Technology and Today's Mortgage Employee - IN FOCUS: Mortgage Technology - Barry Slatt Mortgage
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Q&A WITH BARRY SLATT MORTGAGE’S
DAN FRIEDEBERG
SEE PAGE 19
MORTGAGE FINANCE
Spring 2018 NEWS
Technology and Today’s
Mortgage Employee
SEE PAGE 12
IN FOCUS:
Mortgage
Technology
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1st Annual | Members-Only
Chairman's
Conference
April 8-10, 2018
The Lodge at Torrey Pines
11480 N. Torrey Pines Rd.
La Jolla, CA 92037
Featured Speakers Include:
U.S. Rep. Ed Royce
First American’s Chief Economist Mark Fleming
Major Brian Shul, USAF (Ret.)
Jen Shirkani
In This Issue…
SPRING 2018
CHAIRMAN’S CORNER………………………………………… 6
EXECUTIVE DIRECTOR’S LETTER………………………… 7
LEGISLATIVE REPORT………………………………………… 8
MEDIA & MARKETING………………………………………… 11
COVER STORY……………………………………………………… 12
ROUNDTABLE……………………………………………………… 15
WHO’S WHO………………………………………………………… 16
FEATURED RESIDENTIAL……………………………………… 18
FEATURED COMMERCIAL…………………………………… 19
LATEST COMMERCIAL DEALS……………………………… 20
RESIDENTIAL……………………………………………………… 23
California Mortgage Finance News is
published by the California MBA four COMMERCIAL……………………………………………………… 25
times each year: Spring, Summer, Fall,
and Winter. 2018 CONFERENCES & EVENTS…………………………… 26
EDITOR:
Dustin Hobbs NEW MEMBERS…………………………………………………… 27
PUBLISHER/LAYOUT:
Wolfe Design Marketing PHOTO GALLERIES……………………………………………… 41
California MBA ROAD TRIP………………………………………………………… 44
520 Capitol Mall, Suite 440
Sacramento, CA 95814
PHONE: (916) 446-7100
FAX: (916) 446-7105
EMAIL: info@cmba.com
www.CMBA.com
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CALIFORNIA MORTGAGE FINANCE NEWS 5
CHAIRMAN’S CORNER
New Year, New Challenges for
California MBA
A
by s the new begins, American business least from the new leadership at the Consumer
CHARLES W. has quite a bit to be optimistic Financial Protection Bureau (CFPB). On the
HALLADAY, about. Overall economic indicators commercial/multi-family side of the business
Chairman, from unemployment to stock market value to increasing rates will be a challenge for lenders;
California MBA wage growth seem to be trending in the right however, strong employment and economic
Senior Managing direction. Housing and real estate are more expansion should help industry weather the
Director, HFF, LP of a mixed bag right now – if you’re looking to challenges.
sell a home, ATTOM Data Solutions reports One issue that will continue to be felt in
that home seller profits are at a 10-year the residential industry this year is ongoing
high; however, buyers are facing affordability consolidation, as companies take advantage of
challenges, particularly in California (see below their market position, or simply have reached a
for more), and MBA forecasts a significant point where the cost of doing business, or the
decrease in residential originations in 2018. regulatory burdens lead them to the inevitable
Additionally, MBA (and virtually every leading conclusion that finding a partner makes the
economist) expects interest rates (and most sense for their businesses, employees,
mortgage rates) to rise this year. MBA expects and customers.
mortgage rates to edge near 5% by the end of
the year, and cross over that psychologically
important barrier mid-way through 2019.
And that’s before President Donald
Trump’s much debated and discussed tax
1st Annual | Members-Only
reform has a chance to go into effect. While Chairman's Conference
much of the dialogue surrounding the issue
focused on the decrease in the individual
tax rate, the real impact will be felt by the
drop in the corporate tax rate – from a high
of 35% to 21%. As for the results, not only
have we seen a number of large corporations
promising wage increases, bonuses and more,
April 8-10, 2018
The Lodge at Torrey Pines
but consumers will also see a big difference
11480 N. Torrey Pines Rd.
when the lower tax rate is combined with La Jolla, CA 92037
SP regulatory relief, which we’ve begun to see, at
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6 CALIFORNIA MORTGAGE FINANCE NEWS
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EXECUTIVE DIRECTOR’S LETTER
What’s New in 2018?
W
by e’re kicking off 2018 with a reason that you should not be clearing your
SUSAN MILAZZO, renewed focus on creating calendar to attend! Member companies will be
Executive Director, value for your California receiving their personal invitations via email.
California MBA MBA membership. The support from our Our next addition for 2018 is something
membership allows us, among other things, we’ve been working on for quite some time!
to maintain the strong advocacy presence The California MBA has formed a program
we have in our State Capitol, host cutting- to allow member companies to apply for
edge education conferences with speakers discounted employee medical benefits. In
recognized nationally for their industry today’s healthcare market, this expense has
expertise and a cadre of networking risen dramatically in the past several years
opportunities to keep us all connected! We and its tough for small to mid-size companies
want to enhance the list of reasons our to receive competitive quotes for employee
member companies continue to provide this medical benefits. This program allows us to
support with these two opportunities in 2018. pool our resources and compete at levels that
This Spring we will host our Inaugural have previously only been available to large
Chairman’s Conference (April 8 – 10 at The companies. We’re seeing that this program
Lodge at Torrey Pines). This is an exclusive can typically provide a 15-25% annual savings
opportunity for the members of the California for our members, while significantly improving
MBA to network at the highest levels in an the benefit plan options and features.
intimate setting! This annual event is designed This is an exciting opportunity for our
with the CEO/Company President in mind. association and our members. Our goal is
You’ll be networking with and learning from to help you manage operating expenses and
colleagues in the mortgage industry who face offer high quality employee benefits. If your
the same challenges you face! Additionally, company is interested in learning more about
only one registration (plus one guest) is this program, please contact me (susan@cmba.
permitted per company, ensuring an intimate com) and we’ll get you all the information you
atmosphere. need!
