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Ellie Mae, Inc. Message Board

  • peter_norths_proctologist peter_norths_proctologist Feb 7, 2013 6:56 AM Flag

    Google this article on ELLI

    Yahoo won't let me post a good article/interview with ELLI executives from 2/5/13, but you can Google the following words to find it. Use only Google search. Yahoo won't work.

    "Bonnie Sinnock, Worse before it Gets Better, Feb 5, 2013"

    The article hints at acquisitions, soon.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Thanks for the article. I was just debating if I should start a position on ELLI.

      Worse Before It Gets Better

      WHAT WE’RE HEARING…from Ellie Mae executives is that the current high cost of compliance is going to get even worse, and as it does it will knock more of the small industry vendors without sufficient financial resources out of the business—or perhaps into acquisitions—fueling growth at larger players.

      “A small vendor really can’t keep up,” Sig Anderman, chief executive of the publicly traded origination technology firm, tells us, noting that his company may use available cash to do some strategic buying in line with the trend.

      If you think compliance costs are bad now, just wait, Ellie Mae chief operating officer Jonathan Corr warns.

      “It’s going to get a lot more difficult,” he says, and he believes the merger of Real Estate Settlement Procedures Act and Truth in Lending Act forms is going to be “the big one” when it comes to new Dodd-Frank requirements coming into play.

      Corr tells us Ellie Mae, which has been in the business for over a decade and has made several acquisitions over that time, has the resources and M&A track record needed to deal with the rising costs. He notes that Ellie Mae has shown it likes to keep management when it can and pay “fair prices.” Anderman tells us the company wants to avoid debt and does not feel it will need to take on any to do so, either. It has at least $100 million in available cash.

      When asked what key challenge Ellie Mae itself faces in this compliance-heavy environment, Corr tells us it will lie in the need to sustain the growth of the firm as a larger company, balancing the need to sustain and expand its current operations and customer base with the need to identify possible new potential sources of growth.

      Key to the compliance challenge and what might determine how well a company like Ellie Mae might be able to generate favorable growth for its shareholders is the idealized goal of automation that can control loan quality—including compliance—in secondary market sales from very early on in the origination process.

      While Ellie Mae executives work on this with some notable big names in the business like Wells Fargo, others like Stonegate Mortgage CEO Jim Cutillo and Stonegate president Dan Bettenberg also tell us they see this as a key goal.

      Cutillo tells us that having a way to, if you will, “perfect an asset record” will be a key strategy at his company. And compliance will be a big part of that, Bettenberg says. Compliance, he tells us, will be “as big as credit and collateral in previous cycles.”

      Bonnie Sinnock is managing editor of National Mortgage News and editor of Origination News. She has been covering the mortgage industry since 1995.

44.31-1.24(-2.72%)Jan 28 4:02 PMEST

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