String. All Rights Reserved
www.stringinfo.com
The information contained in this document is confidential and is intended only for the persons to whom it is delivered by String. Any reproduction, disclosure or distribution of this document, in whole or in part, is strictly prohibited.
Transformative Tech & The Real Estate Landscape
0
String. All Rights Reserved
1
Questions/ Comments During WebinarPlease use the GoToMeeting "Question" feature at the bottom corner of your control panel.
We will be sending out a copy of the presentation to registrants with tomorrow’s follow up email
String. All Rights Reserved
String’s Great WebinarsAll of our great webinars, including the ones listed here, can be found on our website: stringinfo.com
Speakers Presentations Dates
Prashant Kothari How To Maintain Margins & Shorten Cycle Times May 15, 2018
Mitch Kider The Ever-Changing Regulatory Environment May 10, 2018
Ryan Abbe Transformative Tech & The Real Estate Landscape April 26, 2018
Juan Guzman and Sam Kramer
Title M&A In 2018 - What You Need To Know March 27th, 2018
Joe Garrett Top 10 Mistakes Made By Underperforming Lenders & How to Avoid Them March 5th, 2018
Scott Augenbaum Cybersecurity and You February 27th, 2018
Mary Kaye O’Brien Zillow Consumer Insights for Mortgage Lenders February 22nd, 2018
Bill McBride Calculated Risk's Top 10 Questions Of 2018: A New Year Preview January 23rd, 2018
2
String. All Rights Reserved 3
How We Can Help You?
Your Challenges String’s Solution
Huge increase in your cost-to-originate Lower your production costs by 20% or more
You can’t find qualified talent
Highly trained & scalable team
● 650+ resources
● 14+ yrs of experience
Your customers want shorter cycle times
Compress your cycle times with 24 hour operations
We help mortgage & title agents improve margins and shorten cycle times
String. All Rights Reserved
String: What We Offer You (Title Agents)
We perform functions like:▪ Searches and data validation▪ Examinations and report preparation▪ Typing policies and commitments▪ Tax certificates & Municipal Lien Searches▪ HOA verifications▪ Plotted easements
4
String. All Rights Reserved 5
String: Title Insurance Services
Tax Searches
Current/ Regular taxes
Foreclosure taxes
Municipal Lien Searches
MLC
Title Search/ Examination
Current owner search/ O&E
Two owner search
Full search (30/ 40/ 60 years)
Update search
L&V search
AVR search
Easement plotting
Title Typing
Property reports
Title commitments
Title policies
TSG/ PJR
Legal typing
Title QC
Closing Support
Pre & post close review
Document recording
Settlement statement
Document preparation
Scheduling of closing
Escrow support
Title Curative Processing
Payoff processing
Subordination processing
Lien release
Document Recovery
HOA research
Other VMC Services
Broker price opinion
Appraisal report
Flood zone determination
HOA verification/support
Vendor management
Title Plant Building
Historical doc indexing
Go forward indexing
Plat map updates
String. All Rights Reserved
String: What We Offer You (Mortgage Lenders)
We perform functions like:▪ Loan Setup
▪ VOEs, indexing & stacking of documents, clearing conditions
▪ Post-Closing Services▪ Trailing documents, audits, assembly of post
closing loan packages
6
String. All Rights Reserved 7
String’s Residential Mortgage Services
ProcessingSupport
Pre-UnderwritingClosingSupport
Funding Support
Post ClosingSupport
Loan Set-up Assistance
Pre-Underwriting
ReviewPre-Closing Review
Pre-Funding Review
Trailing Documents Retrieval
Order VOE/ Flood/ Title/ Credit report/
Appraisal
Setting-up Conditions
Ordering Documents (Payoff & VOE)
Validate Initial and Final CD
Assemble Post Closing Loan
Package
Documents Indexing and Stacking
Perform Calculation (LTV/CLTV/DTI)
Reviewing of Documents
Ensure all Conditions are Closed
Data Integrity Audit
Review documents and State specific
disclosuresClearing Conditions
Preparation of Closing Package
Fund ValidationIndexing the Loan
Documents
Setting and Clearing Conditions
Post Underwriting Audit
Scheduling Post Funding Audit Post Closing Audit
String. All Rights Reserved
We Take Care Of Your Busy Work For You
All of this work is done:▪ Behind the scenes (invisible to your end-customer)▪ Seamlessly (built into your workflow)
End-result: You have 100% control of▪ Your workflow▪ Your customer experience
8
String. All Rights Reserved 9
Familiar With All Major Technology Platforms
Familiar with all major mortgage platforms
String. All Rights Reserved 10
String: Who We Are
Inception2004
McLean, VAHQ
Title documents processed annually500,000
Hours of experience in mortgage & title space
Mortgage and title transactions processed20 Million+
5 Million
11
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Today’s Presenters
Ryan Abbe is a Managing Director and is head of real estate investment banking at JMP Securities. He serves on the firm’s
investment banking management committee.
