PERSON OF THE WEEK: Wil Armstrong is in a unique position to consider the state of mortgage banking technology, because he works on both sides of the equation. Armstrong is chairman of Greenwood, Colo.-based Cherry Creek Mortgage and vice chairman of Colorado Community Bank, a $500 million-asset institution in Yuma, Colo. He is also CEO of Blueberry Systems, a Greenwood, Colo.-based company that provides software solutions, services and consulting to financial services companies. MortgageOrb spoke with Armstrong on his view of how technology is shaping today's mortgage banking industry.
Q: How would you characterize the mortgage banking industry's approach to technology?
Armstrong: When I first got into the business in the early 1990s, workflow was kind of a four-letter word. Nobody was particularly interested in the process, and the idea of service-based workflow was something most people did not want to hear about. That has changed over the past few years. Today, with the onslaught of regulations – more than 160 new rules have to be promulgated out of the Dodd-Frank Act that will directly impact the industry – it seems the paradigm switched. It is no longer a four-letter word, but a six-letter word: needed.
Q: Does that mean that the industry has actively embraced the latest cutting-edge technology?
Armstrong: A lot of companies are still using pre-Y2K technology, and there's nothing wrong with that if it is solving the business problem at hand. However, the market meltdown and today's new world of mortgage banking call for new approaches to solving those business problems.
It is not about the technology – and I say that as the CEO of a technology company. It is about whether the technology solves a problem that I have running a mortgage banking firm. Anything you do in deploying technology has to come back to the return on investment.
Q: You work on both sides of the proverbial fence. Which shapes your view: Do you look at technology as a lender, or do you view lending through IT eyes?
Armstrong: I see myself as a banker. For a long time, I subscribed to the idea that the American dream of homeownership, while not for everybody, was foundational to the American way of life. I've been skeptical of the government's involvement in that through the years, but nonetheless, I felt it was a noble and worthy cause to help people with the American dream.
I spend almost all of my time at Blueberry Systems, but my background and thinking is as an entrepreneur and as a mortgage banker. This shapes the way we try to run our company and the solutions we provide. I am not thinking about the bits and the bytes and how cool or flashy something is – I am concerned about whether it lowers the customers' costs per loan or improves the effectiveness of their employees. That's what I'm really interested in.
Q: What do you see as the near-term future of mortgage banking?
Armstrong: We're going through a really interesting change right now. A lot of smaller and midsize independent mortgage bankers are looking to keep more servicing. Executions have changed, and fewer aggregators are buying servicing.
The economics of keeping servicing are ultimately changing, so that if you sell your servicing, you are really giving it away for free. As a result, more independent mortgage bankers are looking at keeping servicing.
The onslaught of regulation creates its own set of headaches, but it also creates its own set of great opportunities. If you are required to disclose and redisclose and redisclose again to consumers, then it is a great time to educate your customers.
Ultimately, I am bullish on the industry today. We've gone through the craziness and excesses that too many people were a part of – and while there are a lot of macro factors that make me cautiously optimistic, I am a born optimist and believe this will continue to be the great industry it has been in years past.