Ex-Fannie CEO, Mayopoulos, Joins Blend as President

Blend has hired Tim Mayopoulos, former CEO of Fannie Mae, as president of the company.

Mayopoulos will lead Blend's go to market and corporate support functions, take a seat on the board and report to Nima Ghamsari, CEO of Blend.

"I've collaborated closely with Tim for over four years, and he believes strongly in technology's potential to bring simplicity, transparency and accessibility to the broader consumer-finance ecosystem,” said Ghamsari. “His deep expertise and passion for transforming consumer lending make him a great fit for our team."

[caption id="attachment_9264" align="alignright" width="272"] Tim Mayopoulos[/caption]

"I'm thrilled to join Blend at a critical point in its growth trajectory and look forward to helping the company continue to drive positive change in consumer finance in the years to come," said Mayopoulos. "Nima and the Blend team are driving much-needed improvements to the speed, efficiency and transparency of consumer lending. I am confident that the company's growth will continue at a remarkable rate."

In addition to Mayopoulos, Blend has expanded its leadership team with the following recent executive hires:

Olivia Teich has joined as head of product. In this role, Teich will engage with consumers and the industry to identify the areas where Blend's product can make the biggest impact to improve lending. Prior to Blend, Teich held roles leading product at both Dropbox and Jive.

Kallol Das has joined as head of engineering. He will focus on expanding Blend's engineering team, driving quality and efficiency, and partnering with the product team to achieve development goals. Das has held similar executive roles at Path, Salesforce, Amazon, and Invoice2Go.

Justin Schuster has joined as head of marketing. Schuster brings a strong background in SaaS, product, marketing communications, and digital marketing, having served as Corporate CMO at Acxiom and VP of marketing at LiveRamp.

"We've added some amazing leaders to our team, positioning the company to scale at an even faster rate and better serve our customers, driving meaningful change in our industry," Ghamsari said. "This group brings a wealth of experience and skill to Blend's executive team, and their contributions will be pivotal to achieving our goal of a simpler, more transparent financial services ecosystem."

The appointments follow a record year of growth for Blend's digital lending platform, which processed more than $230 billion in loan applications in 2018. Now 350 employees, up from just over 200 a year ago, Blend now works with more than 130 customers that comprise more than a quarter of the U.S. mortgage market.


Key Bank Acquisition Provides Access to Wealthy Consumers

Key Bank National Association acquired Laurel Road, the digital lending arm of Laurel Road Bank, because of its wealthy, well-educated client base.

Although well established in the student loan market, Laurel has expanded into the mortgage business, personal and secured loans over the past year, so it could develop relationships and cross-sell financial products to consumers.

The demographics of its consumers include: Around 70% of the clients are doctors and dentists with another 20% being lawyers and MBAs. And the overall demographics of this target client base is extremely attractive, an average age of 33, average FICOs of 760, and income of around $185,000. Laurel Road originated about $1.2 billion in loans in 2018.

“I would say that the credit quality and the nature of those loans, and more importantly the nature of those relationships, we think are consistent with our targeted customer base and we’re very excited about that,” said Don Kimble, CFO of Key, during the company’s quarterly call held earlier this week. “And so, it really is more of a relationship strategy for us.”

The Laurel Road acquisition will be about $0.02 dilutive, or add more than $50 million of expenses. In addition, Key is converting from a loan sale model to a retain model.

"However, it will continue the gain on sale model and “where we see a good quality relationship, we’ll probably retain it," said Kimble. "But one of the things we talk about is (Laurel Road’s) ability to originate mortgage loans. And if it's a conforming mortgage loan that we will probably sell that in the secondary market, like we do with our existing portfolio.”


PNC Earns $5.3B in 2018

PNC Financial Services Group Inc. reported earnings of $5.3 billion in 2018, and earnings per share of $10.71. In the fourth quarter, the bank earned net income of $1.4 billion and $2.75 earnings per share.

[caption id="attachment_9139" align="alignleft" width="211"] Bill Demchak[/caption]

"2018 was a successful year for PNC. Earnings per share increased, and our returns on average assets and common equity were strong,” said Bill Demchak, chairman, president and chief executive officer at PNC. “Record revenue was driven by higher net interest income and noninterest income, and we generated positive operating leverage for the year. We grew loans … [as well as the] successful launch of our national retail digital strategy.” Driven by its digital strategy, the bank increased its marketing budget by $13 million, compared with the third quarter of 2018.

Residential mortgage origination volume was $1.6 billion for the fourth quarter of 2018, compared with $2.1 billion for the third quarter, and $2.4 billion for the fourth quarter of 2017. Around 67 percent of fourth quarter of 2018 residential volume was for purchase transactions, compared with 72 percent in the third quarter, and 50 percent the fourth quarter of 2017.

The third-party residential mortgage servicing portfolio was $125 billion in the fourth quarter, compared with $127 billion in both the third quarter and in the fourth quarter of 2017. Residential mortgage loan-servicing acquisitions were $2 billion in the fourth quarter of 2018, compared with $6 billion for the third quarter and $1 billion for the fourth quarter of 2017.

Residential mortgage revenue decreased $17 million, reflecting a $19 million negative adjustment for residential mortgage servicing rights valuation, which was driven by a decline in long-term interest rates in the fourth quarter.

Nonperforming assets in the fourth quarter decreased $17 million, compared with the third quarter of 2018, because of lower real-estate owned and foreclosed assets. Nonperforming loans were stable reflecting a reduced number of nonperforming home equity and residential mortgage loans, which were offset by higher nonperforming commercial loans.

Average loan balances increased 1 percent, compared with the third quarter and 2 percent compared with the fourth quarter of 2017 due to growth in residential mortgage, auto, credit card and unsecured installment loans partially offset by lower home equity and education loans.

Average commercial lending balances increased $2.3 billion, reflecting seasonal and loan growth in PNC's multifamily agency warehouse lending. Average consumer lending balances increased $0.3 billion, to 73.7 billion, due to growth in residential mortgage, credit card, auto and unsecured installment loans partially offset by lower home equity and education loans.


Automated Appraisal Platform Secures $3M in Seed Funding

Reggora, an appraisal platform for appraisers and lenders, has secured $3 million in seed funding to help it expand across the U.S. and enhance its platform. The funding round was led by Spark Capital with participation from Boston Seed Capital, an early investor in the company.

[caption id="attachment_9077" align="alignright" width="300"] Denslow: Software provides lenders with more control than they've had up to now.[/caption]

"The primary reasons for delays during appraisals today revolve around basic manual processes such as finding the most qualified and available appraisers, scheduling inspections and following up to check on an order status," said Will Denslow, Reggora's co-founder and CTO. "Our software automates all of these elements and much more, providing the lender with greater control and transparency and allowing the appraiser to spend more time focusing on the critical part of the process: the appraisal itself."

Reggora brings greater efficiency to the home-appraisal process, allowing appraisals to be completed up to 40% faster for borrowers and mortgage lenders like banks or credit unions.

Regulations over the past 10 years have added complexity to the appraisal process—such as appraiser independence. Reggora's platform facilitates compliance with these regulations while reducing redundancies and manual processes and replace it with a platform that provides automated tools to complete appraisals.

"As technology continues to improve in the financial services sector, everything is becoming on-demand and easier for the borrower," said Brian Zitin, co-founder and CEO of Reggora. "However, getting a mortgage loan is still a slow process and getting an appraisal is a main contributor to that. Reggora aims to streamline things for everyone involved by bringing modern technology to the process." Alex Finkelstein, general partner at Spark Capital, will join Reggora's board.




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