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Optimal Blue And Arch MI Integrate

Optimal Blue has integrated with Arch Mortgage Insurance Company. Arch MI customers who use Optimal Blue’s eligibility and pricing services will now have real-time access to Arch MI’s competitive pricing and Rate Quote workflow within Optimal Blue.

Arch Mortgage Insurance Company (“Arch MI”), is a leading provider of private mortgage insurance and wholly owned subsidiary of Arch Capital Group Ltd.

The Optimal Blue integration engine is based on Mortgage Industry Standards Maintenance Organization (MISMO) standards and will support requests for Arch MI’s mortgage insurance premium rates for up to five loan products for each borrower scenario. In addition, the integration accommodates several new Arch MI features that further streamline and simplify the process for customers using Optimal Blue:

>> Real-time access to Arch MI’s competitive rates

>> Ability to share Rate Quote results with other team members

>> View, save and print Rate Quote results in a user-friendly document format

>> Link to ArchMIConnectto order MI and complete the MI origination process

“Arch MI’s integration with Optimal Blue reflects another important step in our commitment to meet customers’ needs,” said David Gansberg, Chief Executive Officer of Arch MI. “Our partnership with Optimal Blue will reduce turnaround times for lenders, boost their efficiency and drive their business growth. Optimal Blue’s technology platform represents an important innovation in mortgage industry technology and creates new standards for productivity.”

“For Optimal Blue and Arch MI customers at the point-of-sale for loans that require MI, Arch is a new and exciting option that offers vital, real-time information,” said Larry Huff, Co-CEO of Optimal Blue. “Lenders are empowered to make an informed decision on Arch MI products at the point of sale. This partnership demonstrates both companies’ commitment to deliver value to our mutual customers and consumers as well an effort to automate workflow and improve access to information.”

Arch MI and Optimal Blue are jointly hosting a Webinar for customers on August 19, 20 and 21, to educate them on the new interface and guide them through the process for requesting MI premium rates from Arch MI.

Interesting New Technology Offerings

As we strive to keep you up to date on the latest technology, we keep an eye out for new products hitting the market. Just yesterday I was told that Optimal Blue, a cloud-based provider of enterprise level pricing, point-of-sale, compliance and secondary marketing automation services for the mortgage industry, demonstrated innovative new services that will address compliance in Fair Lending and empower lenders with real-time market pricing intelligence.

The 3rd Annual Optimal Blue Client Conference was buzzing with anticipation over adding the patent-pending real-time lock monitoring functionality, incorporating the “Equivalent Rate” feature, to their Optimal Blue Advantage real-time Fair Lending solution. When applied to a mortgage lender’s locked pipeline, the Equivalent Rate calculations immediately highlight any loans that may not have been priced equally. “Our clients can greatly reduce the chance for rate disparity and pricing discrimination,” said Tammy Butler, Director, Fair Lending and Compliance. “They need this now more than ever!”

Also introduced was Optimal Blue Insight, a real-time pricing analysis service. “Our customers can now benchmark pricing against their peers at the local market level,” said James Rowe, Managing Director, Data and Analytics. “We provide actual retail lender pricing – not survey responses – from the leading product and pricing engine in the mortgage industry.”

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Making Each Integration Matter

No technology firm is an island in and of itself. The right integrations can make all the difference. For example, origination vendor Wipro Gallagher Solutions has integrated its NetOxygen loan origination software with Optimal Blue’s enterprise-level product, pricing, secondary marketing and compliance automation platform for the mortgage industry. Here’s why:

Fully embedded within NetOxygen, Optimal Blue’s product and pricing engine enables NetOxygen users to access accurate, best-fit rates and loan pricing scenarios for nearly 200 investors at the push of a button. Since the two-way interface automates loan data sharing, the lender no longer needs to maintain rates and product guidelines for all the different investors, which saves significant time and effort. Now, users can manage lock requests and confirmations in real time, without ever leaving the NetOxygen system.

The integration also includes Optimal Blue’s secondary marketing platform, which enables users to hedge their pipelines as well as determine the best execution and allocation of their loans in real time. The integration significantly improves efficiencies; users no longer need to export pipeline data to a file and reimport that data to a hedge system.

“Accuracy, automation and transparency are three essential ingredients needed to sustain a profitable enterprise in today’s volatile market,” said Larry Huff, co-CEO of Optimal Blue. “By streamlining the cumbersome product, pricing and secondary marketing workflow process, this interface provides our common customers with a powerful addition to their survival toolkit. Wipro Gallagher Solutions embraced the philosophy that a user should be able to utilize any feature of either system seamlessly without disruption to their workflow, which is the mindset that is shared by both companies and required to best serve our collective customers.”

