[caption id="attachment_8871" align="alignright" width="333"] Detwiler: There could be more consolidation among AMCs that haven't begun developing technology.[/caption]

The Mortgage Leader spoke with Michael Detwiler, equity partner and CEO of Class Valuation, about the  decision to invest in appraisal technology, the firm’s recent acquisition of Landmark Network, an appraisal management company--and why he predicts more consolidation will occur among appraisal management companies.

Prior to joining Class last month, Detwiler was the head of Accenture Software including the North American mortgage software and outsourcing business He was the co-founder of Mortgage Cadence, a loan origination software company that Accenture acquired.

Q: The Landmark Network is a provider of valuations, with expertise in reverse mortgages. Why do you find that product of interest?

 Reverse mortgages have always been on my mind. Back in 2000, when I was developing a loan-origination system at Mortgage Cadence, I made sure it could support reverse mortgages. Reverse mortgages are personal to me: My grandmother almost lost her house because at the time--there weren’t reverse mortgages like there are today.

There are many borrowers that could use the product for the good of themselves and their lifestyles; I want to support them and develop technology that will make the experience better for them then it has been up to now. There still is a fear with reverse mortgages among consumers, but the product has moved more into the mainstream than it was in the past.

Q: What technology innovations do you plan to unveil?

Class is investing millions of dollars on developing technology to support appraisers and work with investors, government sponsored enterprises and lenders. For instance, during the refi boom, borrowers might have had to wait for the completion of their appraisals. We can make it easier and faster to gain access to the house through a smart lock box. But I’m not going to give away all of our plans.

Q: Why make a bet on technology for the AMC market now?

Investors are keen on appraisers having a prominent role in the market. Our clients are not interested in taking risks without understanding what the risk is. The feedback received from having boots on the ground, gives them a level of confidence because the valuations are objective and collected by impartial third-parties.

Others chose to side step that approach. There was an initiative in which non-appraisers collected data and generated results. The idea is that they are analogous to an appraiser—but the results are not of the same quality or veracity. Technology plus an appraisal partnership is the direction of the market. Ultimately, the market is more interested in block chain for mortgages than in a model without that technology.

Q: Do you think there will be more consolidation among AMCs, due to technology?

Yes, but the consolidation that will occur won’t be solely because of technology. Lenders will choose to work with the AMCs with the strongest financials, leaving the remaining firms to merge or go out of business. But technology will play a role in acquisitions.

AMCs are being forced to evolve their technology, how they use data, and their use of artificial intelligence. That includes scoring models and quality metrics that enable the lender to see the assignment went to the right panel--based on the performance in states, counties and zip codes.

Organizations will require algorithms that look at historical performance, specialization, quality, proximity and more. As more data comes in, the model gets more accurate. That’s a cost of admission today. Those AMCs that haven’t started to develop the technology—it’s too late for them to begin now, which could lead to acquisitions.

 Q: Is the digital mortgage real or just marketing sizzle?

The digital mortgage is real, but the industry has to make a concerted effort to get there and overcome the inertia in the marketplace. Borrowers would like the digital mortgage, but most, around 70 percent, want real or digital hand holding. Borrowers, for instance, are being asked for documents that they can’t provide readily, and they want to have access to someone with whom they can speak.

John Bianchi, a 30-year veteran of the mortgage business, has been named executive vice president for national sales at loanDepot. He will work with the executive team to cultivate and enhance market presence, develop differentiated products and services and create market penetration strategies designed to fuel individual producer as well as channel and company growth.

In addition to his management acumen, Bianchi is also a top-personal performer, having formerly been recognized as one of the top five mortgage originators in the country. “Coming from a background of personal production like I do, means that I know how important the right products, the right technology and the right operational processes are to loan officers and customers alike,” said Bianchi.

[caption id="attachment_8862" align="alignright" width="222"] Bianchi brings a track record as a sales executive and top originator.[/caption]

Prior to joining loanDepot, Bianchi served as executive vice president of national retail lending for Caliber Home Loans, and he has held sales leadership positions with Bank of America and Countrywide Home Loans.

"Our commitment to professional loan officers and the retail channel has never wavered," said Anthony Hsieh, founder and chief executive officer of loanDepot. "We believe in distributed retail, and we want to grow this segment of our business. John's hire reconfirms this commitment and positions us to further invest in the tools, products and technology that today's retail loan officer needs to win.”

Bianchi will report to Dan Hanson, chief production officer, and will work with executive leaders and teams across companies, channels and verticals to cultivate and enhance market presence, develop differentiated products and services and create market penetration strategies designed for growth. loanDepot's team of divisional executive managers will report to Bianchi, giving him oversight responsibility for more than 1,000 employees and 100,000 customers.

“I know how committed loanDepot is to retail and how committed it is to increasing volume and velocity, which means the company is very well positioned to take advantage of the changes that are occurring in our industry and in consumer behavior, said Bianchi.

The unemployment rate increased to 3.9 percent in December, from 3.7 percent in the previous month. The number of unemployed persons increased by 276,000 compared with the previous month to 6.3 million. A year earlier, the jobless rate was 4.1 percent, and the number of unemployed persons was 6.6 million, according to the Bureau of Labor Statistics. Nonbank mortgage companies employed 337,000 workers in November, a decrease of 5,000 jobs compared with October and 338,800 a year earlier.

December's numbers aside, 2018 was an outstanding year for employment, especially considering the length of the economic recovery the U.S. has experienced.

“The labor market ended the year on a stellar note, which should help soothe fears of a marked slowdown in the economy, said Doug Duncan, chief economist at Fannie Mae. “Robust December hiring plus upward revisions in the prior two months pushed the three-month average job gain to the strongest pace since September 2016, not too shabby for an expansion that is long in the tooth. While the focus may be on the impressive strength of job gains and the tick-up in annual wage growth to tie an expansion high, we believe the best news in today’s report is the rise in the labor force participation rate to the highest level in more than a year, which should please the [Federal Reserve].”

Given recent tightening of financial market conditions, including stock market volatility and widening credit spreads, amid well-anchored inflation around the Fed’s target, the positive jobs report gives the Fed more room to stick with the two rate hikes projected for this year in the, which remains Fannie’s expectation.

For housing, the jobs report signaled continued divergence of key demand and supply fundamentals. Whereas overall hiring and wage growth remain solid, the number of jobs in residential construction barely budged over the month, suggesting that the prolonged housing supply crunch will continue into the new year.