Since joining JMP in 2004, Ryan has concentrated on a range of businesses within the real estate industry, including real estate investment trusts, land developers, homebuilders, and real estate-related technology and services companies. Prior to joining JMP, he was a member of the financial institutions group at Piper Jaffray. During his career, he has executed equity and debt capital raising transactions with total proceeds of more than $30 billion and strategic advisory transactions with a total value exceeding $8 billion.
Ryan holds a BA from Macalester College.
Clinton McCoy is a Senior Analyst in the real estate group at JMP Securities. Clinton focuses on execution of mergers &
acquisitions, capital raising, and other strategic advisory for the company’s real estate and related technology and services companies.
Prior to joining JMP in 2017, Clinton was an analyst at Cushman & Wakefield in the Corporate Finance & Investment Banking Group where he assisted in the execution of several real estate advisory, structured finance, and leasing transactions for clients including Blackberry, Goldman Sachs, and the Port Authority of New York & New Jersey.
Clinton graduated magna cum laude with BA and BS from Chapman University.
12
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
AgendaReal Estate Technology Breakdown
Introduction
Industry Overview
Brokerage & Agent Tech
Mortgage Tech
On the Horizon5
4
3
2
1
13
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
JMP Securities Investment Banking
JMP Securities is a leading full-service investment bank that provides investment banking, sales & trading and equity research services to corporate and institutional clients.
• Founded in 1999 by current management
• Publicly traded (NYSE: JMP) since 2007
• Headquartered in San Francisco with offices in New York, Boston, Chicago and Minneapolis
Real Estate• REITs• Property Services• Real Estate Tech• Lodging/Housing• Land Development• Business Services
Healthcare• Biotechnology• Healthcare Facilities• Healthcare IT• Healthcare Services• Medical Devices• Molecular Diagnostics• Specialty Pharma
Equity Capital Markets• IPOs
• Follow-Ons
• Structured Transactions
• 144A / Registered Directs
• At-The-Market Offerings
Debt Capital Markets• High-Yield
• Private Placements
• Preferred / Baby Bonds
• Advisory
Strategic Advisory• M&A / Financial Advisory
• Restructuring / Recapitalization
• Fairness Opinions
• Private Placements
Services ClientsOverview
Technology• Cloud Computing• Communications Tech• Internet & Digital Media• Cybersecurity• Mobile• Software• Wireless Technologies
Financial Services• Asset Managers• Commercial Finance• Consumer Finance• Fin. Processing &
Outsourcing• Insurance• Investment Banks &
Brokers• Specialty & Mortgage
Finance
14
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
JMP Securities Broad Real Estate ExpertiseDiversified Experience Across the Entire Real Estate Spectrum
MERGERS & ACQUISITIONS
STRATEGIC ADVISORY
CAPITALRAISING
Commercial
Healthcare
Hospitality & Lodging Land Development
Technology & Services
Residential
15
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
JMP Securities Real Estate Tech & Services PracticeJMP has significant experience advising real estate and mortgage-related tech and services companies
$250,000,000Sale to
Exclusive Sellside Advisor
Exclusive Financial Advisor to the Board of Directors
$725.0 million Merger with NNN Realty
Advisors
Acquired by
Financial Advisor to Allonhill
$323,438,000Follow-On Offering
$473,715,000Follow-On Offering
$82,800,000Initial Public Offering