Participants will be invited to golf with Lastly, we are proud to announce that
industry colleagues at one of the most amazing we have plans underway to be a part of a
courses in the world as well as enjoy site California based fundraiser for the MBA Opens
seeing in this exquisite part of our beautiful Doors Foundation. This charity founded by
state! The focus is on building industry the national MBA uses 100% of monies raised
relationships so there will be no exhibit hall, to help families with critically ill children.
no calendar of back-to-back meetings, and no
…Executive Director’s Letter continued on page 27
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CALIFORNIA MORTGAGE FINANCE NEWS 7
LEGISLATIVE REPORT
Session Resumes with
Several Mortgage-Related Bills
Under Consideration
T
by he beginning of the second year of the on additional entitlements like expanded
PAT ZENZOLA, two-year California legislative session healthcare, childcare and poverty reduction
California MBA in January also ushers in one of the programs. In contrast, Republicans who are
Legislative Counsel, Capitol’s longest-running rituals. Early every a minority in both houses of the Legislature,
KP Public Affairs January the governor presents a proposed are already taking the position that the budget
state budget for the fiscal year that will begin surplus is proof that California taxes are too
in six months. This year’s budget proposal high.
was special in that it was Governor Brown’s A second reason cited for the Governor’s
16th and final of his gubernatorial career, cautious budget proposal is the uncertainty
spanning two eight-year terms separated California faces about the fiscal impact of the
by 28 years. His first budget for the 1975- new federal tax law. It caps mortgage interest
76 fiscal year was $11.5 billion. His current deductions to interest on mortgage debt up
budget proposal is $190.3 billion, a little more to $750,000 and imposes a $10,000 limit on
than 16 times his first. This budget proposal is federal tax deductions for state and local tax
also unique in that the governor wants to add payments. State policymakers are concerned
an additional $3.5 billion to the state’s rainy- that these changes will entice many high-
day fund, raising the fund to $13.5 billion and earning Californians to leave the state. This
for the first time totaling 10 percent of the would have a dramatically negative impact
state general-fund revenue. Brown’s primary on state revenue because state taxes heavily
reasoning for the historically high rainy day depend on income taxes paid by the wealthiest
fund is that it is necessary to weather the next residents.
recession. The federal tax overhaul has also had an
This budget proposal, however, is just impact on the legislative front in that two
the starting point for what is expected to state lawmakers have introduced Assembly
be months of negotiations with legislative Constitutional Amendment 22 (ACA 22) to
leadership before a final budget is passed claw back what they describe as a tax windfall
into law. And there is little doubt that benefiting corporations at the expense of
the Legislature, dominated by progressive working class families. The federal tax plan
Democrats, will negotiate to spend more
SP …Legislative Report continued on page 28
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8 CALIFORNIA MORTGAGE FINANCE NEWS
18
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Did you miss something? Log in to the California MBA ‘Members-Only’ portal for our archived presentations!
MEDIA & MARKETING
Media Malpractice ‘Reveal’ed in
Recent News Stories
I
by f you watch news of any kind these days, can lead a reader to a wrong conclusion. The
DUSTIN HOBBS, or surf the wild swells of social media, story purposefully excludes FHA lending
Communications one phrase seems to crop up again statistics and data from its analysis (FHA
Director, and again—“fake news.” While it began as a lending accounts for nearly half of mortgage
California MBA pejorative aimed by then-candidate Donald lending to African-Americans and Hispanics),
Trump at what he determined to be less than and then notes major racial/ethnic gaps in
accurate reporting, it has now become a catch- lending numbers by examining data submitted
all for people on both sides of the political to the government per the Home Mortgage
and cultural spectrum to dismiss news that Disclosure Act (HMDA). As many reading this
they disagree with, regardless of the facts. In know, that data is missing several key factors
a sense, “fake news” has been used so much that determine a borrower’s creditworthiness,
it seems to have lost any meaning at all. That including credit score, DTI, and LTV – which
said, I wanted to draw your attention to a are the predominant reason lenders deny
recent report that is truly an example of media mortgage applications. It’s not until paragraph
malpractice. 15 that the authors even cite those factors
Mid-February brought us the release of an as important, and then only in alleging that
inaccurate, biased, and shamefully slanderous lenders are somehow keeping that information
“report” by Reveal (from the Center for “secret” from the public.
Investigative Reporting) and the Associated Nonetheless, the authors allege despicable
Press. The report purports to examine motives to lenders for those racial/ethnic
instances of legal “redlining” in conventional disparities. All of that despite evidence
loans in many cities across the country, that minority homebuyers are no longer an
including several in California. The “legal” ‘emerging’ market, but are the backbone of
aspect refers to how mortgage companies today and tomorrow’s lending landscape.
have applied the Community Reinvestment According to the 2016 State of Hispanic
Act (CRA). The report cites lower mortgage Homeownership Report, authored by the
approval rates for Hispanic and African- National Association of Hispanic Real Estate
American borrowers, despite a 99% rate of Professionals (NAHREP), Hispanic households
CRA conformity. accounted for nearly three-quarters (74.5%)
However, despite the wide circulation of net growth in U.S. homeownership in 2016.
of the story, it is misleading at best, and is
a good example of how cherry-picked facts …Media & Marketing continued on page 29
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CALIFORNIA MORTGAGE FINANCE NEWS 11COVER STORY
Technology and
Employees
Today’s Mortgage
T
by here is a lot of talk these days about technology disrupting the residential
STACY MOHR, mortgage industry. It is impossible to go to a conference without there being
SVP Capital Markets, at least one session about technology. In fact, there are entire conferences
Mountain West Financial, Inc. with this as the main subject. There is no denying that our industry is undergoing an
exciting technology revolution.
