00:06I'm Allison LaForgia, Managing Editor of HousingWire's Content Studio, and today for this
00:11episode of 10 Minute Talks, I'm sitting with Julian from The Basis Point. Julian, thank you
00:16so much for sitting with me today. Hey, it's good to sit and be with you face-to-face. I
00:20know. We're
00:20usually on screen together. Yes, we're usually on screen together. Julian's usually my on-screen
00:25co-star who talks all things tech and trends in the industry. So I'm excited to talk to you
00:31a little bit about the two big servicing deals that we've had so far in 2026. Let's start with
00:37Sendlar and PennyMac. Break that down for me. Yep. All right. Well, first, the punchline,
00:43$1.47 trillion is what that deal brings the total servicing to. So they will then become one of the
00:53top three servicers. PennyMac will with Sendlar. But the other thing that people forget is that
01:00they are also in the top three originators of the country with $143 billion. So they're just
01:08as formidable as they could be with this deal. And it is a big statement after the consolidation that
01:15we saw last year with, of course, Rocket, PennyMac, Guild, Bayview. But now Penny is up at the top.
01:21People don't sometimes remember how big they are because Rocket does so much household name
01:30advertising, if you will. But for anyone watching the Olympics, I was going to say for anyone watching
01:36the Olympics, PennyMac is the official mortgage sponsor, not just for Cortina, but for LA for the
01:42summer games two years from now. So this deal officially, I think, puts them on the map, even
01:47in the minds of the consumer, not just our industry. Now we also have NuRes changing their system of
01:53record to Valon. So what does that mean? Yeah. So let me, let me just do one more thing on
01:59Sendlar
01:59and PennyMac too, just if I could, and then I'll come to NuRes and Valon. They are at 1.47
02:06trillion
02:06combined. 47% of that is owned servicing, meaning that PennyMac is directly servicing that. It's the stuff
02:16that they have that they're working with consumers directly. The reason for the Sendlar deal is
02:21subservicing. It adds a hundred subservicing clients right out of the gate, which means that Penny is now
02:28infrastructure for the rest of the servicers out there in the industry, including the originators
02:33who are like, we're good at originating. We need a good partner for servicing. And so this brings that
02:37to the broader industry. I just wanted to make that one other point. That's an important thing to note.
02:41Yeah. Now shifting to NuRes and Valon. So a couple of interesting notes there. First of all,
02:48again, NuRes is, I had to pull the stat to make sure that I've got it right. They are the
02:53fourth
02:54largest servicer with 852 billion and the fourth largest originator was 64 billion, right? So again,
03:02people forget that just because they're not a household name per se, they're a monster.
03:07Um, so this is a landmark FinTech deal in that way. Now Valon is Andreessen Horowitz backed,
03:15uh, Tim Mayopolis is on their board, the former head of Fannie Mae and Blend, right? And so what
03:20they've been doing is for the last seven years, quietly building this FinTech system. And so how do
03:27you build a, a servicing system of record without all the servicing assets? You know, you got to get
03:34customers, it's chicken and egg stuff. So what did they do? They became a subservicer. What a lot of
03:40people don't know is that they actually accumulate 127 billion in subservicing to basically build their
03:48stack. And to be clear, they're a FinTech, they're selling software to the industry, but they had to
03:54get a loan book to be credible, to build the software. So that's what they've been doing for
03:59seven years. And this deal is the deal that basically brings them out as a FinTech bonafide
04:07day one with the fourth largest servicer in America. And, uh, actually here at MBA servicing,
04:14we're doing a panel on a moderator panel with the two of them so that they can lay it out.
04:18But if I can just say what it means for the industry, that's what it means for them.
04:23But for the industry, it just means more options, again, in the system of record category. And then
04:29of course, you've got all the rest, which are also very formidable. There's a lot of cool stuff going
04:33on with systems of record with Sageant, with Raniere, uh, with Willow for small to medium size
04:39firms. Vertex is another new player. And then of course, you can never forget both Dark Matter and
04:43ICE, right? Who are, who, um, still have a lot of the market share out there. So the system of
04:49record
04:49space with this Valen deal gets very, very interesting now. Now the basis point studies
04:56the whole landscape across origination, servicing, and on the servicing side, you just mentioned it
05:02briefly. There are a lot of smaller systems beyond the systems records that you just highlighted. And
05:08you touched on a lot of them, some of them there. Um, you are talking to some of them in
05:14your MBA tech
05:15showcase today. Can you give us some highlights? Yeah. So we've got a total of 10 here at this
05:20show where we're doing it. And there are some systems of record, including the ones that I just
05:24mentioned, the systems of record. But what's really cool about servicing right now is that servicing
05:29is, is 14.7 trillion outstanding. Granted origination is still giant at 2 trillion a year, but with 14.7
05:36trillion outstanding, it does require a lot of software to, uh, do all the nuanced things that
05:41happen across core consumer and default servicing. So coming down a level from the systems of record
05:48of the 10 that we're doing, we're doing some systems of record, but we're also doing some
05:53other ones. I wanted to highlight just a couple as an example. I mentioned Vertex.
