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Richey May Acquires Amata Solutions

Richey May, an accounting and advisory firm serving the financial services and real estate industries, has fully acquired Amata Solutions, a provider of customized planning and business intelligence tools for mortgage lenders. The acquisition comes three months after Richey May made an investment in the firm. Terms of the acquisition were not disclosed.  Amata Solutions is now part of Richey May Technology Solutions, Richey May’s technology consulting division launched last year.


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Benjamin Duke, Amata Solutions’ founder, has taken the role of executive director, data analytics with Richey May Technology Solutions, where he will be responsible for developing and delivering business analytics solutions for mortgage lending clients.  


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Amata Solutions provided planning, forecasting and business intelligence tools that empower lenders to make more confident, strategic business decisions based on real-time data. The tools it developed can be applied to all areas of the mortgage business and can be integrated across a mortgage lender’s platforms, including their customer relationship management (CRM) software, loan origination system (LOS) and general ledger software (GL). 


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 “We were confident that our clients would love Amata Solutions when we partnered with the firm three months ago, but we may have underestimated how much,” said Ken Richey, co-founder and partner of Richey May. “This acquisition puts Richey May in a perfect position to help mortgage lenders address tighter margins and lower volume so they can stay several steps ahead of their competition.”    


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“Since partnering with Richey May, we have been busier than ever,” said Duke. “There was so much synergy between Richey May’s consulting services and our products and services that it simply made sense to go ‘all in’ and join forces. Today, with our combined expertise and resources, Richey May is able to serve all of a lender’s accounting, consulting and data analytics needs more completely than any other company.”  

A division of Richey May, Richey May Technology Solutions offers a full spectrum of technology solutions, from cloud services and cybersecurity to marketing technology, and from governance, risk, controls and privacy to technology management consulting. 

Expansion Through Acquisition

Today’s vendors and service providers have to offer more. So, how are they doing? Some are going the acquisition route.

For example, Richey May, an accounting and advisory firm serving the financial services and real estate industries, has acquired two IT consulting firms that will enable the company to offer a more robust spectrum of IT consulting services for its financial services clients.

Arrow Partnership, a nationwide provider of management and IT consulting services, and Corporate Blue, a cybersecurity and managed IT services firm, will join the recently launched Richey May Technology Solutions division of Richey May. Both acquisitions will enable Richey May to address the growing IT demands of its mortgage banking clients, which include the needs for cloud-based managed services, strategic technology management consulting and cybersecurity risk assessments.

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“Arrow Partnership and Corporate Blue have excellent reputations for providing a wide range of IT consulting services that span multiple industries,” said Ken Richey, founding partner of Richey May. “As the demand for strategic IT planning and compliance intensifies, these acquisitions will ensure we are able to meet the needs of mortgage lenders for years to come.”

Founded in 2003 and based in Denver, Colorado, Arrow Partnership specializes in technology management, governance, risk, compliance and security consulting services, and digital marketing. Arrow Partnership’s managing partner and co-founder Chan Pollock will join Richey May as executive director of the firm’s technology consulting practice, while senior practice leader Garry Woods will head up the company’s governance, risk and controls practice.

Corporate Blue, based in Southern California, provides IT security, virtual chief information security officer services, cloud security and managed IT services. Mike Wylie, co-founder and CEO of Corporate Blue, will join Richey May as a director in the firm’s cybersecurity practice.

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“In this day and age, strategic IT decisions are a cornerstone of any company’s financial health and potential for growth,” said Wylie. “I am delighted to join Richey May, a company firmly committed to helping companies leverage technology wisely to achieve their goals.”

“I’m thrilled to be joining Richey May and have been extremely impressed with their capabilities and dedication to helping lenders run more efficient, profitable and secure businesses,” said Pollock. “I look forward to leading the firm’s technology management consulting practice and working directly with clients to ensure they receive the highest level of expertise in the mortgage industry.”

Richey May Technology Solutions is a results-driven division of Richey May offering the full spectrum of technology solutions, including cloud services, cyber security, marketing technology, governance, risk, controls, privacy and technology management consulting. Led by technology experts with decades of cumulative experience in executive IT roles, the team is focused on providing pragmatic, real-world solutions that deliver value to their clients’ business.

Also, Sandler, LLC (d/b/a Sandler Law Group), has acquired the business operations of McGlinchey Stafford & Youngblood and Associates PLLC (MSYA), a premier closing and fulfillment services provider for the mortgage lending industry.