Lead Manager
$482,800,000Follow-On Offering
$60,637,011Follow-On Offering
Co-Bookrunner
Sale to
Exclusive Sellside Advisor
Sale to
Exclusive Sellside Advisor
$317,000,000Follow-On Offering
Financial Advisor on the Sale of a division to
Actimize
Majority Investment from
Financial Advisor to Lender Live
Acquired by
SellSide Advisor
Acquisition of
Exclusive Buyside Advisor
$300,000,000Follow-On Offering
$35,000,000Private PlacementFinancial Advisor
$65,000,000Private PlacementFinancial Advisor
$1,771,000,000Initial Public Offering
$345,000,000Convertible Senior Notes
Has been acquired by
Sellside Advisor
SellSide Advisor
Has been acquired by
$135,300,000Initial Public Offering
Significant investment from
Exclusive Sellside Advisor
Majority Stake Sale to
$744,000,000Exclusive Sellside Advisor
$543,000,000Initial Public Offering
Pending
$146,625,000Initial Public Offering
$862,500,000Follow-On Offering
Sale to
Exclusive Sellside Advisor
$253,000,000Initial Public Offering
Industry Overview In the News
Brief History of the Industry
17
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Real Estate Technology in the NewsReal Estate Tech is Clearly Attracting Attention in Recent Years
18
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Residential Real Estate Technology in the NewsCapital Raises
“Blend Raises $100 Million in Series D Funding Led by Greylock Partners”
“HouseCanary Announces $31 Million Series B Funding”
“Compass Attracts $450 Million Investment from the SoftBank Vision Fund”
“Fifth Wall Leads $135 Million Investment With Lennar in
Opendoor”
19
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Residential Real Estate Technology in the NewsMergers and Acquisitions
20
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Real Estate Technology: A Brief TimelineResidential real estate technology has developed tremendously since the 1990s
Tremendous growth in the real estate market, fueled by increased mortgage availability, spills over into real estate tech innovation leading to increased adoption among brokerages and other transaction related companies.
Growth of large brokerage franchises such as RE/MAX, HFS / Cendant, Coldwell Banker, and Century 21 creates demand for platform solutions. These firms begin to develop internal technology solutions for their agents.
2000-2008Boom & Bust
1990sIn the Beginning…
1990-1995HomeStore (now Move.com) begins working with NAR to host and manage listings.
1996Agreement between NAR and Realtor.com signed.
1999Homestore (Move.com) goes public.
2000Direct to consumer innovation via the internet, LendingTree goes public
2002 NAR formalizes IDX rules and standards for the sharing of listing info to all MLS participants. Brokerages begin to seek more robust technology tools to share and display listing data.
2003Large diversified real estate firms (Fidelity, First American, Cendant, etc) begin funding and acquiring real estate tech companies .
2006 Zillow is founded to provide consumers with real estate information and data.
2008 LPS is spun out from FNF. Housing bubble bursts and the financial crisis is triggered.
21
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Real Estate Technology: A Brief TimelineResidential real estate technology has developed tremendously since the 1990s
2009-2015Competition Heats Up
2016-PresentDisruption
Proliferation of third-party technology providers leads to increased competition and product innovation.
Real estate tech becomes a focal point of the larger technology landscape as disruptors enter the market and entirely new sub-industries are formed.