05:56They're a, they're a, a startup system of record. And I always love seeing new players be really
06:02ambitious and come and tackle a huge problem like that. But they also, what they're going to demo
06:06here at MBA servicing is some really specific granular AI powered retention. Retention is
06:12obviously the biggest deal. I think this year, because the trigger lead legislation becomes
06:19effective in March. Uh, and so servicers are in, in the good seat with respect to that. So this type
06:27of tech being able to up those, uh, retentions is great. Um, service bot is another one that we're
06:33excited about, um, showcasing because what they're doing with their AI is you're the human and I'm
06:40the robot and the robot will do most of the work when people are calling in, whether they have
06:45problems with like they're having hardships or they, they want to do a new loan or something like
06:50that. But the keywords that I hear as the AI will get me to flag you, the human, which is
06:59really,
06:59really cool. So that, you know, we talk about human in the loop all the time. The service bot stuff
07:04really has it operationalized and it's not just message points. Um, and I'll just do two more
07:09quick ones as examples. Um, OSG is doing interactive escrow statements. I think this is a critical,
07:16important issue because again, one of the biggest things that trips up call centers is my tax insurance
07:22change. I don't know what to do. And that's the biggest cost. One of the biggest costs in servicing.
07:28And this basically uses AI to let the borrower figure it out themselves with their profile.
07:34Why'd my taxes change? Why'd my insurance change down to the penny? And then lastly, azimuth,
07:40um, when we are receiving regulations, basically via tweet in this era, what azimuth does is real
07:46time assimilates all regulatory change coming out of Washington into all of the systems of record
07:53so that as things change in real time with respect to servicing policy, you never miss a beat on
07:59compliance because it's in your system day one of new regs becoming effective. That's amazing. It's a
08:04huge deal. Yeah. That's amazing. So Julian, to wrap up this episode today, we have another fun,
08:12exciting project coming up the basis point and is joining housing wire at the gathering. And as a
08:21preview, what other tech themes are you seeing right now that you think the housing wire audience should
08:28be paying attention to? Yeah. So housing stack live is this brand that we co-created together,
08:35the basis point and housing wire to make sure that the FinTech community's message is heard and that
08:42the granular components of some of what I just talked about for all the companies on the biggest
08:47stage in housing get to be heard clearly. So we're honored and grateful to be a partner with you on
08:54that. And thematic wise, when we host those demos on your stage, we do these big themes. I wanted to
08:59read
09:00off a couple that I'm working on, but April in the AI era is a long way away. So I
09:04might
09:04revise these later, but I've got default servicing per loan costs, originations and servicing integration
09:12and not everything has to be at scale. So I'll touch those really, really quickly. So on
09:17on default servicing, the delinquency rate for all loans right now is 3.99%, but FHA is 10.78%.
09:23So default is going to become of that 14.7 trillion outstanding, a bigger deal, especially as
09:31if AI really disrupts the job market materially, we can expect a lot more hardships, etc. So that's a
09:37core theme I think that's going to hold up for the year. Another one, the ROI phase of FinTech,
09:42we talk about loan costs all the time, origination side is 11,000. The non-performing, the default side
09:48is $1,700 per loan. Modernization was phase one of the FinTech era. The basis point believes that phase
09:57two that AI brings is the ROI era, actually moving those costs down. We've gotten efficiencies,
10:04we've gone from paper to digital, but we haven't moved the cost down yet. So that's what this year
10:08hopefully is about. And then lastly, we talked about it already, but originations and servicing
10:13integration overall, the continuous origination servicing loop has everything to do with tech,
10:21right? So that's something that we're going to be highlighting on your stage with some of the
10:25companies that we have so far. I don't want to spoil too many, but I'll name a couple. Tavant,
10:31Dark Matter, Infrared, there's going to be a handful of others that we're going to be talking
10:36about these use cases. So we're very excited about it. Well, I'm very excited to hear you go over the
10:41use cases because highlighting some of those capabilities and the granular things that these
10:46tech companies are able to accomplish and how that helps your business, I think is something that
10:51sometimes gets missed in these demos and is something that is of critical importance for
10:56the people who are listening.
10:57For sure. And that's why, again, we're so honored and grateful to be able to do it on the big
11:01stages
11:02like yours so that we get to really help people understand the real progress. What I always say,
11:07I'll close with this, is that if you think you know these companies, we're inviting everyone to
11:14come take a look on your stage in April because they're making progress so fast. If you think you
11:19know, you haven't seen what they're up to lately. Well, Julian, thank you so much for joining me
11:24on this episode of 10 Minute Talks and I'll see you in April. Absolutely.
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