Automation & technology

Communication and collaboration: The correspondent investor’s secret to success


Do you want the key to a correspondent investor’s success? Learn how effective collaboration between correspondent investors and their customers leads to collective wins.

In this podcast, hear from Mark Daly, SVP of Mortgage Originations Support, Flagstar Bank, and Eric Kujala, Product Marketing Director, ICE Mortgage Technology, as they discuss how investing in effective customer communication tactics can help you:

  • Meet your customers where they are
  • Provide solutions to support the business goals of your customers
  • Exceed customer expectations and achieve stronger retention rates

Welcome to our open house. Instead of examining hardwood floors, closet space, and kitchen layouts, we're taking you on a tour of what's happening across today's mortgage industry. During each episode, we'll hear from industry leaders and subject matter experts to give us an inside look into a hot topic, cutting edge technology, or new trend that can help accelerate your digital journey. Thank you for joining us. Come on in.

Hi. Welcome everyone. Thank you for joining us for another episode of Ice Mortgage Technology Open House with me today. I'm very excited to kind of share some of the time today with a good friend of mine, Mark Bailey, one of the Svp's over at Flagstar Bank in old stomping grounds of mine, actually way back in the day. So, Mark, thanks for joining us today. I'm excited to talk to you. So how's everything going, my friend? Eric, how are you doing? I'm doing well. Happy New Year. Happy New Year. Is it, is it 2021? I heard a rumor. Yeah. Let's see how long we can say Happy New Year. That's right.

Yeah. Long to keep. We can keep saying it. Are you are your Christmas lights still up? I still have a couple in the neighborhood. No, I'm. I'm fully down. It was only a couple weeks ago but I'm fully. I'm fully undecorated. People seem to be elongating the Christmas lights in my neighborhood for some reason. But that's OK. It brings cheer. That's all cold. It's cold and it's cold. That's right. And it's cold. That's right. Before we jump into this, I know we're going to spend some time talking about the correspondent acquisition process and so on. But I'm always curious to find out you don't go to college for this. I didn't go to college to go in the mortgage industry. So I'm.

Just curious to see how people get into this industry. So I don't know if you got a story to share, but I'd love to hear it. I do. I went to college actually for a degree, so I got out of college. The job market was really horrible back that long time ago. And so I just thought it was just try to get into a company and see where you can advance from within. And so I actually started with Lagstar on the banking side in 1994. So it was literally my first job out of college and really wants to be started on the banking side literally as a teller opening new accounts and then figured out and those mortgage guys.

To have a lot of fun, maybe mortgage is where it's at. And eventually worked in collections for mortgage warehouse which was a new department for us back in the late 90s and then eventually got into the sales support side. So you are a Flagstar life for true and true. I know that's unique for both our industry and just like the moment in time. But yeah, I just celebrated 27 years with Flagstar this year. If I never left, it would be 19 years. And the only reason why I left is because I got sold and then sold again. Yeah and then finally.

Right, which is great. So the way we kind of looked at this, what we want to kind of discuss today is correspondent acquisition process. We know Flagstar has got retail, wholesale and obviously correspondent and even into the servicing world as well. The way we've kind of viewed the correspondent purchasing process or the landscape I guess is probably best way to put it, we've kind of oversimplified to kind of three parts, right. It's the ability to collaborate with your customers, your selling community, you know kind of automate the the review, the pre purchase and purchase review of those loans when they come in specifically around delegated right, non delegates.

Is a similar beast to wholesale. So kind of focus on the donor channel and then ultimately how does that feed into your execution strategy, right, whether it feeds A servicing portfolio or to the secondary, right. That's kind of the three pronged approach to the correspondent acquisition process. So I'd be curious if one of you guys agree with that, I think that'd be question number one for you. You know I think if you're speaking delegated that, that really it's what it's about because you're not doing a lot of the heavy lifting, it's a secondary market transaction.

And so it's how do you make that much more efficient when you start talking about collaboration, it's just communication on essentially trades they're making with you where you're buying loans from them and then into your point then I think we're going to talk about a little bit more how you automate it and then about how you execute it. But yeah, I mean those are kind of the the big things and back and forth. There is also risk management that is a trade off. There's you know obviously you're transferring risk in that Channel and and where the list the risk lays is really important. And I think that when we start talking about automation and execution we.

Talk about taking risk off the table for all parties. So instead of the whole traditional, we're shifting risk from us to you. But if we can automate some things, we can actually take it off the table for both of us, which I think is a good goal too. That's right. That's right. Because I think specifically around the collaboration portion of it though, right, which is to your point, they're selling whole loans. It's you know, typically a fairly large transaction dump in the beginning and stuff like that. But there's an importance to have that collaboration capability back and forth between yourself and obviously your, your customers, the sellers that are that are selling you the loans, but.

