Michael Detwiler, CEO of Mortgage Cadence , Greenwood Village, Colo., said secure connection through Secured Socket Layer (SSL), 128-bit encryption and proprietary algorithms to protect data exchanges are critical components to protect consumer information.

"As service providers and credit companies collect data, clients ask if we the ability to push and pull that data in a secure manner. Our answer is 'yes,'” Detwiler said. “The data repository will collect through branches, loan originators or service providers. We are more the foundation that provides the ability to get that data in and push that data in a secure pathway.”

Phil Huff, president and CEO of eLynx, Cincinnati, Ohio, said his concerns are more about hackers breaking into major data centers rather than individual accounts. Huff said pressures from top level business hierarchy can cause mistakes and potential short-sightedness in the process if an intermediary does not exist between operations and high level officers.

“I am a firm believer that every organization needs a CTO [chief technology officer] with CIO [chief information officer] reporting responsibilities,” Huff said. “If you bring that level of importance up to the CIO or CTO, then those decisions are going to be made effectively and someone is going to be responsible for it, the same way we hold CEOs responsible for accounting procedures. The CTO or CIO becomes accountable for those security procedures.” 

Spencer Van Pelt, CIO of Republic Mortgage LLC, Las Vegas, a firm that originates nearly $1.5 billion in loans a year, led the implementation of Hyland Software Inc.’s OnBase software for eMortgage delivery, document imaging and to enhance data retrieval. The first job of a CIO, however, appears to be making the change to technology in the first place.

“It has to do with change,” Van Pelt said. “There are processors, underwriters, closers, post-closers and the rest of the processing line who are so used to a particular system and particular types of files. They like the paper. If you get them to try and change, there is resistance up and down the line. It is just tremendous…It takes the IT department a lot of ‘selling’ to corporate to get them to start making changes.”

“All of a sudden, there is an investment and big initiative underway that is being driven by the executives, but the head of underwriting in the Northeast has to not only accept that there is going to be a change but become a proponent of it and help integrate it into the day to day lives of the people that report to them,” Detwiler said. “[Some initiatives] fail because executives do not help the day to day operations [personnel] understand the goals and intent and preemptively deal with what the effects of implementing technology are going to be. I do not see it anywhere.”

Huff said a CIO or CTO is responsible for the “controls” or procedures in place to protect customer information as legislated in the Graham Leach Bliley (GLB) Act and Sarbanes Oxley Act (SOX). Policies and procedures need to be part of the daily routine and the position of CTO/CIO requires consistent follow up on the process. “It has to become part of the work life. The threat of what can happen [i.e. cyberterrorism] is driving awareness from our society to a point where we are all recognizing the serious nature of it more and more,” he said. 

To test its security, eLynx hired CyberTrust, a Herndon, Va. security firm that attempts to hack into the eLynx network to discover any holes in the system. “There is e-commerce that is not being enabled today because of the threat to ID security,” Huff said. “We have a SISAC 70 audit and Cybertrust with random [attempted] hacks and break-ins to the network to make sure security is up to par."

Externally, Republic Mortgage has 128-bit encryption to keep hackers from breaking into its data. Internally, different groups have access to various screens at the company. For example, the front office does not have certain rights and permissions as the back office staff while chief operation officers have access across the enterprise.

Meanwhile, network administrators play a number of roles and have a number of responsibilities but, as CIO, Van Pelt is responsible for security. "Everything [with data security] leads up to me for accountability for the company," he said.
(Back To Top)

Affluent investors appeared to be looking past Hurricanes Katrina and Rita in September to longer-term, core issues such as the economy, politics, and oil and gas prices. In a special hurricane-related question asked of affluent investors, 71 percent said the Gulf Coast disasters would have little or no impact on their investment decisions over the next 6 months, the Spectrem Group said.

"It took a while, but millionaires finally have succumbed to the pessimism that has dogged the overall affluent population throughout 2005. All year long, millionaires had represented a source of unusual optimism in contrast to the broader affluent group, which has been neutral since March,” said George Walper, president of Spectrem Group. “However, the September decline in the millionaire index has knocked them out of mildly bullish territory. This represents strong confirmation that the entire affluent population no longer feels very good about the investment environment. And their focus on longer-term issues such as the economy, presidential politics, and oil and gas prices suggests this pessimism may be with us for some time."

When asked what the biggest threat to their household financial goals, affluent investors cited: the economy (15 percent), the presidential election and results (8 percent), oil and gas prices (8 percent), unemployment (6 percent) and health-related issues (6 percent) as their key concerns. Concern about the economy increased from 13 percent in June, compares to 10 percent in March.

