Hello, LOs!
ICE's recent acquisition of rival Black Knight in a $13.1 billion mega-deal is the latest example of consolidation in the mortgage industry as the market shifts. If approved by regulators, it's an incredible opportunity for ICE, and would create a powerhouse for data, analytics and software solutions.
The downsizing of the mortgage market affects mortgage tech companies as well as lenders, and we are already seeing some of the strategies they're using. Blend reported earnings yesterday and the tech company lost $73.5 million in the first quarter, but pointed to the performance of its mortgage banking and title sectors as a positive sign for the rest of the year. Last month Blend laid off 200 workers – 10% of its total workforce – but executives think it can still outperform the origination volume of its competitors in the mortgage industry.
While larger companies like Blend or Black Knight may continue with investments they had planned, it's going to be a period of "spend nothing until we know how deep the water is," said a consultant for mortgage tech companies.
"There's been a lot of new technology rolled out in the past two years, but the level of adoption is still pretty low around the industry. The market really needs to absorb what's already been built in terms of new technology," the consultant added.
Some loan officers I talked to pointed to "technology that brought value to customers on our behalf." Examples include Homebot, a marketing platform that uses automated valuation model technology to show customers what their homes are worth, and Simple Nexus, an application platform to which customers can upload mortgage documents to speed up the loan process.
Some vendors are gearing up for new tech projects later this year, consultants say, and the firms that have been around long enough in the cyclical market will use the down cycle to improve their cost structure and invest in new technologies.
LOs, what are some technologies you think are going to make a difference in this lower volume market? Are there any tech solutions you hope to see roll out? Please share your thoughts with me at connie@hwmedia.com.
Connie Kim
Mortgage reporter HousingWire
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