Evolving Mortgage Backed Securities

Investors are an essential part of the mortgage industry, specifically their involvement with residential and commercial mortgage backed securities. Wall Street lost around $2.5 trillion worth of mortgage backed securities in 2008 with the mortgage crisis, and although the housing market has since bounced back, investors just don’t have a secure place to put their money. So how do we bring Wall Street back into the mortgage industry and create a solid foundation for reestablished mortgage backed securities?

In this episode of Mark’s Minutes, Mark reveals Pavaso’s vision for the evolution of mortgage backed securities, and how Pavaso’s mortgage scoring system fits into this future of mortgage investing. He also explains the various ways the industry can bring private money back into the mortgage industry by reinventing the mortgage backed securities model.

Fixing the TRID Challenges That the Industry Got Wrong

Long before TRID’s implementation in October, analysts and professionals were forecasting the various effects its changes could have on the industry and each stakeholder in the transaction. Of course we can evaluate the clear changes of the new Loan Estimate and Closing Disclosure forms, but is that all that TRID encompasses? What other changes are in store for businesses?

In a white paper released in early Q3, we broke down the challenges everyone was soon to face, and the new Loan Estimate and Closing Disclosure forms only accounted for about 20% of them. Naturally, the industry chose to focus on meeting the tangible requirements of the LE and CD first. We knew that the new forms were going to be a major focus, but because we looked at TRID with a different perspective, we understood that was only a small part of what the CFPB is trying to accomplish. There was much more that had to change. Although businesses have had a few months to incorporate new systems, tools and training for the LE and CD, the industry is still in chaos figuring out what else they have to do to be compliant. So the question then becomes, how do I establish and show this ‘good faith effort’? That’s where the other 80% of TRID comes in. This includes improving the entire transaction by incorporating consumer participation and education, collaborating with title companies for the closing, and partnering with real estate agents.

To build a proper platform for consumer participation, we first need to reevaluate the way the Loan Estimate and Closing Disclosure forms were implemented. The first LE is never going to be correct, it’s an estimate. So don’t over focus on extreme details when the estimate will change after title evaluates the deal anyways. And for the CD, that’s right in the ballpark of what title did with the HUD. Let title take the lead on completing that, and you can approve everything before it’s sent out. With the LE and CD issues resolved, how do we refocus the industry to involve the consumer more and collaborate with all the other stakeholders? Lenders, don’t hesitate to talk to the title companies. For efficiency and accuracy with the LE and CD, constant communication with them is required. To give consumers the experience they deserve, involve them and their real estate agents throughout the transaction, and allow them to participate by providing education throughout the process. By partnering with title and real estate agents, you can consolidate communication to one place while presenting a united confusion-free front to the consumer.

With the entire transaction process an issue, instead of spending your time and resources on systems that offer small spot solutions, focus on evolving your organization to fit the requirements of the new post-TRID world. Not even technology can fix the archaic business model of home buying today. The first to meet these needs will succeed, and those who don’t will surely be passed by.

We dive into more detail on how to address these challenges and get set on a clearer path to overcoming them in a recent white paper that is available for download here.

The white paper addressing pre-TRID predictions from September is also available for download here.

Limited Power of Attorney Approach

With consumers busier than ever and the need to keep up with everyday hectic life, home closings using limited power of attorney can be a useful capability for some consumers. The overall benefit to limited power of attorney is to no longer require the consumer to be present at the closing to sign documents. However, with technology making it easier to close on a home than ever before, this capability may not hold as much value as it once did.

In this episode of Mark’s Minutes, Mark describes how technology is evolving to meet the consumer and specifically how that is changing the need for limited power of attorney in the home buying process. He also explains why, although Pavaso contains the ability, he thinks it is a huge concern for businesses to require limited power of attorney capabilities from technology platforms.

Long Term Consumer Marketing

As a real estate agent, lender or title company, it’s not often you’ll find return customers, due to the nature of real estate. By the time consumers are ready to refinance or buy a house again, most don’t remember who they worked with on their first transaction, and if they do, they don’t have an easy way to reconnect with your business. This may be due to the fact that most post-closing marketing today involves distributed refrigerator magnets and branded pens that are sure to be lost or thrown away. So how can you stay connected with consumers after the transaction, and improve your marketing so consumers remember their business with you?

In this episode of Mark’s Minutes, Mark explains how Pavaso connects real estate agents, lenders and title companies to consumers for the entire homeownership lifecycle. He also explains how Pavaso adds value over time for you and your customers with built-in automated marketing that makes it easy for you to stay connected with consumers and allow them to reconnect with you.

Closing Insight Regarding Millennials

Millennial: a person reaching young adulthood around the year 2000. Millennials have been a topic of conversation in the real estate industry for the last year or so, as they reach the homeownership stage of life. Millennials are very particular in their sentiments and what they expect from business transactions today, and it’s no secret that the real estate industry is having trouble attracting Millennials and walking them through the home buying transaction in general. Much of this has to do with the processes involved with buying a home, and the experiences resulting from them. It can be put simply that millennials want more information, more access and most importantly, they want it all at their fingertips.

In this episode of Mark’s Minutes, Mark explains why Millennials are so different than any other generation, and why the real estate industry is having trouble connecting with them. He discusses the way Millennials were raised, and what impact that has on their value in relationships and business dealings. Most importantly, Mark will explain how to use the technology we have today to evolve the process of buying a home to attract Millennials and every generation after.

How Did Pavaso Get Here?

We all have experiences in our lives whether they be work-related, personal or even spiritual that shape our personalities, ideas and futures. And all great companies have to start somewhere, whether it’s someone’s simple idea with a staff of one or a larger organization’s endeavor with the backing of millions. Either way, it takes years of focus, hard work and determination to effectively develop an up and running company. Pavaso CEO, Mark McElroy, has many experiences that are no different than these.

In this episode of Mark’s Minutes, Mark discusses his background in the technology, title and mortgage industries, and his experiences with building from the ground up. He goes on to explain how these distinctive experiences led to the inception of Pavaso’s platform and the core values that make Pavaso different from any other platform.