Game Change

TheMReport — News and strategies for the evolving mortgage marketplace.

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take 5 Minding the Mortgage Marketplace Jonathon Corr's extensive background in mortgage banking has given hm a fair amount of insight on the current changes occurring in the industry. As president and COO of Ellie Mae, he is tasked with ensuring the company remains compliant in this hyper-regulated sector. Corr recently spent some time with MReport to discuss current issues in origination. M // What nationwide trends— both constructive and adverse— are you observing throughout the mortgage banking industry? Corr // Things seem to be "settling down." Home prices are appreciating again in most markets, yet they're still affordable. Interest rates are still relatively low. Credit and underwriting standards appear to be gradually expanding. New regulations are coming into focus, and the industry is investing in talent and technology to comply with them. These are all positive trends, in our opinion. In the adverse category, I'd put changing from a refinance to a more normal purchase market; interest rates continuing to rise; the details that need to be worked out in key regulations, such as QM and loan officer compensation; and the possibility that some parts of these regulations, like ability to repay, may conflict with other rules, like fair lending. 6 | The M Report "The downturn in the economy exposed all the faults and greed of companies trying to maximize profits by ignoring loan quality." M // Among the wide array of new policies and regulatory changes, what critical initiatives have had the greatest impact on Ellie Mae's business? Corr // Ironically, the wave of new regulations at both the federal and state levels have only served to reinforce the value proposition of our software and services. Originators realize that they need to automate compliance in order to stay in business. And they are looking for partners, like Ellie Mae, who are willing and able to invest in compliance experts and in technology that can keep abreast with all the rules and changes—a strong incentive for lenders to move to Software-as-a-Service (SaaS), so that all of the updating that needs to be done is done automatically. M // What innovations and adaptations are emerging within the company to address key issues in housing finance? Corr // Our industry is rapidly moving from licensing to SaaS for both compliance and economic reasons. At Ellie Mae, we have been investing heavily in the technology and infrastructure needed to support this—$18 million last year and an expected $22 million this year. We're also creating new programs, like our Total Quality Loan Program, to improve quality and take time and cost out of correspondent loan purchases. Similarly, we are adding new features to our Encompass360 platform, like our Loan Officer Compensation Management, to help lenders comply with coming rule changes. M // In an unpredictable lending and investing environment, what leadership initiatives are in place to ensure that Ellie Mae remains future-focused? Corr // Ellie Mae has, since our beginning, had a single focus: to automate the entire mortgage process. That is still the case today. We are continuing to invest in expertise and technology to be ready for whatever the mortgage industry looks like in the future. At the same time, we believe our strategy, the changing mix of our revenues, as a result of SaaS, and our nimbleness as a company will serve us in good stead, even in a down market. M // How will your particular brand of leadership guide Ellie Mae into continued success? Corr // I'm not sure that it's my brand, or Sig's [Sigmund Anderman, Co-founder and CEO of Ellie Mae] for that matter, that counts. It's more of a team effort. Going forward, we're going to continue to focus on our clients, their satisfaction, making sure we deliver what we promise and being ready for where the market is heading. Anyone who's been around me for a while has probably heard me quote my favorite "business guru"—Wayne Gretzky— who said: "Skate to where the puck is going to be!" And that's what we're going to do.

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