Right. You know, and the reason why I thought, you know, you'd be a great person to talk about because Flagstar has kind of done a ton of stuff to quote UN quote meet their customers where they need to be met right now. What are some of the areas that you guys have kind of focused on to to achieve that? I think there's been, you know, a couple different areas, put some pretty good investment in. So yeah, great plug. You know, we are where you are, you know, I mean when you're doing business with multiple clients, you want to make sure that they're all going to be set up a little bit different, right? They're going to have different.

Business models, they're had different operating models how they generate revenue and so we just want to operate how do they want to operate and we want to be able to make sure that we can our process can fit their process. You know I will say that we have a little bit of an advantage and that you mentioned we operate in all the channels. So we operate in both distributed retail and direct consumer. We operate in wholesale and non delegated correspondent. I think for us being able to operate in all those channels it gives us an understanding of maybe different ways that our.

Clients conduct their business. It helps us maybe understand it from their perspective a little bit better. The first thing we did is a couple years ago we rebuilt our correspondent portal. So we've got now that is really, that is where you go to transact with us and really paid special attention to features like communication and clear collaboration. So when we review alone, we tell them where it's at in the process. We've got the little pizza tracker, if you will, across the top, but then they can dive in and find out where it's at. But then we're posting.

Conditions in a clear manner that they can digest. We're alerting them. You know, we're doing e-mail alerts, we're we're giving them triggers to kind of go look at it and then we're giving them an easy way to get us the information. Obviously, they're going to log in, they're going to import a file with us or if we did a bid, we're going to register that loan and they're just uploading a BLOB. Then you start thinking about the the product that we've built and then we can now look to integrate other areas where it might be beneficial for them. And so we've got PDT which is our paperless document.

Transfer. So there's a process where wherever they live and conduct their business, you know whatever their Los is, there's a way for them to kind of get those documents into our system. Digitally partnered with ICE on the investor Connect product formerly Ellie that we're connected with them so that it's A1 push of the button and they can send us all the data and docks on their transaction future road map. They're looking how we can collaborate to where they never even have to leave the ICE system. So I think that's exciting but knowing what they are looking for from there and.

And helped us really build what we believe is a really great functional collaboration tool that makes doing business with us really easy. Yeah, I think you brought up a really good point, but your customer base is, is I'll use the words multi channel as well, right. You may get, they may they may send you a delegated you know pool of loans in one scenario, right. But it you know correct me if I'm wrong, but I believe that same lender could also send you a non delegated loan, right, just based on a certain product type and so on to have you guys do it same, same customer, different transaction.

Right. But it's you know you're providing those ways to alleviate the friction and consolidate their experiences through kind of you know single points of contact for lack of barely describe it, right. Yeah, I think that's right. So I mean you know we've got obviously sellers that are just mandatory bulk sellers to us and you know we're getting bulk loans. But then you've also got the, you know that client might want to do a best efforts loan, right or they might want to do a non delegated loan, you know maybe it's a non agency loan. And I think that what we really then understand there is you don't want to make them go through.

Completely different process to be able to do business with you in that way. It's like go to the same site, we're going to figure out the transaction that you're talking about is a delegated versus a non delegated and then we're going to OfferUp the tools that you need to do that the loan with us, right. So if it's a non delegated loan, when that user logs into that loan, all of a sudden now they see all these other options that we hide from them if they're delegated because they don't need to see them, right. So it's then again that collaboration is really customization of our technology based on.

They're doing business with us and even down to the transaction level. On this transaction here, you know you need to see all this stuff and on this transaction you need to see this much stuff and you and you're providing them avenues even beyond for those like to your point, you brought up investor connect, right. For those Encompass kind of you're tapping into that Encompass ecosystem and facilitating really a similar type exchange just directly from that I can do it. And then obviously and then for those that are even outside of the portal, you've got PDT. For those those players that want to do it themselves like on their own piece, yeah, it's just it's a fascinating way to kind of look at because I think people get into.

Mindset of I've got to have one channel for one thing, another channel for another thing, right, because they're physically segregated, right. And I think it's important that investors specifically start to look at what's the bigger picture and and really trying to figure out how to meet their customers where they need to be met because that's ultimately what we got. I don't know if you know this off top of your head, but it'd be great to know like the retention efforts that have to come from that to make that experience that much better, It has to be somewhat stickiness that allows you to drive probably a bit more margin out of it as well if I'd guess right in some ways we can't talk about margins I think.

We can talk about though is tie goes to the runner. So if we can run faster and we and we can buy your loan faster, the correspondent still picks up benefit if it's not on their warehouse line for as long. I always look at it as if we can build a better process we're going to win business that way too. I mean when you're managing huge warehouse lines and and you know you got hedges on it's material impact of certainty of who your counterparty is and who you're you're selling to. So building all that into our ecosystem right and so one of the things we're doing in that area too.