This revolution touches all facets of our companies. One facet that may often be
overlooked is the human side of technology. More precisely, how is your company
using technology to connect with your employees and to support your company’s
culture? Just as a one-size-fits-all approach does not work with all customers, the
same can be said for employees. Is your internal technology strategy attracting
employees? Distracting them? Or maybe even driving them away? This area deserves
significant attention because it can result in high costs if not done well.
A company’s internal technology strategy includes topics such as email, texting,
video conferencing, telecommuting, instant messaging, and use of the internet. Let’s
take a look at a few of these in more detail.
EMAIL
Email is a necessity. However, in some instances, this piece of technology can
turn ugly. Have you ever been part of a seemingly unending chain of emails? Have
you ever zoned out of an email conversation because you were cc’d on a battle
between other parties? Have you ever experienced a misunderstanding because
typed communication lacks tone of voice and visual cues? (When is someone going
to invent a sarcasm font?)
Senior management should set the standards for when email use is appropriate
and when other forms of communication would be better. A written policy is best,
but keep in mind that such policies can vary among companies and should be suited
to your company’s culture. In addition, this is a learned skill and employees will
benefit greatly from coaching on how to use email effectively.
SP …Cover Story continued on page 13
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12 CALIFORNIA MORTGAGE FINANCE NEWS
18Cover Story continued from page 13…
TELECOMMUTING messaging a major distraction and area some of the consequences of it. In those
The use of telecommuting as a work of frustration. Another company may instances, consider how you can balance
option has mixed support. Some major place a high value on collaboration and any negatives by increasing other non-
companies have moved in this direction, communication. The benefits of using technological aspects of your business.
only to reverse course a few years instant messaging may far outweigh We’ve touched on a few areas
later. Telecommuting has the benefit of the social distraction component for of technology that call for careful
increasing your pool of job candidates. that company. consideration. The fact is that the
However, companies must carefully technological aspect is not the only
consider whether this arrangement fits WEB-BASED LENDING piece that needs to be considered.
well with the company’s culture. While the topics covered so far are The human factor, as it relates to an
Telecommuting’s success varies generic and not exactly “new”, a newer individual company’s culture, should
widely across both job duties and technology is currently being discussed be addressed before any technology
individual employees. Some employees at many of our organizations. There is a is added to the mix. Giving careful
thrive in an environment where they have huge focus on offering new technology attention to this aspect will go a long
more control and autonomy over things to borrowers in our industry. It seems way towards ensuring the success of
like temperature, sounds, and workspace. that employee acceptance of such your technology implementation.
Others find out that working from home technologies is often taken for granted.
is distracting or that they miss the human However, these changes can be drastic
interactions that occur in the office. and can have an impact on employee
Consider, too, how your company handles engagement. For example, you may
staff meetings and other activities. How have an employee who thrives on verbal
important is it that staff members attend interaction with borrowers. How will MAKE A
such events in-person? One other item this employee feel when all interaction DIFFERENCE!
to consider: how does the authorization now takes place through a computer
of telecommuting for certain employees screen? By having a discussion with staff
JOIN
affect the morale of those who remain regarding upcoming changes well in
in the office? Such arrangement may fit advance, decision makers can factor in
your company’s culture perfectly, or may any concerns prior to implementation.
contradict some company values. Often times it is impossible to know
exactly how a new technology will fit
INSTANT MESSAGING in with a company’s culture prior to The LARGER the group.
The LOUDER the voice.℠
Another area of mixed success is implementing it. It’s important to take
the use of instant messaging among a look at this on a regular basis. If your mba.org/maa
employees. Is instant messaging a company has already implemented
useful tool that increases productivity? technologies such as instant messaging,
Or, is it merely another social take a step back and consider how
distraction? The reality is that both of this is fitting with your company’s
these are likely to be true for a portion culture. Then, take a step forward and
of employees. The important piece is get feedback from those who use the
how such uses align with or diverge technology. If you don’t like what you
from your company’s culture. One see or hear, it’s never too late to make
company may be quite structured, some changes.
where output is priority #1. Such In some cases, a technology (such as
a company is likely to find instant email) is necessary, even if we don’t like
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CALIFORNIA MORTGAGE FINANCE NEWS 13ROUNDTABLE
Tech and the Mortgage Industry
EDITOR’S NOTE—This is the latest in a series dealing with the issues facing the real estate finance
industry. Each issue we touch on a different topic, asking CMBA’s experts for their thoughts on the
issue at hand. In this issue of CMFN, we talk to three execs neck-deep in the tech revolution sweeping
the industry. Linn Cook, is Director of Sales & Marketing at LendingQB, a SaaS provider of mortgage
origination solutions, headquartered in Costa Mesa; Brian Kneafsey is Head of Client Operations for
Blend, a San Francisco-based technology firm; and Paul Gigliotti is VP of Operations for West Coast
Mortgage, located in Sacramento.
The views and opinions expressed are solely those of the authors.
CALIFORNIA MBA: HOW ARE APIS ARE would have to build custom integrations for
MAKING IT SIMPLER TO DESIGN AND each tool they wanted to use—a costly and
UTILIZE SOLUTIONS FOR A SHORTCUT TO time-consuming process.