Nearly 20 percent of millionaires cited the economy as their biggest concern. Ranking immediately behind the economy for millionaires were the presidential election and results (14 percent) and unemployment (9 percent).
(Back To Top)

IDNox is platform independent. It uses API’s (application program interfaces) that allow users to integrate the product through XML or HTML, and it operates over TCP/IP or as a stand-alone application.

****
Los Angeles–based Low.com, introduced Lead Express, a lead platform to its mortgage banking partners. Lead Express has custom filters, as well as additional filters such as per-area code, per-state and per-day lead capping.

****
Commerce Velocity, Irvine, Calif., announced that Funding America, Houston, selected its CQ BrokerConnect and automated underwriting (AU) platform.

****
Advectis Inc. announced it is developing a BlitzDocs Connector with Flagstar Bank. The connector will allow BlitzDocs customers to deliver BlitzDocs electronic loan folders to Flagstar’s imaging systems.

BlitzDocs Connector is a component of the BlitzDocs Collaboration Suite, featuring capture, submit, organize, underwrite, audit, share and archive of loan documents electronically using BlitzDocs’ collaborative electronic loan folder, e-Folder.
(Back To Top)

According to MRG, the mortgage financing follows the exceptional leasing activity experienced throughout the entire Rechler Equity portfolio over the past two years, when new leases for over 1.5 million square feet of space were signed. The Nationwide loan is for a 15-year term, based on a 30-year payout, with the first seven years interest-only.

The five industrial properties total more than 500,000 square feet. Properties covered under the new financing include 100 Engineers Road, 45 Adams Avenue, 400 Moreland Road and 1516 Motor Parkway in Hauppauge and 19 Nicholas Drive in Yaphank.

“This portfolio presented an unusual assignment as we had two goals, both of which were mutually exclusive,” said Jonathan Goldman, executive vice president at MRG. “The ownership’s predisposition for long-term financing had to be balanced against a desire for a significant interest only period on a loan that was to be leveraged to $68 per square foot. Interest only tends to be most readily available from investment banks, while insurance companies are primary sources for capital needs greater than 10 years.”
(Back To Top)

Bring a new vision to your team and attend MBA's Management Track sessions.

The Disney Approach to Leadership Excellence
October 24, 2:00-3:15 p.m.
Take the fundamental leadership philosophies guiding the success of the Walt Disney World Resort and adapt them to your organization. Combining classroom sessions, application exercises, field experiences and interaction with Disney leaders, this session guides you in discovering the leadership principles that are at the core of Disney's organizational strength.

The Art and Science of High Performance
October 24, 3:30-4:30 p.m.
Andrew Bennett, founder of Bennett Performance Group, weaves together a compelling case about the need for inspiration in our work, and how it is closely linked to financial success. He discusses how inspiration builds enduring, positive energy into your organization's culture, connects the hearts and minds of customers, employees, suppliers and communities, and creates compelling reasons for staff members to work with their organizations. Walk away from this session with six tools for building inspiration-driven, high performance into your organization.

Four Generations in the Workplace: Searching for Common Ground
October 25, 11:00 a.m.-12:15 p.m.
For the first time in history, four distinct generations-Matures, Boomers, Xers and Millennials-are employed side by side in the workplace. In this session, retention and generations expert Cam Marston discusses common generational characteristics, specific leadership needs of each generation, the new definition of company loyalty and fresh guidelines for team building. And, he provides valuable advice about the common ground employees share-the intensity with which each generation holds fast to its value systems.

Organizational Change and Performance
October 25, 2:45-4:00 p.m.
Corporations often struggle in creating a common vision and in communicating that vision throughout their companies. In this session, executive coach, John Parker Stewart provides senior managers with guidance on organizational structure, personnel placement and identifying company needs. He specializes in melding together corporate cultures and uniting people with differing backgrounds and heritages.

Register Today
Join the largest gathering of residential real estate finance professionals at MBA's 92nd Annual Convention & Expo. The convention offers strategies so you can adapt and adjust your business to thrive in a constantly changing marketplace. While providing opportunities to network with your peers, the convention also offers the opportunity to gather valuable information on innovative business practices, learn about winning products and services, get updates on the latest technology, and to meet and exchange ideas with industry leaders.