Working with you guys on AIQ, making our process behind the scenes more efficient, really those efficiencies, while they're great for us and our bottom line, they're also going to be good for the correspondent in their box. That's right. That's right. I mean everyone benefits kind of like that, that mantra of all ships rise, right. Our old CEO's, you say that all the time, right? Right. Yeah, we can. If we can be better, our customers benefit and vice versa, right. So it's right. But you have to make the investment. You, you've got to make that, you got to make that first step and you got, you got to make the investment and you got to look at it from a much bigger picture than kind of single transaction type stuff. No.

I think it's all, it's all kind of exciting. No, we've got just a couple minutes here, Mark. But I was hoping maybe one other thing like I know Flagstar has been doing a lot of stuff not only just related to basically talk about correspondent, but there's a lot of things that Flagstar is doing to help kind of support the industry. I was maybe touch on that for a minute too. So I think people might be interested in what you guys are up to. Listen, Flagstar is not out here spending $20 billion a year or whatever it is in technology, right. I mean we're still midsize bank and we're in all the mortgage channels, but we're not the biggest in anyone. So we have to be smart.

About the technology that we do, one of the ways we try to take advantage of that is just to, you know, cultivate new technology. We probably said it on other podcasts. If you go back to the days of where AIQ came out of before the acquisition and everything, I mean it was Doc Velocity back in the day. It's how do we really cultivate and and grow technology organically. So one of the things we're doing it we have a Mortgage Tech Accelerator, it's a consortium where we, you know, we've got some cohorts where we're trying to help startup companies that really have a slant toward financial services and mortgage.

Particular to really help them grow and again it can benefit multiple parties. So you know that's just one of the ways we're trying to kind of maximize what our investments are in that space and maybe take a little bit different approach about it rather than just throwing dollars at it is to kind of see like what are these fresh new young ideas in the market and are the things that we can incorporate into our processes and learn from kind of where they're trying to go to benefit all parties. Yeah it's it's one of the things that I think I mean again kind of reminiscing a little bit here but.

From the days, the days of long that's always been kind of flag stars thing to your point you know they've helped cultivate technology that's actually how we the dock velocity grew into this a IQ thing that ice ended up acquiring through the LMA acquisition. So it definitely it definitely leads to again kind of that mantra of all ships rise right now we're all customers now we're all benefiting. We're trying to optimize as much as we can out of the process as well. So but as far as okay, so one one more thing Mark, I got one more thing that then we'll close crystal ball 2021 what.

Happens in this industry in 2021. You. Yeah, you didn't even say that in like our prediscussion. I know what's going to happen. I know. You know what? I have some ideas.

You know for Flagstar, I think that we're really optimistic about 2021 and the fact that we're in an environment where we can, again we operate in all the mortgage channels. You know from a servicing perspective, we service loans, but we're a large subservicer too. So we're, we're boarding subservicing loans to our servicing platform. We've won awards from Fannie Mae for a Star servicer and then you look at our banking side and in particular warehouse that really has great synergies with our mortgage business.

And so like I think we, the way we've got our things structured for us it's just about going out and executing it and making sure that we're leveraging and maximizing all those partnerships that we have. People can say rates are going to be up or rates are going to be down.

During the year, you know we don't care what kind of environment it is as long as we can maximize kind of everything that we have to offer our clients and we think we can do that in any environment. But 8/20/20 one's off to a strong start and the fact that I mean rates are low, you know stimulus might be coming to boost the economy a little bit. I think that lenders are going to have plenty O revise for a while and then you know you still have a pretty robust.

Purchase market, you know we actually saw in the spring market last year, it took a while for it to get going, but then that's spring, summer market that typically ends you know end of Q3. It just kind of kept going. I mean we saw robust purchase activity in Q4 so.

I think it's going to be a great year for the mortgage business and and we're just really excited with some of the things that you know we're going to be trying to offer people. I mean one of the things is on our 2021 road map is E clothes and I know we're already talking to to the folks over ice about that. So ramping up the pilot that we launched last year and and really getting that out to market to again benefit customers and their customers too. Yeah, I think my personal opinion I think there's going to be a lot of investment in not only just E clothes but I think just technology in general for cross lenders they're trying to find ways to to scale.

And optimize, you know the staff that they have. So I think we're we're pretty much on time here Mark. I really appreciate it man. That was a lot of fun. Thanks a lot. It was really good. Hey, I always love talking to you. And then obviously when the weather gets good, you know we're going to have to swing the sticks. We can swing the sticks we can, but looking forward to it. That's right. Same here, Eric, thank you and everybody over it. I appreciate it, Mark. I appreciate it. And for everyone listening, we appreciate you guys taking the time and you have any questions, please, you know go to, visit and we hope to.

That you want another episode? Thanks a lot, guys. See you.


Information contained in this audio was obtained in part from publicly sources and not independently verified. Neither ICE Mortgage Technology nor its affiliates, make any representations or warranties, express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.

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