Feedback from
Peter Barnard
Some very interesting thinking yesterday. Thanks for including me. Just some top of mind this am.
Pro’s (in descending order for me):
- state of the art, end to end, paperless mortgage from lead to close to post close. To my mind, this is the most critical pro. Esp for the small to mid sized CUs who need to put a more competitive product out there.
- Take care of our own; instead of going outside the industry/movement, we are big enough to pull off our own big things. Keep the money inside the cooperative.
- Operating efficiency for CU processes and across the geographically dispersed network.
- We have reference points of success in this – eOriginal and MERS. As Vic points out, we also likely have a number of other industries experience we could / should draw from – Vic mentioned commodities. What is innovation for CUs, already is in place outside of CUs. This gives us a potential playbook.
- This is a huge market. If done right, could be a critical piece inside of CUs market done by cooperative.
- eDoc already has pieces of this on the ground. And a long history of secure, high avail images.
- It may be the future requirement of liquidity providers – eNote, eVault.
Con’s:
- eOriginal is way out front. The pro of a referenceable model out there is also a con. They raised $26m in 2016. They have partnered with at least 13 point solution vendors to create the end-to-end paperless mortage. Hard to envision catching them.
- Crawl, walk run may be day late, dollar short.
- Could be expensive to get into this market.
- Missing information about potential business models; would be good to have a SWAG at some numbers for the P&L. Absent that, I struggle to put a value on the opportunity and, hence, what the cost of build might need to be..
Questions that occur to me:
- BusDev: To get to the end-to-end eNote / electronic mortgage, seems eOriginal strategy was to build a base product (“Digital Mortgage Platform”), then partner for all the key “skills” or technologies needed to complete the process. Is it worth or have we done some exploratory conversations with firms like (e.g.) eNotaries or any of the other main pieces? eOriginal provides the framework, stitches together the other parts and boom.
- Market Size: I get the extrapolation of the market size today; 65% of loan volume in DTM. That number seems high as a predictor of paperless mortgage (one of the BHAGs in end state). Could we do a bit more on sizing the market?
- Build from Front End: Sofi put a ton of loans on the books even in just the first two years. Jon Jeffries of Callahan did some research. If memory serves, Sofi didn’t win because of great rates or even fancy back office systems. The won because they were cool looking and frictionless on the front end human experience (that may be my conclusion, not Jon’s. Don’t have my notes here.) The broader point is… could we spend more time understanding the consumer experience? And build back to “what is everything we need to do end to end?”
- RocketMortgage: Can we get any kind of volume metric on how this market is building for Quicken?
- Are there any large CUs that are working with eOriginal? Navy? Other? Would be great to get a bit more inside the story; see what is there.
- I agree that we are all very very very small as compared to the very large. However, I have found that, if we articulate the full scope of the CU system, even the bigger vendors see value as long as we can provide them a point of aggregation. Not easy at all. And may hit more No’s than Yes’s. But possible I think. The network approach seems perfect. Start with several of the larger networks (Vizo, CU*ANSWERS, eDoc, etc) as the place to get started. But sell the other vendors on the totality of the CU footprint. “Million consumers” and the like. This assumes that your vision is to be the eVault, eNote network for the whole CU system???