“Wipro Gallagher Solutions’ technology integration philosophy is that a solution must do more than deliver flashy features and functions; it must deliver value to our customers and in any market conditions,” said Narayan Bharadwaj, general manager and business head at Wipro Gallagher Solutions. “ This seamless system integration not only improves efficiencies for our customers but it also delivers unfettered access to accurate product and pricing data which ultimately helps our customers make more profitable decisions in a trying market.”

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Have You Heard?

The story broke yesterday, but just in case you haven’t heard yet, Optimal Blue, a provider of pricing, point-of-sale, compliance and secondary marketing automation services for the mortgage industry, has acquired one of its competitors, LoanSifter, Inc., a provider of product eligibility and pricing, point-of-sale and marketing solutions for mortgage lenders. Here’s the story:

The sale price was not disclosed. Optimal Blue is clearly looking to establish itself as the dominant standalone pricing solution having acquired another competitor, Sollen, just recently. And this is probably a smart move given that major pricing vendors like ARC Systems, NYLX, and Commerce Velocity have all either been acquired or gone out of business. Similarly, leading LOS companies realize that this function really needs to be a core part of their system and firms like Ellie Mae, Calyx Software and Mortgage Builder have all acquired pricing vendors themselves and have successfully integrated them into the core LOS offering. The days of the standalone pricing vendor having a viable business may just be behind us.

As a result of the Optimal Blue acquisition of LoanSifter, LoanSifter’s operations, employees and customer relationships will immediately become a fully integrated part of Optimal Blue. The new company will have more than 1,500 customers, 200 employees and three offices nationwide with headquarters in Plano, Texas. Terms of the acquisition were not disclosed.

Founded in 2004, LoanSifter provides content and technology that is used daily by tens of thousands of mortgage professionals to search loan products and guidelines from more than 185 investors. LoanSifter offers a diverse suite of services to mortgage bankers, credit unions, community banks and brokers, including a managed-content pricing engine, point-of-sale solutions, marketing and automated quoting.

Larry Huff and Ivan Darius, co-CEOs of Optimal Blue said, “This is a rare opportunity to combine the strengths of two organizations with exceptional track records and capabilities and focus on the same mission, which is to more effectively provide innovative products and services to our combined customers.”

“LoanSifter’s commitment to innovation has helped lenders grow their business and streamline their origination process,” said Bruce Backer, former president of LoanSifter. “That commitment continues with this acquisition.”

A Unique Integration

*A Unique Integration*
**By Tony Garritano**

TonyG***I always like to bring you the latest information on unique integrations. In this case, I just heard that Optimal Blue has completed a new integration with Byte Software’s BytePro loan origination software (LOS). This integration also includes Optimal Blue’s best-in-class execution and pipeline management technology via Secondary Interactive, enabling users to take a loan seamlessly from origination through sale. Here’s the scoop:

****The integration gives BytePro users access to Optimal Blue’s pricing and secondary marketing platform, enabling originators to respond quickly to prospective borrowers with precise and reliable data. That information then automatically populates the loan file within BytePro, eliminating keying errors and saving originators’ time. The interface with Optimal Blue gives BytePro users a competitive advantage by enabling them to provide better service and more options to their borrowers.

****The integration is the first to support Optimal Blue’s new historical pricing and Fair Lending-related features and services. These enhancements reflect the most significant advancements since Optimal Blue was founded ten years ago.

****“Optimal Blue is the only company that creates integrations that are true marriages of two platforms,” said Larry Huff, co-CEO of Optimal Blue. “It’s not a file drop or a simple data transfer – it is actually so technically advanced that users create their work in one place and it seamlessly moves from one system to another. This is a huge differentiator and one that our customers appreciate, particularly when it allows them to be more efficient, profitable and compliant throughout their mortgage operation. Optimal Blue is often asked by its customers for guidance when selecting a new LOS; this depth of integration is the new standard for us and is already gaining traction in the market.”

****“Byte strives to give customers every advantage, whether it’s a thriving or challenging environment,” said Joe Herb, General Manager of Byte Software. “The integration with Optimal Blue exemplifies that mission, providing access to a powerful platform and leveraging automation to drive greater efficiencies. Every LOS is working to create integrations with industry-leading companies. This integration is truly different, raising the bar and moving the standard of integrations forward by implementing best-of-breed practices and creating a true three-way exchange between Byte Software, Optimal Blue and Secondary Interactive.”