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This acquisition further enhances the mortgage compliance and origination ecosystem built by regtech investor and regulatory expert Andy Sandler. Asurity Technologies, a leading provider of compliance management and mortgage loan document technology, expands its operations into mortgage closing and fulfillment. All legal services previously undertaken by MSYA will now be performed at Sandler Law Group.

“With this acquisition, Asurity Technologies and Sandler, LLC have further implemented our strategy to set a new mortgage industry standard for economically efficient and fully compliant software and transaction support services,” says Andy Sandler, CEO of Asurity Technologies and Managing Partner of Sandler, LLC.

“We are excited to join the family of companies Andy Sandler has built to offer our clients expanded mortgage closing services. We are now able to provide mortgage lenders access to a powerful ecosystem with known experts in legal, compliance, services, and technology. This is a great opportunity to provide the marketplace with deeper resources and increased efficiencies,” says Vicki Murphy-Gee, Vice President of Sales, Asurity Services and Executive Director, Sandler Law Group.

Asurity Technologies now provides a full range of compliant mortgage documents and mortgage closing and fulfillment services including outsourced closing functions and CD preparation and legal review, wire orders, funding, and shipping, through a team of over 150 mortgage lending specialists and technologists and affiliated legal experts at Sandler Law Group.

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The Return Of Independent Mortgage Bankers

Richey May & Co has released its second quarter 2014 Trend Report for Independent Mortgage Bankers. The Trend Report includes the operating results of 37 independent mortgage companies throughout the US and covers all operating models and production volumes.  According to the report, loan production among independent mortgage bankers increased by 50 percent over the previous quarter, the first increase in the past three quarters. Purchase volume spiked 62 percent, while refinance volume increased 20 percent over the first quarter 2014.

Unfunded lock pipelines increased among independent mortgage bankers as well, rising 38 percent over the previous quarter. According to Kenneth Richey, managing partner of Richey May, this uptick indicates that the improved market conditions will continue through the coming months.

“The increase in unfunded lock pipelines suggests that we can expect to see similar, if not more improved, production in the third quarter of 2014 as well,” Richey said.

In addition to the increase in production, independent mortgage bankers improved profits by an average of 57 basis points, with many realizing up to 100 basis points in improved pre-tax profits over the previous quarter.

The Trend Report for Independent Mortgage Bankers was generated from the results of Richey May Select, the industry’s only benchmarking technology specifically for independent mortgage bankers. The software, which provides up-to-date peer-to-peer benchmarking information on various aspects of their businesses—such as financial, production, employment, warehousing and servicing operations—analyzes data submitted by independent mortgage bankers across the U.S., and compiles a report of the quarter’s notable trends. The quarterly Trend Report highlights key performance indicators, such as overall volume and volume by transaction type, as well as loan margins, operating costs, labor output, and more.

The data used in the report is gathered from Richey May Select subscribers and is provided at no additional costs to the participants.  All data sources are kept confidential.

“Independent mortgage bankers’ unit volume, expenses and margins were very close to those they experienced in the third quarter of 2013,” said Keith May, Richey May’s managing director, advisory services. “However, pre-tax profits in the second quarter of 2014 were much higher than in the third quarter of 2013. This is probably because third quarter 2013 was in the middle of a declining market, whereas second quarter of this year was in an improving market.”

Richey May Select is the only tool of its kind that provides independent mortgage bankers with fingertip access to a peer-to-peer comparison of how their businesses rank against other companies of similar size and operational focus. Unlike static benchmarking reports, with Richey May Select, all information is current and available approximately six weeks after the end of each quarter.

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Independents Feel The Pinch

Richey May and Co. has released its first quarter 2014 Trend Report for Independent Mortgage Bankers. According to the report, loan production among independent mortgage bankers continued to decline in the first quarter of 2014, falling 18% since the fourth quarter of 2013. Purchase volume decreased for the third consecutive quarter, dropping 13.7%. Margins increased by 28 basis points – the result of an 11-basis point decrease in origination fees, and a 39-basis point increase in secondary gains.

“Independent mortgage bankers are taking less in origination fees, but are making more from gains on sale into the secondary market,” said Kenneth Richey, managing partner of Richey May.

“This suggests that lenders are responding to the QM fee cap,” he explained, speaking of the Qualified Mortgage rules that impose a three percent limit on the amount a lender can charge in origination fees. “Rather than earning on the front end, they’re increasing margins on the secondary sale.”

