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Veros Names Heather Zeller Vice President OF Marketing

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Zeller will lead brand management and drive company growth In support of Veros Real Estate Solutions (Veros®) goal to strengthen brand awareness and further penetrate the financial services and real estate markets by offering innovative enterprise risk management and property valuation services, the company has announced hiring Heather Zeller as its Vice President of Marketing. Zeller has over 25 years of experience in marketing management, product marketing, and corporate strategy in the financial services, real estate, and fintech industries. In her new role, Zeller will lead the marketing and communications teams to position Veros and sister company Valligent as thought leaders and go-to resources for property valuations, risk management solutions, and insightful housing industry data and forecasts. In late 2022, Veros Software, the parent company of Veros Real Estate Solutions, acquired Valligent, a market-leading appraisal management company. Valligent offers cutting-edge solutions for property valuation. The combination of Veros Real Estate Solutions and Valligent positions the entities to provide innovative collateral valuations to a broader market that Zeller will be instrumental in helping reach. Before joining Veros, Zeller was the Product Marketing Director at Clear Capital, a real estate valuation and technology solutions provider. She was key in implementing effective B2B go-to-market plans, product positioning, and demand generation strategies that helped drive adoption and generate growth across a vast range of product lines within the real estate property valuation, data analytics, and technology space. “With her impressive experience and professional expertise in our industry, Heather will truly be an asset to the Veros and Valligent teams,” said Darius Bozorgi, CEO of Veros Software. “Her role is a vital part of the company that will strengthen our position in the market, and further solidifies our reputation as a leader in real estate technology solutions.” About Veros Real Estate Solutions A mortgage technology innovator since 2001, Veros Real Estate Solutions (Veros) is a proven leader in enterprise risk management and collateral valuation services. The firm combines predictive technology, data analytics, and industry expertise to deliver advanced automated solutions that control risk and increase profits throughout the mortgage industry, from loan origination to servicing and securitization. Veros’ products and services include automated valuation, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is the primary architect and technology provider of the GSEs’ Uniform Collateral Data Portal® (UCDP®). Veros also works closely with the FHA to support its Electronic Appraisal Delivery (EAD) portal. The company is also making the home-buying process more efficient for our nation’s Veterans through its appraisal management work with the Department of Veterans Affairs. For more information, visit veros.com or call 866-458-3767. Contacts Heather Zeller, Vice President of MarketingCommunications@veros.com

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Home Prices Up Again in March on Worsening Inventory Shortages and Modest Rise in Demand

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The Data & Analytics division of Black Knight, Inc. released its latest Mortgage Monitor report, based on the company’s industry-leading mortgage, real estate and public records data sets. A modest rise in homebuyer demand led to home prices strengthening for the third consecutive month in March, as both January and February were upwardly revised to show positive movement in prices. As Black Knight Vice President of Enterprise Research Andy Walden explains, while historical trends would suggest an increase of new listings in the spring, the inventory shortage at the root of this home price strengthening has instead worsened as the country moves further into the traditional homebuying season. “Home prices rose a seasonally adjusted 0.45% in March at the national level,” said Walden. “A modest bump in homebuyer demand ran headlong into falling for-sale supply, leading to the third consecutive monthly increase in home prices after they’d been pulling back from recent peaks through the tail end of 2022, essentially nationwide. In fact, just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February. Despite the home price strengthening of these past couple of months, the backward-looking annual growth rate continued to cool as the influence of the red-hot spring 2022 market fades in the rearview mirror. Prices are now up just 1.0% year over year, with the annual growth rate on track to fall to roughly 0% by April.  That said, low inventory levels will limit just how far that metric will fall in coming months. “The strengthening in home prices is the direct result of a second month of modest increases in sales volumes meeting a continually shrinking for-sale inventory. Our Collateral Analytics data showed the supply of active listings fell for the sixth straight month, to the lowest level since April 2022. On top of that, March saw deterioration in supply among 90% of major markets. New listings aren’t filling the gap either – 30% fewer properties hit the market in March as compared to pre-pandemic norms. That deficit’s now increased in each of the last six months and is up from -27% in February and  -25% the month before. Given the modest rise in sales volumes, current available inventory represents just 2.6 months of supply on a seasonally adjusted basis, tipping the scale back toward sellers in a tightly constricted market.” This month’s report also draws upon daily rate lock data from Optimal Blue, a division of Black Knight, to help gauge the impact of today’s volatile rate environment on mortgage lending activity. Rates remained volatile through March and April – from a high of 6.85% in early March, to 6.21% by early April, then back up above 6.5% by the middle of the month. More noteworthy in recent weeks is the pullback in purchase rate lock volumes despite overall lower mortgage rates than we saw in March. Through April 26, rates have averaged 6.38% for the month, down from the 6.56% average daily rate for the month of March. While rates have eased, and the heart of the traditional home buying season takes hold, purchase rate locks have pulled back in recent weeks, falling 18% (unadjusted) from their late March highs. Likewise, refinance volumes are down 17% among cash-outs and 24% among rate-term refis since mid- to late March. This trend is worth watching closely in coming weeks given the delicate balance of supply and demand in today’s market. Granular, timely data has become ever more essential as the market continues to sift through each new shred of economic news in hopes of predicting how the Federal Reserve and broader economy will react. Much more information on these and other topics can be found in this month’s Mortgage Monitor. To review the full report, visit: https://www.blackknightinc.com/data-reports/ SOURCE Black Knight, Inc.