Lenders Search For Accuracy And Transparency

*Lenders Search For Accuracy And Transparency*
**E Mortgage Management, LLC Profiled**

***In a world where new rules and regulations are being placed on the lender, sometimes daily, the need for a flexible technology solution is paramount. In addition, lenders are looking to ensure both accuracy and transparency. In this case, Haddon Township, New Jersey-based E Mortgage Management, LLC, (EMM), has selected Secondary Interactive, a provider of mortgage pipeline risk management, best execution and loan allocation services and technology, for its end-to-end enterprise level secondary marketing automation platform. Here’s why:

****President of E Mortgage Management, LLC, Kevin Crichton, is a former SVP with Bank of America, where he oversaw the product and pricing home loans division. Because of that experience, Crichton had a tremendous amount of knowledge about third-party hedge firms. Additionally, having worked in secondary marketing for more than two decades, Crichton knew precisely what he wanted in a hedge firm. EMM selected Secondary Interactive for several reasons, including the firm’s reputation, partnership approach and the triple play functionality, which seamlessly connects the database of record with Optimal Blue and Secondary Interactive.

****According to Crichton, “EMM has seen incredible growth over the past few months and moving to a trading environment enables us to increase our profitability and efficiency. Those efficiency gains ultimately benefit the consumer, as EMM can then lower costs and pass them along to the consumer. At the end of the day, we needed a straightforward platform that is timely and accurate, yet allows us to create custom reports. With Secondary Interactive, we get a darned good product at a great price with the proverbial icing on the cake being the triple play functionality. With multiple moving parts, integrations can be challenging, but in this integration every system talks to each other seamlessly – it’s simply flawless.”

****EMM leverages the “Triple-Play Functionality”, the seamless platform that connects the Database of Record/Loan Origination System with the Optimal Blue and Secondary Interactive systems. According to executive management, Secondary Interactive is the only risk management and analytics provider connected to an LOS and pricing engine, allowing for the real-time information flow between the three systems. As opposed to usual integrations that funnel data through file drops, the integration between DataTrac Originator, Optimal Blue and Secondary Interactive is truly seamless, with users able to push data back and forth between the systems in virtually real-time.

****“From inception, our corporate culture has always been customer-centric – we don’t want to be just a vendor, we strive to be a partner,” said Don Brown, co-CEO of Secondary Interactive. “For savvy mortgage banks, like EMM, that’s hugely compelling. Clearly, Kevin understands the business and how to manage fallout, so at the end of the day selecting Secondary Interactive is a big compliment to our system.”

Understanding The News: Stretching Partnerships Even Further

*Stretching Partnerships Even Further*
**Alliances Tighten**

***The mortgage industry is very complex. As a result, more and more companies are looking to other companies to form synergies. For example, PROGRESS in Lending has learned that United Guaranty, a national mortgage insurance company, announced today an expansion of its strategic alliance with Optimal Blue, the award winning comprehensive, Web-based platform that couples pricing and secondary marketing automation with content management for the mortgage industry. Here’s the scoop:

****United Guaranty customers can receive United Guaranty MI rate quotes and pull MI rate history while searching for investor pricing and eligibility in Optimal Blue. Under the agreement, within Optimal Blue, United Guaranty automatically delivers a mortgage insurance quote for up to five products at a time along with locking capability to originators who have a master policy, and an MI premium estimate to lenders who have not established a relationship with United Guaranty.

****“This added functionality gives users mortgage insurance pricing and comparisons to FHA pricing—without leaving Optimal Blue,” said Chris Clement, SVP-Field Production at United Guaranty. “We’re leading the industry in the investments necessary to simplify processes for customers and help loan officers get borrowers in the right loan.”

****In today’s environment, lenders must leverage every advantage to respond to consumers quickly and accurately. Within the Optimal Blue platform, users now have access to United Guaranty’s Performance Premium risk-based MI pricing, enabling them to receive either an instant estimate or a detailed quote. Users can pull a PDF of the MI quote, and because each loan has an MI history, users can also go back at any time if the loan criteria change and a new quote is needed. Users also have the option to lock the detailed quote with UG at any time.