For more information, visit the Convention Web site at http://events.mortgagebankers.org/92nd_Annual/default.html.
(Back To Top)

What Robbins saw was a company that had grown significantly from scratch over the past three and a half years: from one branch to 29; operations in all 50 states, recent expansion into subprime and correspondent lending; and a Top 20 wholesaler. The company's strong growth also translated into national recognition--Robbins is currently vice chair of the Mortgage Bankers Association and is slated to become chairman for the 2006-2007 term.

But what Robbins also saw was a top 10 that consisted largely of bank-affiliated operations, which had the capital, the personnel and the cost of funds that made competition more difficult for AmNet down the line. Furthermore, AmNet’s investment in subprime and correspondent lending had required a huge reinvestment of profits over the past two years.

It was that realization that led to a strategic $83 million acquisition by Wachovia Corp., Charlotte, N.C., of AmNet Mortgage. Robbins, who under the terms of the acquisition has a minimum three-year contract to continue as AmNet's CEO, calls the acquisition a “win-win.” It gives AmNet, which will remain largely intact in San Diego, a strategic alignment with a major lender that maximizes shareholder value.

“This merger gives our stockholders the ability to maximize the value of our mortgage banking business which has been created over the last four years,” Robbins said. “Our employees and our customers will also benefit from this alignment with a major financial institution. AmNet Mortgage is delighted to become part of the Wachovia family and continue its tradition of excellence.”

The soul-searching that led to the Wachovia acquisition started with looking at what it would take to crack the top 10, Robbins told MBA NewsLink. “We broke it into several areas. One of the things I looked at was who was in the top 10. And really, what was kind of amazing was that they were all bank-affiliated. So I looked at their capabilities that AmNet did not. When I honestly looked at it, the capabilities were significant.”

For example, Robbins said, Wachovia had a cost of funds that “significantly lower” than others—as much as 130 basis points better in the warehouse lines than AmNet’s. “That’s a huge pricing differential to give away, when you’re doing $16 billion in production,” Robbins said. 

Additionally, the top 10 banks had a federal pre-emption, which, as AmNet expanded through the U.S., was significant. We’re licensed in all 50 states, and have 50 different regulatory structures to go through,” Robbins said. “It is very inefficient. Wachovia has access to a portfolio of products, because their treasury group typically has some investment in mortgages and obviously looks to an internal source of origination before paying a premium in the marketplace. Most of the major banks have a securities trading group that trade securities worldwide—obviously more than our capabilities.

Larger banks also had the ability to put sizable investments to put into the creation of technology. “We have 24-25 people in our technology department; Wachovia has thousands,” Robbins said. 

Overlay that with a strategic look as to what the markets look like over then next five years—rates will got up; further market consolidation; more difficult pricing scenarios and increased legislative efforts—and Robbins realized that operating in more difficult mortgage environment without a bank affiliation would be extraordinarily difficult.

“We have seen the market’s response to what they see in raising rates,” Robbins said. “The degradation has occurred, if you see mortgage banking stocks across the board—they’re all down. And this is the market factoring in what has been coming off of several of the biggest years for the industry ever.”

In the end, Robbins said, AmNet had a clearer picture. “What we realistically looked at was, how does AmNet stay competitive with Countrywide, with Wells Fargo, with Chase, that can spend millions a year in new technology and have hundreds of people in their technology groups driving innovations,” he said. “What I feared was that we would struggle to remain competitive in technology and unable to compete with those resources. So in looking at it, we thought that the shell we were living in wasn’t efficient.”

Under the terms of the merger, which is expected to close in the fourth quarter, AmNet will operate as a wholly owned subsidiary of Wachovia. Wachovia also will continue to originate residential mortgages and home equity lines of credit through Wachovia Mortgage Corp.

“We are excited about the AmNet Mortgage acquisition, and the strategic alignment of our residential mortgage and securities businesses,” said Curtis Arledge, managing director and head of the fixed income division in Wachovia Securities, Wachovia’s corporate and investment banking unit. “The expansion of our residential mortgage business reflects an important enhancement to our market-leading structured products capabilities.”

Ultimately, Robbins said, the acquisition should produce “significant shareholder growth” in the long term.

“Wachovia is paying a premium over the value of the company,” Robbins said. “And if you look at this over the next two years, we do think it will maximize shareholder value. In the past three and a half years we’ve created $30 million in additional equity and we’ve grown the business tremendously. I think that what we have is a wonderful story and one that, if fairly looked at in the light of day, benefits both the company and the shareholders and positions us as a company in the future.”
(Back To Top)