Reprinted with permission from MBA NewsLink, August 26th edition.
By Mike Sorohan, Editor of MBA NewsLink.
MBA NewsLink recently sat down with Jennifer Miller, executive vice president of products for a la mode, Salt Lake City, Utah*. Miller is in charge of the company’s Mortgage Solutions division, including the company’s Mercury Network, a vendor management platform for the mortgage lending industry. For more information, visit www.MercuryVMP.com.
Prior to joining a la mode*, Miller was executive vice president of special projects where she focused on business to business integrations. She has been a key participant for more than seven years in the MISMO XML data standard specific to valuation data.
MBA NEWSLINK: It seems like every week brings another merger or acquisition of technology vendors; yet a la mode has had the same ownership for the past 25 years. What are that advantages to that kind of stability and consistency?
JENNIFER MILLER: A lot of people are surprised to find that we still have a single shareholder and founder after all these years, and yet we’re as large as we are, with nearly 200 employees. But the reasons are intertwined with the fact that we’re an extremely high cash flow company, even with our massive investments in development, and we have zero debt. When you can take the long term view like a founder can, and you have cash with no debt hanging over your head, you can take advantage of opportunities that your competitors can’t. Our clients see the effects of that every day.
Our stability is also critical in our core market, which is the appraisal-to-client connection. We’re the largest vendor in that segment by far, with more than 50 percent of all appraisers using our software, and millions of transactions a year flowing through our Mercury Network as they interact with financial clients. We got that large because appraisers trust us to “do the right thing”, and they’re a prickly bunch. We’ve seen M&A activity in our sector that wiped out shareholder value because they assumed appraisers would just follow along. They don’t.
The bottom line is that our longevity and size allow us to serve the lender and AMC community while still closely guarding the trust that appraisers place in us. That trust isn’t built overnight, but it can be broken in minutes. Younger technology companies don’t know that, or are arrogant enough to think they’re above it. It’s no surprise that they continually crash and burn in this sector, and they damage their clients in the process.
NEWSLINK: Is there a danger that trends and technology can pass the company by? What does the company do to stay “fresh?”
MILLER: I think that’s a danger for any company, whether they’re brand new or a quarter century old like us. But there are a couple of key factors embedded deep in our culture which I believe keep us from losing that edge.
First, we’re fundamentally geeks and always have been. Our executives are almost exclusively tech centric. Our middle managers are even more so, and even our marketers and salespeople are nerdy. That’s a badge of honor around here. It’s part of why we were the first valuation tech vendor with TCP/IP transmission in our software, why we were the first with web-based appraisal vendor management, the first with XML as the core dataset, the first with iPhone, iPad and Android tools--and really robust ones to boot--and so on. Browse our web site and it would be impossible to not draw the conclusion that we stick our nerdy little noses into everything that comes along.
Second, our culture blends intense self-criticism with a genuine “talk to the customer constantly” mindset. We wake up every morning thinking we’re wrong, that we may be missing something, and we’re internally very blunt about what we see as risks or failures. You can’t have thin skin and work here. But then we enhance that by engaging with customers every day, and not in a digital sense. We talk to them, on the phones, thousands of times a day.
A lot of companies hide behind web sites and emails and you can barely even find a phone number for them. We do the opposite, because we want our clients to be able to get on a call with a product manager or executive on a moment’s notice and tell them what they’re thinking. The information from those calls makes its way very organically into the company and the products. With more than 100,000 people using our products, we hear about everything out there, no matter how arcane.
That level of interaction keeps you on your toes, and new things don’t pass you by as a result. It’s a lot of fun. This place is never, ever boring.
NEWSLINK: Have MISMO data standards added clarity to your processes?
MILLER: I’m not sure I’ve ever seen “MISMO” and “clarity” used in the same sentence, but I guess there’s a first time for everything. I’m just kidding around of course, but I do think that it’s important to realize that “opportunity” is a more likely term to associate with MISMO than clarity.
Remember, MISMO standards are by definition laborious, slow and committee-driven, but they have to serve a fast-moving market and technology space. There’s almost never a time when anyone really working with the latest standard feels “satisfied” with what we have, because it’s always a step behind what the end users are demanding--and end users, both externally and internally, think that the word “MISMO” means every bit of data they want is available all the time. So there’s a clarity disconnect there quite often.
That being said, I think end users will find enormous clarity in their analysis of mortgage data, as the MISMO standards evolve and as real solutions dependent on it are deployed. Right now MISMO applications are just dipping their toes in the water. But the water is warm and more people are diving in. It’ll get better, absolutely.
NEWSLINK: How can lenders and servicers better prepare for the wave of compliance issues projected to result from Dodd-Frank?
MILLER: In our arena, the appraisal and BPO valuation sector, there have been ongoing compliance changes starting well before Dodd-Frank, such as the HVCC and the Interagency Rules. So, the conversations we have with lenders and management companies who use our products center on going above and beyond just Dodd-Frank, because “more is around the corner” anyway.
By that I mean that lenders, servicers and management companies need to rise above the compliance fog down on the ground and look at what makes business sense from a high-level view. In the valuation arena, whether it’s BPOs or appraisals or AVMs, there’s not a lot in Dodd-Frank that wouldn’t already have been addressed by a really comprehensive valuation strategy anyway. In other words, many clients don’t have a compliance problem, they have a workflow problem. The workflow in valuation, if properly designed, accommodates Dodd-Frank easily, as a subset of a well-designed process based on best practices learned from valuation workflow experts.
So, the bottom line is to engage real subject matter experts and don’t just shoot for short-term compliance. Compliance is a moving target, but quality valuation management isn’t. Focus on the latter and the former will take care of itself.
NEWSLINK: What do you see as the next technology trend?
MILLER: I think the mortgage sector may be taken by surprise by the trend toward mobility--in everything. Some institutions assume today that “mobile” in the mortgage sector is for agents and appraisers--basically just anyone “in the field.” And indeed, they do lead the way. Our agents and appraisers have been using our DaVinci products on iPhones, iPads and Android devices for several years now.
But for the employees working in financial institutions at a desk, it’s also happening. In their daily lives, their phones and tablets are becoming their default computers. They will expect that at work too. In fact, many already use iPads to check and respond to mail even when they’re sitting right in front of a desktop PC or laptop. Why? They like it, they’re fast at it and they can have it with them as they walk around.
Vendors see it. Hardware and operating systems are converging to the point that there won’t be a difference between a Mac and an iPad, for example. There will be one dockable, ultra-portable device and employees will expect to be able to work with it in portable mode. Most software today however isn’t designed for that, from either a data or an interface standpoint. For example, an LOS may be using a GUI and on the web, but you’d be laughed at for putting that on an iPad. And it wouldn’t work. It’s like the DOS-to-Windows transition. It’s not a job where you just “port” a solution to the new device. And using a web browser on an iPad isn’t what they need, either. The change will be chaotic, but the early embracers will win in the long run--both the tech vendors and the clients.
It’s a brave new world. You don’t think Google paid $12.5 billion for Motorola just so people could make phone calls and search for pizza at the same time, do you? They know the tablet/wi-fi/cellular data device will morph into the next generation of workhorse, driven by individuals and then pushed kicking and screaming into the enterprise. Institutions in the mortgage space will be part of that whether they like it or not.
*a la mode's headquarters is located in Oklahoma City, Oklahoma. Prior to current position as EVP of Products, Jennifer was with a la mode as EVP of Special Projects. This story can be found on MBA's website here: http://www.mortgagebankers.org/tools/FullStory.aspx?ArticleId=25263#full