****“Optimal Blue has always prided itself on being able to deliver the most value to mortgage lenders,” explains Lawrence Huff, co-Founder and co-CEO of Optimal Blue. “This partnership exemplifies that philosophy – as it gives customers the ability to not just lock in an MI quote, but to stay within the Optimal Blue platform. We continue to advance our platform to create the most automated workflow, giving our customers accurate data quality, better control and compliance, and improved profitability.”

****“This exclusive partnership with Optimal Blue shows our commitment to provide MI accessibility in all scenarios. This lets originators get a rate quote quickly and easily, cutting the time required to know a loan’s cost,” said Clement. “Providing the MI quote during the eligibility stage lets users know in one location that they’ve met general MI requirements.”

Technology Spotlight: Lender Cashes In, Gains Efficiency

*Lender Cashes In, Gains Efficiency*
**First Centennial Mortgage Profiled**

***First Centennial Mortgage has maximized secondary market revenue and efficiencies using the Secondary Interactive platform. Many lenders transition to mandatory delivery specifically for the financial gain, however, as exemplified by First Centennial, the operational benefits can be equally significant. Here’s how significant:

****According to executive management at First Centennial, a substantial operational impact was felt on the lock desk, where the company leveraged automation to create a more efficient workflow, enabling them to redeploy resources and save overhead costs. The workflow is driven by SI’s real-time data, another advantage for First Centennial, providing the opportunity to create a faster, more efficient flow of the file – the quicker those loans are out the door and purchased, the bigger the mark up for the lender.

****According to First Centennial’s Executive Vice President, Dave McCormick, “For a lender, identifying leakage is the Holy Grail – figuring out where your risk or problem areas are can be critical to secondary market health. Using SI’s tools, and more specifically, reporting tools, we are able to identify the smallest amount of leakage down to a very granular level. The difference between great programs, such as SI, and others in the market is the ability to identify errors and leakage. SI’s platform spotlights the issues using real time data, which then allows First Centennial to maximize secondary marketing revenue and efficiencies through best execution and loan allocation optimization.”

****First Centennial also benefits from the integrated platform with Optimal Blue (“OB”), ensuring loans being committed in the platform are guaranteed to have a saleable loan matched to Optimal Blue’s investor overlays. One mismatched loan can be very expensive to correct, and the unified platform between SI and OB enables First Centennial to deliver loans with virtually no opportunity for slippage.

****McCormick continued, “For lenders without a product eligibility and pricing engine (PPE), this process can be daunting. We got comfortable with a PPE and best efforts first, getting the staff used to a centralized lock desk. After that, making the move to mandatory was not difficult. SI was a great partner, who made the transition seamless – from educating us to securing investor relationships. SI held our hand throughout the process to ensure a smooth experience.”

****Don Brown, co-president of Secondary Interactive said, “First Centennial is a lender that “gets it”. They understand how to succeed, and their staff is made up of intelligent, talented people that know how to take advantage of automation to create benefit. Whether our clients are looking for a partner or looking for the best technology, SI is the right platform. There is no better opportunity for a lender than the use of real time, accurate data. We are the only platform that has it and it shows – our customers are successful and empowered. We appreciate customers like First Centennial, we invest in their success and when they win, we do too.”

The Secondary Desk: A Paradigm Shift

*Navigating A Changing Market*
**By Ivan Darius**

***The mortgage industry is undergoing a vast and dramatic shift. It’s more than regulations or investor relations; we are looking at an actual shift in the paradigm of how the mortgage product is assembled. While process management still plays an important role, we are seeing a fundamental shift towards more active management and more intense verification of data.

****Most existing “Database-of-Record” systems are not designed for this paradigm; instead they are primarily used to capture the data. But it’s not good enough to just have static, end result, data. Particularly for compliance, mortgage bankers need to understand where the information came from, what the context was when it was collected, and how it might be needed in the future. Of course, if we can all agree that data quality is the key, the questions center around when and how the data is validated. Do a simple Google search on loan data quality and more than 20 million hits are returned, most of them from vendors promoting loan quality. And what is technology’s role?

****Reading some of the articles, it’s clear that most of what is written is based on the perception of how a mortgage is underwritten and processed. In reality, it’s more about the workflow, access to information in the form of data, open systems, seamless unification of platforms, and Software-as-a-Service, or cloud-based environments that promote greater agility to be able to assemble and validate information in an automated fashion. It’s also about drawing a line between the origination process and data quality. Origination focuses on gathering facts about the consumer and the collateral, processing the data, and efficiency. Data quality and validation is (should be) done in parallel. Working symbiotically with the LOS, constructing and validating the mortgage product and loan level information in a separate system or process, that can then be merged with information in the “Database-of-Record”, ensuring a validated loan file that has minimal repurchase and compliance risk.