2009Technology solutions for default servicing emerge (REO asset management, etc). New, single-function, agent-focused technology solutions begin to emerge
2010 CoreLogic is spun out from First American
2011Ellie Mae goes public; Zillow goes public, announces 24 million unique visitors, representing 100% year-over-year growth
2011-2013Disruptors starting to emerge – LoanDepot, Opendoor founded
2016Technology solutions begin to emerge in other parts of residential real estate (mortgage, title appraisal, etc.) and raise significant venture capital
2017Larger, later-stage capital rounds for the most well-positioned companies. Redfin goes public
2018IPOs (DocuSign), and even larger private capital raises
22
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Why are we seeing such an increase in real estate tech solutions?Why hasn’t this happened sooner?
• In general, residential real estate has historically been slow to adapt to new technology solutions because the consumer hasn’t been demanding it
‒ The average homeowner only transacts once every 7 or 8 years
‒ Homeownership percentage is only 64.2%, versus the high watermark of 69.2% in 2004
‒ Average homeowner tenure is at a historical high of 10 years as of the end of 2017
• Many industry incumbents benefit from the status quo
Why now?
• The time it takes to buy a home and the related costs associated with the transaction are ripe for technology innovation
‒ 40+ days to close a mortgage loan
‒ Buyer closing costs in the multiple thousands of dollars (up to 7% of the home price, according to realtor.com)
‒ Seller pays 5-6% realtor commissions
• Rising costs for industry participants are driving a need for industry technology solutions
‒ Per the MBA, the cost to originate a mortgage is $8,500, and it still takes 40 days!
• Enormous amount of dry powder for venture capital and private equity firms
Sources: National Association of Realtors, Federal Reserve Bank of St. Louis, realtor.com
Innovation BreakdownBroker & Agent Tech
Mortgage Tech
Transaction Tech
Broker & Agent Tech
25
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Tech EnablersSolutions created to innovate within the industry
These are the original categories of residential real estate tech. They are guiding real estate agents into the digital age and arming buyers & sellers with the tools to become savvy consumers.
CRM Systems / Lead Management
Transaction Management
Data & Analytics
Virtual Tour / AR & VR
c
c
c
c
Brokerage & Agent TechDigital Marketing/ Websitesc
26
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Market Landscape
CRM Systems / Lead Management
Transaction Management
Data & Analytics
Media / Digital Marketing / Websites
Virtual Tour / AR & VR
c c
c
c c
27
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Recent Transaction Activity
October 2017
has acquired
October 2017
has acquired
October 2016
Significant investment from
July 2017
has acquired
August 2016
has acquired
October 2017
$31 million Series B funding from
$64 million raised to date
March 2017
$50 million Series D funding from
$104 million raised to date
September 2014
$20 million Late Stage funding from
$20 million raised to date
28
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
DisruptorsDesigned to upend the traditional model
These groups are changing the game. They are built on the premise that the traditional brokerage model is inefficient and ripe for reconfiguration, automation, or replacement.
iBuyers
Discount Brokerage
Other Industry Disruptors
c
c
c
Brokerage & Agent Tech
29
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
c
cc
Market Landscape
iBuyers
Other Industry Disruptors
Discount Brokerage
30
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Recent Transaction Activity
July 2017
$138 million Initial Public Offering
+51% price appreciation since IPO
March 2018
$200 million pending funding at $2 billion valuation
Over $320 million raised since 2014
November 2017
Strategic partnership with
August 2016
$100 million 2nd round funding from
Takeshi Sekiguchi
March 2018
$170 million PIPE
$260 million Growth Capital funding from
LL FUNDS LLC
January 2017
December 2017
$450 million Series E funding from
$713 million raised to date
Q&A
Mortgage Tech
33
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Tech EnablersSolutions created to innovate within the industry
Technology solutions for the mortgage industry have historically been centered around a few large incumbents, but recently we are seeing new entrants to the market.
