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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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Point-Of-Sale Trend Watch: Thinking About An Online POS Solution? Don’t Let Misconceptions Stop You

*Thinking About An Online POS Solution? Don’t Let Misconceptions Stop You*
**By Scott Happ**

***In our four previous columns for Progress in Lending, we’ve told you about how Mortgagebot engaged Lieberman Research Group (LRG) to survey banks and credit unions from coast to coast. LRG’s primary goal was to determine lenders’ plans to adopt  “smart,” fully transactional, online mortgage-point-of-sale (POS) technology (refer to our previous articles for more details about the LRG study).

****Also as noted in our previous articles, LRG was able to survey 330 mortgage decision-makers, and their research confirms that the majority of financial institutions foresee solid, near-term growth in loan volume from the online channel. The study’s other key findings reveal that most lenders now consider smart, online POS technology as a “must-have;” that lenders go online primarily to serve borrowers better; and that they believe POS channel integration will play a key role in their future business success.

****Trend #5: Misconceptions are still keeping some lenders away from the Internet

****Smart, online mortgage-application technology is not new—it has been available to banks and credit unions nationwide since 1997. But despite the fact that more than 1,000 lenders across America have implemented a smart, online mortgage-application solution, others continue to resist the technology. The LRG survey reveals that for lenders that do not currently provide a smart, online mortgage application and do not intend to do so, three primary issues stand in their way (Figure 1):

  • ****>> Security concerns
  • ****>> Regulatory challenges
  • ****>> Cost issues

****But are those concerns truly valid? Viewed from another perspective, the question could be more appropriately asked: “Do lenders that adopt smart, online mortgage-application solutions find themselves struggling with security concerns, regulatory challenges, and cost overruns?”

****To get another perspective, Lieberman turned to the survey sponsor. Mortgagebot has been the mar­ket leader in online-lending technology since 1997, and has a client base of about 1,000 banks and credit un­ions. Our company closely tracks how organizations are addressing issues of online-lending security, regulatory compliance, and costs. According to Mortgagebot, a more balanced view of the “top three objections” can be gained by carefully examining each concern in the light of real-world experience:

****Security concerns

****Are you concerned about data-security breaches? You should be; and you should ask detailed questions about any solutions provider you consider. The truth of the matter, however, is more positive than you might expect. Although it seems that the media reports data-security breaches every week, such failures are actually not common—and certainly not inevitable. Advanced security strategies (such as those maintained by Mortgagebot) can dramatically reduce risk.

****While no technology provider can guarantee that a security breach will never occur, Mortgagebot has a reputation for working exceptionally hard to ensure that all lender and borrower data are extremely well protected. We aggressively secure all sensitive information by using cutting-edge technology that includes multiple, disaster-proof remote servers; redundant data back-ups; stringent, multi-level security protocols; extensive data encryption; and rigorous independent audits.

****Regulatory challenges

****A properly designed mortgage-application solution does not create regulatory problems; instead it helps a lender to more effectively manage regulatory compliance.

****An example is Cashmere Valley Bank, a billion-dollar institution based in Cashmere, Wash. “Our compliance used to be all manual,” said Ken Martin, Cashmere Valley President and Chief Executive Officer.

****Martin said that when his organization decided to implement an online lending solution, compliance was his top concern. “Even with skilled people,” he noted, “things can get sloppy when you get busy. But now our automated solution enables us to do everything correctly—it gives us the control we need.”

****Cost issues

****As with any business tool, there are costs associated with a technology implementation. However, a lender’s real concern must be with managing overall costs—which is where online lending technology typically generates a solid return on investment (ROI).

****An example is NCB, FSB of Hillsboro, Ohio. NCB has more than $1.6 billion in assets, is a mortgage lender in 17 states, and uses mortgage point-of-sale automation to gain impressive overall cost savings. NCB Product Administrator Rachel Green said that after adopting a smart, online application solution, the bank’s origination costs declined 57 percent for applications submitted through its mortgage Web site.

****NCB has also seen a 38 percent drop in origination costs for mortgage applications taken by its loan officers, who are also equipped with automated tools designed specifically for them.

****Key business considerations

****As I normally do, I leave you with questions to consider:

****>> How thorough is your organization’s due diligence? Survey findings indicate that the majority of banks and credit unions are currently evaluating or planning to evaluate smart, online mortgage-application technology solutions? To ensure proper due diligence and maintain a balanced business perspective, how many lenders have you spoken with that have successfully implemented a smart, online lending solution?

****>> At what stage are you in evaluating smart, online lending technology? From coast to coast, in urban, suburban, and rural communities, mortgage shoppers now prefer the Internet channel—which means that lenders must maintain a rich online presence to remain competitive. How far along is your organization in evaluating, selecting, and implementing a smart, online mortgage-application solution?