A GENUINELY ‘DIGITAL’ MORTGAGE? The spread of APIs across industries has
Cook: The nature of an API is that it led to software created to be pieced into larger
provides a more flexible and powerful method products. Today we have an “API economy”
for systems to work seamlessly with each of programs that do one action or process
other. This is key because the cost to build extremely well and integrate easily. This has
and maintain an integration largely determines helped lenders streamline complex processes—
the feasibility of any integration. The less such as mortgage applications—with platforms
expensive it is to integrate, the more likely like Blend. By making it easier for lenders to
innovative services will be available for lenders adopt powerful point solutions and create
to utilize. It terms of the integration itself, APIs tech stacks customized to their needs, APIs
enable vendors to do more than just exchange have helped make borrower-centric digital
data. Unique functionality can be invoked mortgages a reality.
or accessed through an API, creating more Gigliotti: API’s have allowed the mortgage
value from an integration and delivering more industry to automate the communication of
‘digital’ capabilities to the end user. data in a more consistent, secure, and timely
Kneafsey: APIs—tools for building manner. Anyone who has been through
and defining software interactions—have a mortgage transaction knows that the
empowered lenders to leverage the best tools paperwork can feel endless at times. API is
right out of the box. Without APIs, lenders
…Roundtable continued on page 30
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CALIFORNIA MORTGAGE FINANCE NEWS 15WHO’S WHO
JOSEPH SCHMITT & SKYLER NASRALLAH DINOS IORDANOU
Alight is pleased to Alight’s mortgage solutions business Dinos Iordanou,
announce the are Skyler Nasrallah and Joseph Chairman and Chief
continuation of Schmitt, both of whom are working Executive Officer of
its partnership on Alight’s professional services Arch Capital Group
with Northeastern team, implementing Alight Mortgage Ltd. [NASDAQ:
University Lending at some of the country’s top ACGL], will be
(Boston) and its world-renowned independent mortgage banking firms. recognized as the St. John’s University
Educational Cooperative and Career Skyler majors in economics and School of Risk Management 2017
Development (Co-op) program. The previously held a Co-op position at Insurance Leader of the Year at the
latest Northeastern students to join State Street Bank in Boston. Joseph organization’s 23rd Annual Insurance
is pursuing a bachelor of business Leader of the Year Award Dinner on
administration with a concentration January 17 in New York City.
Congratulations to our in finance. Prior to Alight, he held The award, traditionally awarded
Future Leaders a finance analyst Co-op position to an insurance industry leader for
Class of 2018! at The Boston Consulting Group. distinguished achievement over a
Jason Alderton, “We’re thrilled to welcome the next long career or special achievement,
MQMR
generation of professionals to Alight recognizes Iordanou’s career
Jennifer Armstrong,
One Reverse Mortgage and, as a graduate of Northeastern contributions to the insurance
Matt Clegg, myself, I can vouch for how utterly industry, his philanthropic efforts and
Catalyst Mortgage invaluable the Co-op experience is—it his work in helping build Arch Capital
Amanda Coffrini, set me on a path of success that my Group into a $13 billion company.
Sierra Pacific Mortgage
career has continued to follow right up “I’m truly honored to be receiving
Phil Garcia,
loanDepot until today,” said Michele McGovern, this award,” said Mr. Iordanou. “I’ve
Philip George, CEO, Alight, Inc. “And, it’s part of our been fortunate to be connected
CMG Financial commitment as a company—ensuring to phenomenal people over the
Josh Gibson, that we bring new talent into the course of my life and could not have
American Pacific Mortgage
industries we serve. Best of all, we achieved this level of success without
Michael Gonzales,
McCalla Raymer Leibert Pierce, LLC learn as much from our Co-op students their help. I feel that this award is a
Jennifer Khouri, and interns as they learn from us!” reflection of what the team at Arch
AAA-AMC In addition, Alight is pleased to has been able to build, and I accept
Erica Connors-Newberry, announce the promotion of Smit Banker this award on behalf of our 3,500
Catalyst Mortgage
to the role of Product Manager for employees around the world.”
Theo Newson,
CBRE, Inc. Alight Mortgage Lending. A two-year
Kimberly Shipp, veteran of Alight, Banker most recently
American Pacific Mortgage was a professional services consultant
Rekha Siddani, responsible for some of Alight’s most
AmeriHome Mortgage Company
prominent and sophisticated mortgage
Taylor Sims,
RWM Home Loans banking customers.
July White,
AmeriHome Mortgage Company
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16 CALIFORNIA MORTGAGE FINANCE NEWS
18WHO’S WHO
DEBRA JOHNSON JOE MCKONE TODD MCKENNA
Evergreen Home Land Home Financial Redwood Mortgage
Loans, a full- Services, Inc. (Land Corp. is pleased
service direct Home), a national to announce Todd
home loan lender mortgage banker, McKenna has
offering origination, introduced Joe joined the firm as an
funding and home McKone as its new Account
loan servicing with offices in six Area Manager for the Bay Area, Executive. Todd started in
Western states, announced that Southern California, and Nevada. December and will be covering San
Debra “Debbie” Johnson joined Mr. McKone, a 20-year veteran in Francisco and Marin Counties.
the company’s executive team as the mortgage industry is charged with McKenna has an M.A. in
chief financial officer, executive vice continuing the company’s successful Economics from University of San
president reporting to President Don growth pattern with an emphasis Francisco and a B.A. in Applied
Burton. in supporting our loan officers with Mathematics from UCLA. Todd holds
Johnson brings a strong financial building strong relationships within Series 7, 63 and 65 Licenses and just
services background to Evergreen, our communities. recently passed
having served in executive positions “Joe has a history of being a the Cal BRE Salesperson license
at Opus Bank, Cascade Bank, and strong leader and has the character exam. Prior to joining RMC he was
Homestreet Bank. She most recently to retain solid relationships with both V.P. of Corporate Sales at IPREO.
