Ellie Mae^® has launched a new major release of their Encompass digital lending platform. The latest release is designed to help lenders of all sizes originate more loans across a wider variety of loan types, capitalize on the growing HELOC demand, sell and deliver loans more efficiently, provide a better loan officer experience and leverage the power of data to make better decisions faster.

“With this new release we’re providing lenders with enhanced support to capitalize on the growing HELOC opportunity, an expanding ecosystem of Investor Connect integrations and Loan Officer Connect updates to help lenders close loans faster while offering a best-in-class borrower experience.”

“Ellie Mae is offering a true digital mortgage solution to help our customers succeed in today’s competitive marketplace,” said Jonathan Corr, president and CEO of Ellie Mae. “With this new release we’re providing lenders with enhanced support to capitalize on the growing HELOC opportunity, an expanding ecosystem of Investor Connect integrations and Loan Officer Connect updates to help lenders close loans faster while offering a best-in-class borrower experience.”

Key changes for the Encompass Digital Lending Platform 19.2 release include:

Temporary buydown and enhanced HELOC support: The new major release helps home builders with mortgage operations originate more loans. This release offers the ability to filter change of circumstance reasons, making it easier for the lender to re-disclose to the borrower. Additionally, lenders who originate HELOCs will have enhanced payment options to provide the most accurate DTI evaluation for underwriting and sets expectations with the borrower for the initial estimated payment on their HELOC.

Expanded Investor delivery services: Lenders can significantly reduce the amount of time it takes to manually prepare loan packages with the ability to deliver secure data and documents through Encompass Investor Connect™ with a simple click of a button. Ellie Mae has established partnerships with correspondent investors AmeriHome, Flagstar Bank, Franklin American Mortgage, Mr. Cooper, NewRez (formerly New Penn Financial), TMS and Wells Fargo, as well as other top ten banks, with more partnerships to be announced in the coming quarters.

Encompass Consumer Connect Single Sign-On (SSO): Encompass Consumer Connect™ now supports Okta, Salesforce and Microsoft® Azure for SSO. This provides the ability to easily manage and secure authentication while streamlining borrower login and access between a lender’s corporate site, loan application and borrower portal.

Loan officer workflow enhancements: Lenders can close more loans and provide a better borrower experience with the 19.2 enhancements to Encompass Loan Officer Connect™. With service management capabilities, administrators can now configure each service and control to begin to automate the ordering of a service, such as credit, once a milestone has been met. This is the first phase towards the vision for a fully automated service ordering experience within Encompass Loan Officer Connect that will be delivered throughout 2019.

With new Cash-To-Close and Affordability tools in Loan Officer Connect, loan officers can provide prospective borrowers with multiple loan scenarios that they are eligible to apply for within their financial means. Loan officers will also benefit from the new at-a-glance eligibility view across all of their opportunities, with one-click ability to send eligibility letters to borrowers – all from their mobile device.

New loan audit capabilities: In addition to being the mortgage industry’s only solution that helps lenders make smarter decisions faster by providing access to all Encompass loan data fields in near real-time, with no negative impact on their production systems, Encompass Data Connect™ now helps lenders significantly improve loan quality and reduce buyback risks with the ability to track changes to loan files. The new loan audit capabilities give lenders full visibility into all changes for every loan in a single system of record, for comprehensive loan auditing, reporting and risk mitigation.

By Chelsea Mize, Maxwell.

The fallout from the Great Recession has had a lasting impact on the mortgage industry. The boomerang effect of the subprime mortgage crisis has seen lenders passing over less-than-perfect borrowers in favor of safe, easy, full-doc W2 borrowers with a 720 FICO score and plenty of assets.

But with increasing home values, rising rates, growing originator costs, low inventory, and booming competition, lenders are faced with a choice: expand your borrower criteria or take the hit to your bottom line.

Lenders who only work with ideal borrowers likely feel like there’s a lack of clients to be had, but there’s not. There is a massive gap of would-be borrowers who could be buying today but haven’t, either because they don’t believe they’re qualified or because they spoke with a lender who turned them down because their circumstances were too nuanced or specific to deal with.

In the U.S., 23% of consumers have a FICO score between 600 and 699, and another 6% have a score between 580 and 599. That means that roughly one in three Americans may be under the (often incorrect) assumption that they cannot qualify for a mortgage.

There is ample opportunity out there for lenders who are willing to carve out a niche in the market to cater to borrowers in under-served categories and communities that have been passed over by banks and credit unions who can’t be bothered.

And let’s be clear here: expanding your borrower criteria is not an endorsement to fall back into the risky or lazy lending practices that got us where we are today. Rather, it’s a call-to-arms to find a new mortgage niche and embrace borrowers that don’t fit neatly into the “low-risk, low-effort” box.

Find Your New Niche

Our world has changed rapidly since the crash, and how people earn a living has changed, too. The proliferation of technology and the rise of the ‘gig’ economy has empowered consumers to forge their own path. New technology players have disrupted the status quo in nearly every industry, irrevocably altering how we shop, eat, travel, work, play, relax, and buy a home.