Each quarter, Richey May uses Richey May Select, a benchmarking technology specifically for independent mortgage bankers, to analyze data submitted by independent mortgage bankers across the U.S., and compile a report of the quarter’s outstanding trends. The report highlights key performance indicators, such as overall volume and volume by transaction type, margins, operating costs, labor output, and more. The data used in the report includes much of the same information that its confidential lender participants provide to the GSEs each quarter via the Mortgage Bankers’ Financial Reporting Form (MBFRF).

Additional findings in the first quarter 2014 trend report include the following:

>> The principle balance of unfunded locks increased by 40.5%, rebounding to levels last observed in the 3rd quarter of 2013

>> Pre-tax profits improved by 0.25%, primarily due to increased secondary marketing gains and gains related to bulk sales of servicing rights

>> While production continued its decline, the rate of decline slowed in the first quarter of 2014

>> Non-loan originator staffing was reduced by an average of 14 employees, or 6% of all non-loan originator staff, since the third quarter of 2013

>> Per-staff productivity has declined by 1.8 units per non-loan originator staff member, and by 1.6 units per loan originator, since 2012

>> Lenders cut operating expenses by 13%, but operating expenses increased by an average of $234 per loan, the result of higher occupancy and marketing expenses, which rose by $106 and $119 per loan, respectively

Servicing revenue contributed 12 basis points to survey participants’ bottom lines during the 1st quarter of 2014, up from six basis points for the 4th quarter of 2013. The majority of servicing revenues resulted from bulk sales of servicing portfolios, which accounted for 83% of all net servicing revenues.

Despite continued rising costs, Richey May Select survey participants achieved nearly break-even pre-tax profits for the 1st quarter of 2014, showing a 25-basis point improvement over the previous quarter. Lenders generally compensated for heightened operating and personnel costs by increasing loan margins.

“Lenders are pin-pointing the most effective ways to compensate for lower production levels,” said Richey. “Servicing is playing a major role in increasing revenue, and streamlining operations and reducing personnel is one of the major ways they’re cutting costs. If an independent mortgage banker is struggling significantly and isn’t taking the same approach regarding servicing, operations and personnel, it really should look to what its peers are doing to successfully cope with today’s market conditions.”

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It’s Hard Out There For Lenders

We all know that the mortgage industry isn’t easy for lenders looking to get more volume and technology vendors looking to get more clients, and now there’s some data to echo this sentiment. Richey May & Co has released its fourth quarter 2013 Trend Report for Independent Mortgage Bankers. Among the report’s findings are reductions in production, refinance and purchase volumes, and decreases in the average FICO score of borrowers. The fourth quarter 2013 Trend Report was based on information provided by 29 independent mortgage banking firms.

Richey May is a provider of accounting and business advisory services to the mortgage industry and co-creator of Richey May Select, a benchmarking technology platform specifically for independent mortgage bankers. Richey May quarterly trend reports, which are created using Richey May Select, highlight key performance indicators, such as overall volume and volume by transaction type, margins, operating costs, labor output, and more. These reports are provided free of charge to all Richey May Select subscribers.

The following are some of the report’s findings:

>> Overall production volume decreased by an average of just under 11%. Most lenders saw production decline between 6% and 55%.

>> Refinance volume fell 9%, and purchase volume decreased nearly 12%.

>> The distribution of FICO scores changed by 2%, with lenders closing more loans with FICO scores ranging from 651 to 700, and fewer with FICO scores above 750.

>> Approximately one third of lenders that had not previously extended credit to borrowers with scores under 600 began to do so during the 4th quarter of 2013.

“Lenders are trying a lot of different things to keep production levels up – lending to borrowers with lower FICO scores is just one of them,” said Ken Richey, managing partner of Richey May. “In order to maintain a competitive edge, lenders need to know what their competition is doing. This is one of the reasons that reports like our quarterly trend reports are so important. They give independent mortgage bankers an apples-to-apples comparison of their company’s performance to that of their peers and specific market.”

Richey May Select utilizes much of the same information that its independent mortgage banker sources provide to the GSEs each quarter via the Mortgage Bankers’ Financial Reporting Form (MBFRF). With Richey May Select, users can access current, relevant, and actionable peer-to-peer benchmarking information on various aspects of their financial, production, employment, warehousing and servicing operations. Lenders can tailor results based on their competitors’ loan production volume; primary operating model – whether retail, wholesale or direct-to-consumer; small, medium or large production platforms; and other unique characteristics and requirements. Unlike static benchmarking reports, with Richey May Select, all information is current and available roughly six weeks after the end of each quarter.

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