served as Chief Financial Officer our sales people and our customers”, He has worked for Oppenheimer
at Northwest Bank. With over 25 says Brad Waite, President & CEO & Company as well as JMP Securities
years’ experience in the financial at Land Home. He has an excellent in Institutional Equity Sales.
services industry, her expertise track record of driving production and Prior to that Todd was at Coast
includes strategic planning, financial yielding positive results – something Federal Bank and Shearson Lehman
management, cost analysis, and we are very excited to put to use in Mortgage Corp. in San Francisco.
productivity improvements. the Bay Area, Southern California and
“I’ve known Debbie for over 20 Nevada regions.”
years and I’m pleased to announce Mr. McKone comes to Land
that she will join our Evergreen family Home from First California Mortgage
as chief financial officer,” said Don Company (First CAL) where he
Burton. “Debbie is a well-known local was the Executive Vice President
leader in the mortgage and banking responsible for Wholesale, Retail,
community. I believe her contributions Consumer Direct, Affinity Sales and
will strengthen our unique culture at their Operation’s teams. He has over
Evergreen and our commitment to 15 years of executive level production
providing affordable lending solutions and operations team management
for our customers.” experience.
If you would like to submit an employee to
be recognized in an upcoming issue, email
dustin@cmba.com for more information.
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CALIFORNIA MORTGAGE FINANCE NEWS 17FEATURED RESIDENTIAL
Technology in the
Mortgage Industry
Resolve to Evolve
T
by here’s a gap in the mortgage industry transactions. An apartment complex in Dubai
JOE WELU, that’s growing wider all the time: It’s is offering first-choice units to people who
CEO, Total Expert, Inc. the difference between companies want to pay in bitcoin. Once a buyer decides
who are embracing and mastering the use to go ahead with the purchase, they get a
of technology in their businesses and those 15-minute price guarantee. Last fall, a flat
who are struggling to deal with it. There’s no in Ukraine became the first property to be
shortage of excuses for failure to incorporate sold using a blockchain. What will happen to
technology, including lack of leadership mortgage companies and originators who have
commitment and resistance; but the perceived had trouble adopting technology to address
difficulties of today will seem miniscule and marketing, compliance and other pain points
insignificant in the not-too-distant future. within a known process when the process
The words of a Greek philosopher who lived itself begins taking place in a completely
2500 years ago are oddly appropriate now: new dimension? Realizing that the industry
“The only thing that is constant is change.” is moving toward transacting in an intangible
Companies and producers who want to realm can help adjust your perspective on
succeed today and going forward should take adopting technology to manage traditional
Heraclitis’ famous words to heart and replace business activities that are still familiar at this
the concept of change with evolution. Change point in time.
isn’t coming—it’s here. Change—or rather, evolution—is no
Companies and practitioners in mortgage longer a choice in the mortgage industry;
and real estate who are grappling with but companies have the ability to determine
technology implementation, usage and their level of success in dealing with it. At the
return on investment need to realize that most basic level, companies and producers
cyber-sophistication is accelerating as fast need to get control of their systems, tools
as technology itself. For example, the terms and practices that manage known, tangible
“bitcoin” and “blockchain” are still relatively business activities. Do you have that control
new to the public; but even as some people now or are you somewhere along the path
are still looking up the words, cyber-currency in pursuit of it? Are you proactive, reactive or
and decentralized databases are already inactive?
seeping into mortgage and real estate
SP …Featured Residential continued on page 33
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18 CALIFORNIA MORTGAGE FINANCE NEWS
18FEATURED COMMERCIAL
Dan Friedeberg on
Life Insurance Lending
B
by arry Slatt Mortgage Vice President, which product types they sell on the insurance
DAN FRIEDEBERG, Behzad Boroumand, recently sat down side of their platform.
CEO, and interviewed CEO Dan Friedeberg
Barry Slatt Mortgage to discuss frequently asked questions about Q: Boroumand: Are Life Insurance Companies
Life Insurance Company lending. good multifamily lenders?
The following are excerpts from the A: Friedeberg: Yes. Life Insurance Companies
2/27/18 interview: do like to lend on multifamily properties.
They compete well with agency lenders,
Q: Boroumand: Are Life Insurance Companies CMBS lenders, and banks in this space. It is
portfolio lenders? uncommon for agency lenders, CMBS lenders,
A: Friedeberg: Yes. Most Life Insurance or banks to compete with Life Companies
Companies lend money from their balance when it comes to securing fixed rate loans
sheet and treat the loans as a long term longer than 10 years in duration.
invested assets. Life Insurance Company
lenders generally hold between 5-20% of their Q: Boroumand: Do Life Insurance Companies
assets in commercial mortgages. They may only make low leverage loans?
move this allocation up or down depending A: Friedeberg: No. Every Life Insurance
on factors such as: A) the relative yield that Company has its own profile of risk that it is
they are receiving on commercial real estate willing to take on its invested assets. Some Life
loans versus other investments. B) Perception Companies are only competitive in making low
of exposure to the asset class. C) Perception/ leverage loans, while others are willing to make
opinion of the Chief Investment Officer. loans up to 75% of value.
Q: Boroumand: Can Life Insurance Companies Q: Boroumand: Do all Life Insurance Company
offer fixed rate loans for longer durations than loans have restrictive or long-term prepayment
other types of lenders such as banks? penalties?