Point of Sale Solutions
Mortgage Marketplace / Lead Gen
CRM / Lead Management Solutions
Loan Origination / Pricing Systems
Mortgage Tech
c
c
c
34
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
c
c
Point of Sale Solutions Mortgage Marketplace / Lead Gen
Mortgage Tech Market Landscape
Loan Origination / Pricing Systems CRM / Lead Management Solutions
35
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Recent Transaction Activity
March 2018
$17 million Series D1 funding from
August 2017
$100 million Series D funding from
October 2016
Growth funding from
October 2017
has acquired
February 2018
has acquired the Lending Solutions business of
for $395 million
November 2017
$1.44 billion acquisition by
$184 million raised to date
November 2017
$20 million Series B funding from
$25 million raised to date
for $128 million
July 2016
Significant investment from
$350 million
36
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Disruptors Designed to upend the traditional model
New entrants looking to unseat the industry incumbents
Digital Mortgage Originators
Online / Marketplace Lenders
Mortgage Tech
c
c
37
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Mortgage Disruptor Market Landscape
c
Online / Marketplace Lenders
c
Digital Mortgage Originators
38
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Recent Transaction Activity
April 2017
$5.25 million Series A funding from
Undisclosed investors
$11.4 million raised to date
October 2017
Early stage funding from
Over $55 million raised to date
November 2017
has acquired
For $155 million
March 2017
$500 million Series G funding from
$1.92 billion raised to date
January 2010
Development funding from
$72 million raised to date
On the Horizon
40
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
On the HorizonAs we have reviewed in this webinar, there is still significant innovation that needs to come to the residential real estate industry
• The companies we have spoken about today are on the front lines of this innovation, but they are still focused on the upfront work to get the industry appropriately positioned
‒ Efficient customer interactions, better data, leveraging data, efficient processes, transaction collaboration, digital mortgage and transaction documents, etc. are all examples of the front-end innovation these companies are currently focused on
• Many of the buzzwords you hear around technology innovation (AI, machine learning, even blockchain) require the groundwork that the current tech innovators are laying in order to be actionable
‒ We are in the early innings of tech innovation, and AI and blockchain only start to become relevant after the 7th inning stretch
• Many companies are starting to explore using machine learning to improve processes and decision-making
‒ We are seeing this in almost all of the categories we discussed today
• Blockchain has the potential to make a major impact on the residential real estate industry, but we are still many years away
‒ Talked about a lot
‒ Experimented with for certain business functions
‒ Ultimately will need the buy-in of all the constituents in a real estate transaction process, and that will take awhile
41
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
On the HorizonThe next wave of innovation
These are the areas of emerging technology with the highest potential to become tomorrow’s game-changers.
42
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Other Areas in Residential Real Estate Ripe for Technology and DisruptionReal Estate Innovation Breakdown
Appraisal Management
Transaction Portal
Title Insurance Blockchain
Loan fulfillment
Capital Markets / Securitizations
Loan Servicing
43
4092
146
28169108
153204
0
255192
0
1825118
266095
128174222
94129164
61140222
4092
146
670
134
Recent Transaction Activity
October 2017
$31 million Series B funding from
$64 million raised to date
April 2018
has acquired
March 2018
$33 million Series B funding from
$40 million raised to date
August 2017
has acquired
March 2018
has acquired
January 2018
has acquired
April 2017
$8 million Series A funding from
$10 million raised to date
Marta Drobyn, Escrow CloserWFG National Title Company
San Francisco
600 Montgomery Street
San Francisco, CA 94111
(415) 835-8900
New York
450 Park Avenue
New York, NY 10022
(212) 906-3500
Boston
265 Franklin Street
Boston, MA 02110
(617) 235-8500
Chicago
190 South LaSalle Street
Chicago, IL 60603
(312) 768-1790
Minneapolis
100 South 5th Street
Minneapolis, MN 55402
(612) 605-6278