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RCN Capital

Building Relationships Beyond the Loan By Carole VanSickle Ellis When Jeffrey Tesch, CEO Of RCN Capital, started his company in 2010, he did so with the knowledge that he was tackling a difficult project at a nearly impossible point in history. However, Tesch believed the service RCN could provide would not only be invaluable to the real estate investing community; it would be essential to the housing market recovery. With these ideals in mind, he dove into the private money sector headfirst. “We started RCN in 2010, smack-dab in the middle of the banking meltdown and foreclosure crisis,” Tesch recalled, adding, “The reason we started the company then was we believed there was an opportunity to deploy capital to investors who were buying properties, fixing them, and providing good, clean homes for families to live in. It was hard for many people to see it in the moment, but it was a great time to be involved in the financial side of the market.” Tesch said that although at the time starting a new lending company seemed like a nearly impossible task to those “outside” watching the process, his original team members, most of whom still work with RCN, held a firm belief that the complicated lending environment at that time was actually an environment in which investors would be desperate for workable options. “At that particular time, it looked like a real mess, but in hindsight, it was so clear,” Tesch said. “The banks did not want to own the houses; the investors had the opportunity to buy and fix them, and the only component missing was the capital that would enable these investors to buy those houses.” RCN filled that gap, and, 13 years later, continues to serve the real estate industry and identify new, creative ways in which to do so. Alan Johnson, director of originations at RCN, recalled a client for whom RCN’s creative thinking paid off in significant ways more recently. This client had been holding about a dozen properties in a rental portfolio and was looking for a way to boost his cash flow. Although many investors would consult a designated financial advisor in this situation, Johnson’s client asked RCN, and specifically Johnson, for advice as well. “At that time, rates were extremely low, even in the private-lending sector,” Johnson said. The client ultimately opted to refinance all of his properties, thereby increasing cash flow on every one of them. As a result, he was able to leave his traditional 8-to-5 job and begin investing full-time. Johnson said he recently heard from the investor, who reported that his entire family had been talking about RCN at the dinner table the previous night. “He said he was just calling to find out more about his [loan origination team] because of what that process had meant for his family,” Johnson said. “It was a ‘Wow’ kind of moment for all of us. That is the kind of thing you cannot put a price tag on.” A Strong Foundation of Thinking Forward Tesch and RCN started out with a strong sense of purpose, believing they were meant to support, fortify, and ultimately evolve with the private-money industry. “As private lenders, it is tempting to think of just ‘customers’ or ‘investors,’ but you really want to think about the customer of the customer as the person you are really serving,” Tesch said. The customer-of-the-customer, of course, is the end-buyer or resident of the property that a real estate investor has financed and renovated or rehabbed. Tesch believes that thinking of the wellbeing of that eventual permanent or semi-permanent resident creates a lending environment in which the best outcomes are achieved for everyone involved in the investment process from start to finish. “If you think about the resident, that leads you down a different path than you might otherwise follow,” Tesch said. “For example, if interest rates rise and we think about what that end customer needs (which also gives us insight into what our borrowers and investors really need), then we realize that the end customer needs an affordable mortgage so they can buy the property or an affordable monthly rental rate so they can rent it. That tells us that we need to lend in a way that enables the investor fixing up and selling or renting the home to provide that customer with the ability to pay those rents or get that mortgage. When we provide a product that will help them garner those results, we provide a product that is needed throughout the industry.” “It all comes down to understanding our perception of our space,” explained Erica LaCentra, RCN’s chief marketing officer. She said that Tesch, a real estate investor himself, had negative experiences in the private lending industry before becoming a private lender. “There was no consistency,” she said, “and some of those lenders in the early 2000s were not particularly interested in whether a borrower could pay off the loan because they were just as happy to take the property from the investor instead of getting the loan payments. From the beginning, RCN has been dedicated to the professionalization and legitimization of the space, so our company has stayed far away from those types of practices.” According to Johnson, a big part of thinking forward in lending is about relationship building, a passion to which he dedicates a great deal of time at RCN in his role as director of originations. As director, Johnson is heavily involved in training loan originations teams. “You cannot fake relationship building,” Johnson explained. “You will never build a good relationship by faking anything. When we bring people onto the RCN team, we look for people who listen, who can empathize, and who relate to our clients and the end customer, also. At the end of the day, a satisfied investor means repeat business because investors generally do not do just one loan every five or 10 years. They might do five, 10, or 20 loans a