A: Friedeberg: Yes. Every Life Insurance A: Friedeberg: No. Although yield-
Company has different investment needs, maintenance prepayment penalties are
but it is common for Life Companies to offer preferred to retain the long-term investment,
3,5,7,10,15,20, 25 and sometimes even 30- many Life Insurance Companies can structure
year fixed rate loans. An Insurance Company’s
ability to provide different terms is dictated by …Featured Commercial continued on page 34
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CALIFORNIA MORTGAGE FINANCE NEWS 19Latest Commercial Deals
CBRE Arranges $6.395M for Multifamily Project
The mortgage banker for this
transaction is a leading crowd-funded
real estate investment firm based in
San Francisco.
Freddie Mac’s Small Balance Loan “Not all multifamily projects
(SBL) program. in college towns have a high
Adam Dosskey of CBRE’s concentration of undergraduate
Wholesale Lending team, utilized students; in this case, the borrower
the SBL program’s five-year hybrid was looking to diversify his lender
(fixed-to-float) rate to secure the relationships beyond his bank, and
non-recourse loan that provided with the undergrad density less than
substantial cash out, a five-year fixed 50 percent at this property, this was a
CBRE Capital Markets has arranged rate, 30-year amortization and one great fit for CBRE’s SBL program,” said
$6,395,000 for the refinance of 1717 year of interest-only, at a rate near Mr. Dosskey, vice president, CBRE
Oxford Street, a 30-unit multifamily four percent. To improve pricing, the Wholesale Lending.
project in the San Francisco Bay Area borrower opted for the program’s
submarket of Berkeley, CA, under yield maintenance prepayment option.
Greystone Announces $10.1M Deal for Century City Property
The stunning Class “A” property is execution culminates a successful
comprised exclusively of one-bedroom refinance process for several
/ one-bath / office units detailed investment properties,” said Mr.
with high-end appliances and interior Salka. “We appreciate their guidance
finishes. The property also includes throughout the financing cycle.”
Greystone, a real estate lending, charging stations for electric vehicles.
investment and advisory company, “Greystone’s multifamily financing …Continued on page 21
today announced it has provided platforms are an ideal solution
$10,130,000 in Fannie Mae financing for mid-sized properties, which
for a multifamily property in Century can also see additional benefits
City, CA. The loan was originated for characteristics such as green INDUSTRY NEWS
by Matt Stevens of Greystone’s certifications and other details MEMBERSHIP
San Diego office with Don Salka incorporated by owners,” said Mr. CONFERENCE INFO
of First Pacific Financial acting as Stevens. “For a Fannie Mae small loan,
RESOURCES
correspondent on the transaction. the terms are highly competitive on
And Much More!
The refinanced property, which properties of this caliber.”
Visit us on the web @
contains 33 units, received a 10-year “As a continuation of our valued
fixed rate Fannie Mae small loan. www.cmba.com
relationship with Greystone, this
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20 CALIFORNIA MORTGAGE FINANCE NEWS
18Latest Commercial Deals
Continued from page 20…
HFF Closes $288.8M Financing for MIRO Towers in San Jose
steps of the future downtown San
Jose BART station.
The HFF debt placement team
representing the borrower included
senior managing director Charles
MIRO will have a mix of one-, two- Halladay, director Brandon Roth, and
and three-bedroom layouts, including analyst Jason Carlos.
16 penthouses. Residences will have “There was a tremendous amount of
access to over 50,000 square feet enthusiasm from the lending community
Holliday Fenoglio Fowler, L.P. (HFF) of thoughtfully curated top-of-the- for this project, which is a testament not
announces the $288.8 million line amenities, including a rooftop only to Bayview Development’s best-
construction financing for MIRO, a pool, concierge services, fitness, spa in-class team, but also to downtown
pair of 28-story luxury apartment facilities, pet facilities, fire pits and San Jose’s bright future as one of the
towers comprising more than 600 rooftop lounges boasting unparalleled top real estate markets in Silicon Valley,”
residences and 20,000 square feet views of the city’s skyline. The said Roth. “BSRECP III immediately
of retail and commercial space in San property’s location at 167 E Santa recognized these traits and performed
Jose, California. Clara Street in downtown San Jose exceptionally-well throughout the
Due for completion in 2020, has a Walk Score® of 96 and is within process.”
Newmark Announces $3.75M in Financing for Three Properties in
South Bay Area
to Highway 101 in Redwood City,
CA, Newmark arranged $1.5 MM
to refinance a remodeled 8,200 sf
properties located in the South Bay Class-B office building. Currently, the
Area. Eric Von Berg, Principal, along multitenant office building is 100%
with Tom Dao and Cristian Streeter, occupied, with the owner occupying
Associates, worked on behalf of 38% of the property. Newmark
the two borrowers in arranging the arranged a flexible prepayment,
financing through a correspondent life fixed-rate, 10-year term, 25-year
Newmark®, the largest independent
company and a national bank. amortization non-recourse loan with a
commercial mortgage banking firm in
555 Price Avenue, Redwood City, national bank.
the U.S., has secured $3.75 million in
financing for three separate commercial CA ($1.5 MM)—Located adjacent
…Continued on page 22
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CALIFORNIA MORTGAGE FINANCE NEWS 21Latest Commercial Deals
Continued from page 21…
NorthMarq Arranges $57M Deal on
Two Industrial Flex Properties,
San Jose, CA ($2.25 MM)—Newmark
San Diego Office Building
arranged $2.25 MM in refinancing for
two industrial flex properties located
in San Jose, CA. Located in the heart
of Silicon Valley, both properties are
100% leased and total 26,000 sf. term, the first three of which are
Newmark was able to lock rate at interest-only followed by a 25-year
application and arrange two separate amortization schedule. NorthMarq
25-year, fully amortizing loans with arranged the financing through its
one of its correspondent insurance relationship with a regional bank.
