.

****>> Revenue visibility for the next two to three years from (i) HFS’ strong backlog1 of revenues estimated to be US$462.7 million and US$399.3 million as at December 31, 2012 and 2011 respectively, and (ii) 80% of HFS’ revenue being recurring in nature.

****>> Lower service line concentration (payment solutions will decline to 30% of revenue on a pro forma basis from 43% as at December 31, 2012).

****>> Potential synergies through cross-selling opportunities.

****D+H is acquiring 100% of HFS from its parent company, Harland Clarke Holdings Corp., at a purchase price of $1.2 billion. HFS’ Adjusted revenue was $296.8 million and $287.2 million for fiscal 2012 and 2011, respectively. Adjusted revenue for HFS includes non-cash fair value acquisition accounting adjustments, applicable in such periods only, related to deferred revenues. The purchase price for the acquisition will be paid in cash.

****“HFS’ services, including cloud solutions delivered on an account-based fee basis or in house depending on customer preferences, are the perfect complement to D+H’s portfolio business solutions, with limited overlap of clients or products,” said William W. Neville, President of D+H’s U.S. Operations. “The combination of our two firms will create a larger product and service portfolio for U.S. banks and credit unions who will now be able to access integrated, market-leading technology solutions through a single vendor. We are delighted to welcome HFS’ leadership and employees to D+H and look forward to working together in providing reliable, effective solutions that are relevant to our customers.”

****Raju Shivdasani, CEO of HFS, said: “The combination of D+H and HFS will create a powerful combination with both parties bringing significant capabilities to the North American FinTech market.”

****“We are excited by the prospect of becoming part of D+H and believe that this transaction is right for both our customers and our employees. We are joining a growing, trusted, customer focused organization that is committed to helping clients grow, compete, and offer their desired consumer experience. By combining organizations, we’ll be well positioned to do even more for customers in future,” said Bill Zayas, Chief Operating Officer of HFS.

****Closing of the acquisition is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the U.S. and other customary conditions and is expected to occur on or about August 19, 2013.

Lender Sees The Value Of Being Online

*Lender Sees The Value Of Being Online*
**Online Lending Growth**

money-icon***A review of more than 1,000 mortgage lending institutions using “smart” online lending technology has revealed that the online channel critically enhances banks’ and credit unions’ revenue growth. CapWest Mortgage, of Overland Park, Kans., for instance, underwent improvements in profitability, significantly expanding market share by growing loan volume from $1 billion to $1.4 billion between 2011 and 2012.

****The bank, a division of Farmers Bank & Trust, N.A., aggressively used Mortgagebot’s front-end point-of-sale automation, EnterprisePOS, to take in loan applications and engage customers throughout loan processing and underwriting. Collectively, users of the Mortgagebot Enterprise end-to-end lending platform took in more than 1 million applications in 2012, about a 50 percent increase over the 660,000 applications of 2011.

****“We are finding that there is a solidified commitment to ‘smart’ online technology deployment among lenders as they see a strong link between the online channel and their continued viability and profitability,” said Matt Cotter, senior vice president of sales and marketing at Mortgagebot, a D+H company. “In fact, Mortgagebot’s client numbers reached an all-time high in 2012 and our review also found that many lenders’ online volumes far eclipsed their traditional avenues of application, such as in-branch or over-the phone intake.”

****Industry fluctuations make online-application capability a necessity for long-term lending success. Built-in optimization of online-application capability has changed the face of mortgage lending because of its success in adjusting to external factors—for example, threat of the fiscal cliff and fluctuating interest rates. The channel, by far the lowest cost channel for loan-volume growth, can give lenders cost-efficient scalability through the right platform.

****CapWest Mortgage used Mortgagebot’s per-loan pricing scheme to take in more than 14,000 online loan applications in 2012 and projects volume will jump to 18,000 in 2013, provided interest rates remain similar to 2012 levels. The bank’s use of the platform’s automation, which eliminates redundancy and helps it maintain full regulatory compliance, also enabled loan originators to more quickly render a loan decision, further reinforcing profitability. Its loan officers closed on average 24 loans per month, reaping time savings of nearly 5,000 hours.