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Washington, D.C.

“The District” Could Face Atypical Headwinds in the Coming Months By Carole VanSickle Ellis In 1783, a mutiny of Continental Army soldiers in the new United States’ then-capital city of Philadelphia, Pennsylvania, demonstrated to the Founding Fathers that their future nation’s capital city must not, as James Madison would argue roughly five years later, “rely on any state for its own security.” Just a few years later, Article One, Section Eight of the United States Constitution would permit the establishment of a “District (not exceeding 10 miles square) as may…become the seat of the government of the United States.” At that time, the Constitution did not designate a specific area for this district, but by 1790, it had been agreed that the new national capital would be located on the Potomac River. Eventually, President George Washington selected specific lands donated by Maryland and Virginia to create the District of Columbia, residents of the area lost their representation in Congress, and the region would go its own unique way from the rest of the nation from that point forward. True to its history, the D.C. housing market usually stands out from national market trends. Historically, it has been recession-resistant to downright recession-proof, and home prices have risen relatively steadily in the area since the 1980s, although there was a dip during 2008 and 2009. Even then, however, prices did not fall as substantially as in many other major markets, and the market reached bottom in March 2009. At that point, it began to climb rapidly, only recently showing indications that it may have peaked. In January of this year, there were 31% more active listings year-over-year, but much of the for-sale inventory was a result of longer times-on-market rather than a dramatic increase in active sellers. “We are in a very unusual market where we are seeing a pullback not only on the demand side, but on the supply side,” observed Bright MLS chief economist Lisa Sturtevant. She explained, “There are fewer sellers in the market, but inventory is growing…simply because homes are sitting on the market longer than they used to.” However, she added, “The underlying fundamentals in the D.C. area are quite strong. The economy is doing well, demographic fundamentals are good, [and] I expect we will see more buyers coming back to the market in the spring along with sellers.” D.C. realtor Susan Isaacs said although spring and summer markets could be relatively strong, her brokerage is expecting the second half of 2023 to “slow considerably due to looming recession combined with the start of the 2024 election cycle.” Isaacs added that if interest rates “unexpectedly” take an early drop at year-end, this could trigger a holiday rush on home purchases. She also noted that retail buyers are currently unwilling or unable to dedicate much of their budgets to improvements after closing, so fix-and-flip investors should expect these buyers to “exercise more caution with home inspection and careful evaluation of price.” The area is also expecting a series of school-zone boundary changes, which could affect which neighborhoods are “hot” by the fall. Isaacs observed, “Redrawing school boundaries affects D.C. real estate values in a significant way…. Take away the [advantageous] school assignment, and homeowners could potentially lose tens of thousands of dollars in home appreciation value.” Subject to the Political Winds & Ongoing Pandemic Policy It is no secret that the year leading up to a presidential election tends to be a slow one in D.C. real estate. In the immediate D.C. area, in particular, home sales growth may slow to zero or even drop into negative numbers, while the broader metro area slows less but still tends to experience healthy, outsized growth the year following the election. “From the buyer’s perspective, [the] housing hunting process is expected to be more competitive [in an election year], while sellers can benefit from the anticipated busier activity,” said National Association of Realtors (NAR) senior economist and director of real estate research Nadia Evangelou. In D.C., the 2024 elections could have a particularly outsized effect on the local housing market because President Biden’s remote-work policies have resulted in D.C. boasting one of the largest remote-working populations in the country in 2023. Three-term D.C. mayor Muriel Bowser used her inaugural speech this past January to warn the president that if he refused to end telework for federal employees, her administration would be forced to find other uses for the empty government office buildings currently populating the nation’s capital. The federal government currently owns about one-third of properties owned or leased in Washington, D.C., and, prior to the pandemic, was directly responsible for about one in four D.C. jobs. Unlike many of her peers on the left side of the aisle, Bowser is demanding “decisive action by the White House to…get most federal workers back to the office, most of the time.” She said one of her goals for her third term in office will be to add 15,000 residents to downtown D.C. over the next five years and implement policies that will result in about 100,000 new residents “before it’s all said and done.” This would require the conversion of large amounts of commercial office space, something Bowser said could be an option if remote work policies remain unchanged. In March of this year, the city’s chief financial officer, Glen Lee, warned that remote work represents a “serious, long-term risk to the District’s economy and its tax base.” In his revenue projections for the upcoming fiscal year, Lee estimated the city would generate revenue under $10 billion, reducing his forecasts by a total of $500 million between FY2024 and FY2026. These losses could result in the cancelation of ambitious city projects that investors might have expected to add value to residential properties, such as access to a fare-free bus system that was scheduled to debut in July of this year. At present, the project is considered “in jeopardy” because there are no longer funds to support it. Readers should note the