Mike Dobbins, senior vice president of
company relationships. “The lender is a local regional bank
NorthMarq Capital’s San Diego office,
“Eric and his team were and provided the most competitive
arranged a $57,120,000 construction
instrumental in helping us navigate terms. The borrower is an owner-
loan for Watermark II, a Class-A office
favorable market conditions to refinance user which previously developed a
building comprising 158,000 sq. ft.
our properties with a terrific lender at neighboring Class-A office building
located in San Diego, California. The
very attractive terms. Overall we were they also occupy,” noted Dobbins.
loan was structured with a 5-year
happy with the entire loan process.”
–Harry How, Fornine Investment, LLC.
Redwood Mortgage Announces $3.2M Deal
Have you updated your
Membership Directory Redwood Mortgage recently properties to ready it for sale.
announced a completed deal for Redwood Mortgage funded this
listing?
$3.2M crossed to multiple parcels $3,200,000 cash out loan based upon
One of the benefits of your
(cash-out). The borrower requested the collateral, property’s income
California MBA membership
a commercial bridge loan on their and the borrower’s strong financial
is inclusion in our online
retail and office buildings, with cash statement. The LTV was 54%.
Membership Directory!
Make sure your company’s out to improve one of the commercial
info is up to date! Email
dustin@cmba.com for
more information! If you would like to submit announce your latest commerical deal in an upcoming
SP issue, email dustin@cmba.com for more information.
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22 CALIFORNIA MORTGAGE FINANCE NEWS
18RESIDENTIAL
Digital Mortgage Enters Phase II of
Its Digital Transformation
W
by hen the mortgage industry began format and the MERS® eRegistry as the
SIMON MOIR, its digital transformation, the system of record for identifying the current
SVP & General Manager, first phase largely focused on location and controller of the eNote.
Digital Mortgage, improving borrower experience and increasing eClose: The parties involved in the
eOriginal the quality of data captured during the front- transaction come together at either a virtual or
end loan application process. However, as physical closing table to sign loan documents.
mortgage continues its digital shift, phase An eClose doesn’t necessarily mean all
two is clearly focused around the electronic documents must be signed electronically. In
closings (eClosing), which provides originators fact, for certain loan programs or geographical
with an expansion of the digital benefits seen locations, a hybrid approach may be the only
in phase one, and additional value centered option currently available.
around greater compliance, operational eVault: Once the eNote is created and
efficiency and accelerated execution of the executed, it needs to be managed correctly.
asset into the secondary market. Using an electronic vault, authorized users can
As digital continues to transform mortgage perform key actions against the eNote including
processes, participants in the ecosystem registration, eDelivery, transfer and life of loan
need to develop a clear understanding of the events. Additionally, the eVault is designated
key components, identify agents of change, as the location for a given note holds the
evaluate the long-term value of technologies, “authoritative copy”, or electronic original.
and embrace the importance of scale to drive
industry adoption of digital mortgage. GOVERNMENT-SPONSORED ENTERPRISES
CATALYZE CHANGE
THE COMPONENTS The Government-sponsored Enterprises
It’s no secret that mortgage involves a (GSEs) are key agents of change in the
variety of parties and steps that make the entire mortgage industry’s shift to digital processes.
transaction complex. Fortunately, technology Fannie Mae and Freddie Mac define an
has enabled a remarkable transformation in the eMortgage as, “a mortgage loan where the
way homes are purchased. The key components critical loan documentation – specifically the
for phase two of digital mortgage are: promissory note (eNote) – is created, executed,
eNote: The electronic form of the paper- registered, transferred and ultimately stored
based negotiable promissory note. The
mortgage industry utilizes the SMARTDoc™ …Digital Mortgage continued on page 34
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CALIFORNIA MORTGAGE FINANCE NEWS 23RESIDENTIAL
Digitize or Decay
The Future of Home Lending is Now
P
by aperwork has long dominated the the industry, but many lenders are still
SARAH HODGES, mortgage lending process, with more reluctant to incorporate new technology
National Account than half of all loan applications due to the perceived upheaval and high
Executive, Axacore containing in excess of 500 pages, and a implementation costs. However, in reality
further 20 percent including 1,000 to 2,000 the long term gains usually outweigh
pages . That amount of paper is costly, not
1
the short term pains - every step of the
only from an environmental standpoint, but mortgage process can be simplified and sped
also because of labor costs, and its potential to up if lenders are willing to embrace new
deter would-be applicants. technologies.
Attitudes to home buying have changed During the loan application process, a
in recent years and digital technology has secure web portal or mobile application with
been the catalyst. One report suggests that online document storage makes it easier for
50 percent of millennials now search for both lenders and borrowers to manage the
properties on their phones, and among those, numerous documents required for a mortgage
26 percent end up purchasing a home they application. Lenders can also incorporate
found that way . This may just be the first step
2
mobile image capture into their portals to
in a long and complex home buying process, allow borrowers to capture and transmit
but it sets a standard for the steps that photos of required paper documents, further
follow; today’s homebuyers crave the speed, decreasing the burden on borrowers while
efficiency, and convenience that only digital increasing lender efficiency.
solutions can offer. When it comes to loan approval, lenders
The 2017 Borrower Insights Survey of must balance speed with risk, and there is
Homeowners and Renters report released a growing body of technology that aims to
by mortgage automation provider, Ellie Mae, help lenders automate such processes in a
revealed today’s homebuyers place a premium way that increases efficiency and accuracy.
on speed and simplicity when applying for a Storing digital copies of client documents
home loan . The research also revealed that
3
allows lenders to easily share information with
one-quarter of homeowners (28 percent) their underwriters - these documents can
applied for their most recent mortgage also be processed through automated rules
using a combination of online and in-person engines that conduct risk analyses to provide
interaction.