Rocket Mortgage is already here, and now Zillow has entered the lending space. Disruption surrounds us, and finding a mortgage niche to specialize in can make you more valuable and provide a safety net as the market shifts.

As Shirleen Von Hoffmann, principal at Home Builders Edge, notes:

“Having a niche will give you value. Having value will attract potential homebuyers who will choose you rather than an online source for their mortgage needs. Cultivating a niche to attract business has been a strategy since the beginning of time in sales, but it’s more important now than ever.”

If you’re only going after cookie-cutter borrowers, you’re likely a small fish in a big pond with little room to differentiate yourself from the plethora of competitors in the market. But take the time to specialize in a niche segment of the market and suddenly you’re the big fish in a small pond, with little competition and built-in referral sources from the outset.

14 Niche Lending Specializations to Consider:

1.) Quick-Turn Specialists

Quick-turn specialists promise an incredibly quick turnaround and fine-tuned their process management to ensure max efficiency and accuracy.

2.) Down-payment Specialists

Down-payment specialists focus on down-payment assistance programs, bond loans, and financial-aid programs in their area.

3.) Credit-Fix Specialists

Credit-fix specialists work with loan files involving credit-history challenges. This is a specialty that will help get you in good with builders and real estate agents. Because these deals are tougher and require more work on your end, if you can establish trust with builders and agents and assert your expertise in this niche, they will keep sending new business your way.

4.) File Specialists

A file specialist knows how to put a pristine file together that will get loan approval. File specialists know how to put files together in a way that anticipates underwriting questions, and their attention-to-detail expedites the loan through process and underwriting to quickly get to the closing table without any hiccups.

5.) Construction Loan Specialists

As low inventory continues to be an issue in the industry, construction loan specialists are in particularly high demand. In many towns, you’ll only be able to find one or two originators who really know the ins-and-outs of custom construction financing. As a result, it’s easy to become the go-to originator for custom home builders and buyers if you can establish a reputation as an expert in this niche.

6.) Reverse Mortgage Specialist

Reverse mortgage specialists are experts at helping borrowers who want to use equity from their homes to create monthly income. Because these loans are so complicated, buyers search specifically for originators who make reverse mortgage loans their bread and butter, and reverse mortgage specialists frequently get referrals from other originators because they don’t have the time or the desire to learn the nuances of reverse loans.

7.) First-time Homebuyer Specialists

First-time home buyers look to originators and real estate agents for guidance on the stressful journey to homeownership. First-time homebuyer specialists are great at educating first-time buyers. They know the nuances of loan programs for first-time buyers and are willing to work with builders and real estate agents. This specialization can be very gratifying. Putting someone in a home for the first time is a big deal, and a great first experience with a lender is bound to bring borrowers back when they’re ready to refinance or buy a new home.

8.) Relocation Specialists

Relocation specialist often work directly with HR departments at larger companies to obtain leads for employees who need to relocate. Many relocation specialists work nation-wide to provide services to employees that have been transferred by their employers. This specialization often opens up a referral avenue that brings new refinance and purchase-mortgage business your way from other company employees who aren’t relocating but need a lender.

9.) Real Estate Agent Specialists

A real estate agent specialist knows what an agent wants and knows how to deliver on their promises. These specialists are active in the community, great at providing borrower education resources and quick turn-around times, know the ins-and-outs of Realtor purchase contracts, and are knowledgeable about the pitfalls related to financing a resale home. As a result, they stay busy with agent referrals and frequently work with agents at open houses to present a unified front with borrowers from the outset.

10.) Home Loan Broker

Home loan brokers have access to many different lenders and therefore have access to the best rates and programs available. They are able to switch up their business as needed around the service levels provides. This niche can be particularly attractive to those who are locked in with one lender, one service provider, and one option for providing financing.

11.) Homebuilder Specialists

You know the builders’ business. You understand construction processes, terminology, and priorities. You understand their timelines, how they communicate, and what they need to take great care of their clients. In return, you’re always busy with referrals from the builders.

12.) Union Specialist

Union specialists are involved in unions and attend union meetings and events, eventually becoming a part of the community. These specialists help educate union members about their options. They advertise in union magazines and websites, and end up becoming the recipient of most union referrals in their industry.

13.) FHA Specialist

Federal Housing Administration (FHA) specialists do well financially because there are so many FHA loans out there. Specializing in FHA loans can help you increase your margins dramatically because it’s such a highly utilized loan product, but there are nuances to FHA loans that many originators don’t understand. If you specialize in all aspects of FHA lending, you will be busy with referral busy from builders, agents, and other originators alike.

14.) VA Specialist

Veteran Affairs (VA) specialists understand the many nuances of VA loan programs and attend veteran events and fairs to market to veterans and educate them about VA loans.

The Rocket Mortgages of the world will never be able to fully dominate in a specialty market; complex borrowers require complex loans, and the originators who take the time to master the nuances of a niche mortgage market will protect themselves from becoming redundant as technology players bent on eliminating the human element of the lending experience dominate the conventional loan space.

