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» VISIT US ONLINE @ DSNEWS.COM 21 SERVICERS SUFFER FROM DISPARATE TECH Today's mortgage servicers are suffering from overly disparate technology solutions, and those disconnected systems are holding businesses back, according to a recent report by OrangeGrid. e report, titled "Rethinking Your Mortgage Servicing Ecosystem – Responding to Increasing Risks and Costs," claims that the typical technological tools used by a mortgage servicer are out of date, and holding businesses back. is is largely because tech solutions in today's post-crisis, highly regulated industry are product specific, which creates a "complex ecosystem made up of siloed disparate systems." "ese disparate systems created fractured inefficient processes, adding to operational expense and risks since users are now forced to work in multiple systems to complete their work, often times re-keying important information between systems," OrangeGrid reported. "While the introduction of these applications provided a solution to a targeted problem, they created another issue with the lack of transparency and cohesiveness in servicing a residential loan." Out-of-sync technologies also make it hard to serve the millennial homebuyer, who expects a more seamless, digitized solution when purchasing a home. "e legacy systems in use today do not translate to a modern workforce or the growing class of consumers entering into the mortgage market that expects a completely different experience than what is largely available," OrangeGrid reported. e solution, according to OrangeGrid, isn't migrating to an all-encompassing, one-stop shop system. Instead, the report proposes "an overlay platform," which can "sit above the overall system architecture, creating a single truth of process" and offer a "shared status across a chain of events that can deliver an improved user experience, provide greater transparency to loan information across all supporting systems, and can provide solutions for existing gaps in the overall process." is type of solution will "bridge data gaps," according to OrangeGrid, and provide "incremental productivity lift without risk of crippling ability to conduct business as usual." Additionally, it will provide lenders a technological move that's not too intimidating to take on. "Lenders pause when deciding whether to consolidate legacy solutions and migrate to new technology," OrangeGrid reported. "ey see (often after experiencing such trauma before) work, distraction, and cost. By selecting a flexible and configurable software solution, bundled with implementation and operational support by business process practitioners, risks are greatly minimized, cost is controlled, and process mistakes or new business changes will be easy to fix." FIRST-TIME FORECLOSURE STARTS HIT ALL-TIME LOW Both mortgage originations and foreclosures are in freefall, according to the recent Mort- gage Monitor report released by Black Knight Financial Services. Overall originations dropped 34 percent over the first quarter of the year, while foreclosure starts hit a 12-year low of just 52,800. ough purchase loans and refinances took a hit during Q1, refis experienced the steepest drop, falling 45 percent since the end of 2016 and 20 percent over the last year. According to Ben Graboske, EVP of Data & Analytics at Black Knight, this drop in refinances was no surprise. "As expected, the decline was most pro- nounced in the refinance market, which saw a 45 percent decline from Q 4 2016 and were down 20 percent from last year," Graboske said. "ey also made up a smaller share of overall origina- tions than in the past; just 45 percent of total Q1 originations were refinances vs. 54 percent in Q 4 2016." Purchase originations were down 21 percent over the quarter, though up slightly over the year, at 3 percent higher than 2016's numbers. "Purchase lending was up year-over-year, but the 3 percent annual growth is a marked decline from Q 4 2016's 12 percent and marks the slow- est growth rate Black Knight has observed in more than three years—going back to Q 4 2013," Graboske said. "At that point in time, interest rates had risen abruptly— very similarly to what we saw at the end of 2016—and originations slowed considerably. e same dynamic is at work here." ough the decline of both numbers is worri- some, according to Graboske, it's the lower credit scores of borrowers that should have the industry on edge. "Not only are refinances—which generally tend to outperform purchase mortgages—mak- ing up a smaller share of the market, but there's also been a net lowering of average credit scores as well," Graboske said. "e average Q1 2017 refinance credit score was 742, down from 751 in Q 4 2016, and the lowest average credit score since Q 3 2014. Both of these factors could have a dampening factor on mortgage performance, holistically speaking." As for foreclosures, April marked the lowest month on record for first-time foreclosure starts, with just 24,200 for the month. Repeat foreclo- sures also dropped, hitting their lowest point since April 2008. e total delinquency rate for the month was 4.08 percent, with foreclosure pre- sale inventory dropping 3.47 percent. e states with the highest share of delinquent loans were Mississippi, Louisiana, Alabama, West Virginia, and Maine. Percentage of Gen X-ers that believe we are headed for another financial crisis in the next 10 years, an outlook higher by 5 percent than any other generation. Source: FICO Survey: Gen X Continue to Carry Large Debt as "Inevitable Financial Crisis" Looms" STAT INSIGHT 38%

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