SP Evidently, changes are happening within …Home Lending continued on page 37
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24 CALIFORNIA MORTGAGE FINANCE NEWS
18COMMERCIAL
The Impact of Technology on
Commercial Real Estate Assets
I
by n commercial real estate development, fundamentally affect what commercial real
JOE DERHAKE, obsolescence and new technology estate assets perform well.
PE, CEO, Partner drive consumer behavior and ensuing Desirability of location is a direct
Engineering & Science, demand. Return on investment for developers derivative of transportation capabilities.
Inc. and property owners depends critically The oldest eastern seaboard cities
on foreshadowing and adjusting to these were established when ports and water
demographic changes through building design, transportation were the only option. The
considering how location, layout and function advent of rail systems expanded populations
itself is impacted by imminent revolutions such to outer cities like Dallas and Denver. But the
as driverless cars, ubiquitous e-commerce proliferation of automobile ownership after
delivery and commuting hubs. Lenders, in the Second World War expanded accessibility
turn, will see an increase in opportunity to to outer suburbs and exurbs of distant cities
finance these new assets while simultaneously and towns. The driverless car will further
mitigating risk due to obsolescence. revolutionize tolerance for a long daily
As commercial real estate stakeholders commute. Being able to eat, sleep or work on
look to the future, their primary consideration the way to the office changes the conventional
for asset valuation should be real estate layout, wisdom of a desirable location, and may drive
design and location. The most successful consumers to choose quality over proximity for
commercial buildings of the future will the home or office! Interestingly, these forces
integrate technology seamlessly into optimized may counter or slow the continued migration
function and be located conveniently for to livable, walkable urban centers.
transportation, population shifts, delivery and Driverless cars will also change the role
lifestyle. that public transport plays in the design of our
Presented below are four technology cities. In the future, autonomous Uber-like
considerations that will have the most impact services will serve as (a far more convenient)
on building design in the coming decades. alternative to trains and buses, which may
diminish the appeal of clustered, public-
DRIVERLESS CARS transport-oriented development.
No technology will have more impact on Driverless cars will also create new
how we use our roadways, public transport, opportunities for developers and governments
parking lots and gas stations than driverless
vehicles. This transportation evolution will …Technology continued on page 38
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CALIFORNIA MORTGAGE FINANCE NEWS 25Save the Date for our
2018 Conference and Events!
1st Annual Chairman’s 46th Annual Western Secondary
Conference Market Conference
APRIL 8–10, 2018 JULY 16–18, 2018
The Lodge at Torrey Pines, La Jolla, CA Westin St. Francis Hotel, San Francisco, CA
Register now at www.CMBA.com Register now at www.CMBA.com!
San Diego After Hours 23rd Annual Western States
APRIL 11, 2018 Mortgage Technology & Servicing
Offices of Klinedinst PC, San Diego, CA
Register now at www.CMBA.com
Conference
AUGUST 5–7, 2018
HOSTED BY
Hilton Bayfront Hotel, San Diego, CA
Register now at www.CMBA.com!
SPONSORED BY
21st Annual Western States CREF
Conference
SEPTEMBER 5–7, 2018
Wynn Las Vegas, Las Vegas, NV
Register now at www.CMBA.com!
Find out how you can participate
in YOUR association in 2018!
Get Email Dustin@cmba.com and get
Plugged in! the most out of your membership!
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26 CALIFORNIA MORTGAGE FINANCE NEWS
18Welcome to the California MBA family!
NEW MEMBERS
AKERMAN, LLP DOCPROBE MORTGAGEPRO/WOOD GUTMANN
Industry Professional Advisor Industry Technology Provider & BOGART INSURANCE BROKERS
Fort Lauderdale, FL Lakewood, NJ Industry Product Provider
Tustin, CA
ALTISOURCE GREATER NEVADA MORTGAGE
Industry Technology Provider Broker SHAPIRO, VAN ESS, SHERMAN &
Washington, DC Carson City, NV MARTH, LLP
Industry Professional Advisor
BENJAMIN MANAGEMENT GROUP, HOMEBRIDGE FINANCIAL SERVICES Costa Mesa, CA
INC. Residential Mortgage Banker
Industry Professional Advisor Iselin, NJ WEST COAST MORTGAGE GROUP
Irvine, CA Residential Mortgage Banker
HOUSING TRUST SILICON VALLEY Sacramento, CA
BLEND Broker
Industry Technology Provider San Jose, CA
San Francisco, CA INDUSTRY NEWS
MCGLINCHEY STAFFORD MEMBERSHIP
CALIBER HOME LOANS Industry Professional Advisor CONFERENCE INFO
Residential Mortgage Banker Irvine, CA RESOURCES
Coppell, TX And Much More!
Visit us on the web @
www.cmba.com
Executive Director’s Letter continued from page 27…
Through their home grant program, will be leading the efforts on this organize our educational webinars
this foundation provides mortgage California fundraising effort. If you or be a host for one of our regional
and rental assistance payment grants are interested in participating in the networking events in 2018.
to parents and guardians caring organizational committee for this Remember that membership is
for a critically ill or injured child, event, you are invited to contact Jered by company so all employees of any
allowing them to take unpaid leave (jede@hhlawyers.com) or Kerry (kwf@ member company are welcome to
from work without jeopardizing the severson.com) directly. be an active part of our programs in
loss of their homes. Our fundraiser Of course, I invite you to take 2018.
will take place in December 2018 in advantage of all of the other benefits Wishing you all the best for a
Orange County. I send a very special of membership including participating successful 2018!
thanks to Jered Ede of Hall Huguenin, in any one of our organizational
LLP and Kerry Franich of Severson committees for our annual
& Werson. These two individuals conferences, our committees that
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CALIFORNIA MORTGAGE FINANCE NEWS 27You can also read