About Maxwell: Maxwell is a company that offers digital collaboration, data integrity, and process automation for the mortgage industry.

In a recent conversation with a veteran mortgage banking trainer, he commented that invariably in every class, there are adopters of the new selling techniques and those who plainly reject what is being taught. In my consulting practice I've seen this time and again. I find that top originators are more than willing to learn new selling techniques because they are continually looking for ways to improve their sales models. On the other hand, "resisters" are easy to spot because they fight tooth and nail to even attend training sessions. Most of the time, they don't even show up.

[caption id="attachment_9789" align="alignright" width="300"] Pat Sherlock[/caption]

The most interesting group in my view that the trainer did not mention are what I call the "training fakers" because they are enthusiastic in class, but never implement any of the training. They are a more pleasant type of resister. Certainly, they can come up with a myriad of excuses of why they haven't taken action. These originators typically produce two or three units a month. They might have been successful in the past but aren't now. For an instructor and their manager, this is the most frustrating group to work with because these originators may have sales talent but are not willing to go outside of their comfort zone.

Training fakers tend to be experienced originators who are happy with their income and have made the decision to not learn anything new. They view learning new selling techniques as something that they don't want to bother with because they feel they are successful which can be a false assumption considering their current production. They often claim blame the company for their lack of production. A sure sign of a training faker is someone who says at the start of a class, "you don't understand, my market is different, or my company's pricing is bad." These individuals will attend the training because the company or manager mandates that they do so but they do not apply anything that is being taught.

[adbutler zone_id="325884" type="asyncjs1.1" ]

[adbutler zone_id="325888" type="asyncjs1.1" ]

Learning at its heart is all about trying something new and adjusting the new practices to an originator's selling situation. With fakers, their unwillingness to learn something new can be hidden but according to psychologists, the core issue is fear of failure. Failing can be embarrassing and frustrating. It requires a level of self-confidence that these producers don't have at this point in their career. For these individuals, training that provides great information isn't enough to change their sales performance. A better approach is to recognize that low performers with sales talent have different training needs than other producers. Training must be personalized and address the specific issue that is holding them back. Once the underlying issue is corrected, they can change their sales performance.

All of this means that managers should look more closely at their originators and identify which producers will adopt and implement sales training and which originators will require a more customized track.

Some managers believe that an originator's sales improvement is up to the sales professional. They view the company's job as providing operational function not skill set improvement. Many rationalize this by saying, "well it's a commission job and the originators are responsible for their own performance." Others think that they will provide the technology that will compensate for the originator's selling failures. And still others bring in motivational speakers hoping that will fix sales performance problems. None of these efforts will move the sales needle for fakers who need a more individualized training approach to succeed.

Training like so much else in business today is changing dramatically. For best results, training should be customized to meet individual originator's needs. One-size-fits-all training misses the mark and ends up being a poor investment that does not change sales results.

The reality is that training for top performers should be different than what training fakers receive. The resisters are individuals who clearly should be moved out since they are outright refusing any improvement efforts. The fakers need help in the form of a more customized approach that addresses their fear issue first and then moves to new learning to help them sell more effectively.

A new ValuePenguin.com study has found that while flood insurance in states like Texas and Florida cost $581 and $550 a year on average, flood insurance in Rhode Island and New York cost $1389 and $1155 respectively. Additionally, just 7 percent of American homeowners have a flood insurance policy, compared to the 91 percent of owner-occupied homes who have homeowners insurance.

With the 2019 Atlantic hurricane season less than a month away, the need for flood insurance has never been more urgent. Nearly three-fourths of U.S. adults think destructive weather events such as hurricanes are getting worse, and over 40 percent of Americans have encountered weather events that caused property damage or forced them to evacuate their homes. Yet flood insurance coverage ratios vary widely by state.

Key Findings:

• The states with the highest percentage of homeowners with flood insurance are Louisiana (44 percent), Florida (36 percent), Hawaii (23 percent), South Carolina (16 percent) and New Jersey (11 percent).
• The states with the lowest rate of coverage are Minnesota (0.6 percent), Utah (0.6 percent), Michigan (0.8 percent), Wisconsin (0.8 percent) and Ohio (1.1 percent).
• The average cost of a flood insurance policy through the National Flood Insurance Program (NFIP) is $699 per year, but flood insurance premiums vary significantly across the country.

[adbutler zone_id="325884" type="asyncjs1.1" ]

[adbutler zone_id="325888" type="asyncjs1.1" ]

• The five most expensive states to purchase flood insurance are Connecticut, Rhode Island, Vermont, Massachusettsand Pennsylvania, where premiums are 69-100 percent above the national average. On the flip side, NFIP policies in Texas, Maryland and Florida are the cheapest in the nation, and cost 17-21 percent below the national average.

ValuePenguin calculated share of homeowners with a flood insurance policy by comparing NFIP policies in force (source: FEMA) to owner-occupied housing units (source: U.S. Census Bureau). Their analysis does not include private flood insurance policies, which make up a minimal share of the overall flood insurance market.