****For lenders, it makes sense for that parallel system to be an adaptive product-eligibility, pricing and secondary marketing automation platform. In the last few years these systems have evolved from core pricing and eligibility engines, to a much more complex platform. In the early days of PPE’s, it was a loan officer product and search tool that included basic automation of the locking process. Today, the workflow has matured adding things like automated underwriting, mandatory delivery, hedging and loan committing, consumer point of sale, investor credit overlays, etc – all things that have significantly enhanced the origination and lender workflow functionality. This information is so fundamental to creating a mortgage that it needs to be accessible from the consumer to capital markets and any point in the workflow between. By continually validating the loan level data throughout these steps, a lender is ensured that the output is a higher quality and compliant loan. Investor credit overlays are a good example. All of the above allows lenders to manage risk from the standpoint of both origination and capital markets.

****As the mortgage process evolves, and compliance grows in scope and importance, it is imperative that the industry evaluates how the market is changing and adjusts accordingly. Today, alongside LOS and servicing systems, product, pricing and secondary marketing automation platforms are equally, if not more, relevant. In the proper implementation, these platforms work hand-in-hand, creating a workflow designed to support the industry’s move towards data verification and compliance.

The Secondary Desk: Track Performance

*Knowing the Details Makes All the Difference*
**By Don Brown**

***Reporting can change the way that mortgage bankers think about and gauge their secondary marketing performance. To be able to manage your company successfully, you need to understand the efficiency of your processes including the pricing, lock desk, loan processing, hedging, and loan commitment functions of your business.  Understanding these efficiencies empowers you to make the incremental process improvements that result in higher profits.

****A challenge we often face is the association of poor secondary marketing performance, or in popular terms – leakage, with an inefficient hedge.  While there is no doubt some inefficiencies in any hedging process, the culprits for poor secondary marketing performance are more likely to result from other structural or operational inefficiencies.

****This is where strong reporting and data management comes into play.  If you can identify, at a loan level, the base pricing, potential sale price at lock commitment, pre-determined profit margin, and final sale price, you can deduce actual performance over margin and how that compares to potential performance.  With good data management practices, you can then dissect what factors caused the leakage.

****Some of these factors are inherent and unavoidable.  For example, the cost of trading a mortgage backed security that is used as a hedge instrument is a necessary and identifiable component that prevents you from realizing the “theoretical” mandatory spread.   While this cost needs to be managed, it never will be eliminated.

****Other factors, however, can be eliminated with good management – if you can identify them.  Identifying how much leakage was caused by free extensions, program changes, loan commitment mistakes and eligibility changes all can help you develop management strategies designed to streamline efficiency.  Further, identifying inefficiencies in the hedge coverage can help you hone your trading to increase profitability.

****Ultimately, the goal is to enable mortgage bankers to identify the specific factors that eroded performance and quantify the fiscal magnitude of each factor.  With this information, mortgage bankers can identify leakage quickly and take action to minimize it.

****SI recently deployed its Mark to Market (“MTM”) Variance report which provides a detailed analysis of how a client’s MTM has changed from day-to-day, along with a detailed quantification of factors that contributed to this change.

****The report also provides loan and trade level details of those quantifications, which is the type of information needed to implement the management strategies necessary to boost efficiency and profitability.

****With the MTM Variance Report, mortgage bankers can understand the fiscal impact of all of the following factors:

****>> Day to day loan valuation variations;

****>> Daily changes to the existing pipeline eligibility;

****>> New loans coming into the pipeline;

****>> Loans that were relocked;

****>> Loans that were cancelled;

****>> Loans that were taken out of commitments; and/or

****>> Loans that were purchased.

****On the trade side, you can now immediately understand the impact of:

****>> New trades;

****>> Changes to existing forward commitments;

****>> New commitments;

****>> Newly filled commitments;

****>> Newly filled; or

****>> Closed trades.

****With reports like the MTM Variance Report, mortgage bankers now have the power to understand what factors are impacting their hedge, and also the magnitude of the impact.  More importantly, they have the power to take the steps necessary correct or address any issues in a surgically precise, loan level manner.

****Knowing this type of information helps mortgage bankers make the right decisions using the right information, at the time when the decision needs to be made.