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The U.S. Housing Market – What Role will Private Lending Play?

It is Crucial to Have a Network You Can Rely on By Amy Kame As the U.S. housing market continues to navigate the complexities of supply and demand dynamics and interest rate hikes, the role of private lenders has become increasingly important. NPLA members provide leadership and education to an industry that contributes innovative solutions to increase the availability and affordability of homes in America. Leading economists from Zillow, the National Association of Realtors (NAR), John Burns Research and Consulting, Fannie Mae, and the National Association of Home Builders (NAHB) anticipate the housing market will continue to experience growth, albeit at a slower pace. The latest research estimates that the housing shortage in the U.S. ranges from 1.7 million to 7.3 million units. The National Low Income Housing Coalition cited a 7.3-million-unit shortage, Realtor.com at 6.5 million, Fannie Mae at 4.4 million, and John Burns Research & Consulting at 1.7 million. The disparity in these estimates diverges due to different definitions of “shortage” and methodologies in calculating the number of homes needed. Fannie Mae suggests that the U.S. should both build new units and preserve existing ones to tackle the housing shortage, as rehabilitating existing units can be cheaper than constructing new ones. According to a report from the Joint Center for Housing Studies of Harvard University, the U.S. has a significant number of older housing units, many of which require rehabilitation. In 2019, about 37% of the U.S. housing stock was at least 50 years old. Rehabilitating these units will help address the housing shortage. According to Lawrence Yun, NAR’s chief economist, “the market will continue to shift toward a more balanced state in 2023 and 2024, with inventory levels gradually increasing and price growth slowing down” (NAR, 2023). He mentioned that “new construction activity, especially for entry-level homes, will be key to addressing the ongoing housing shortage.” Products offered by private lenders help local communities repair unsafe or unhealthy housing, convert industrial and retail properties into residential properties, and rehabilitate outdated housing stock. Private lenders will continue to play a crucial role with their ability to strategically direct capital to areas in need of development and offer flexible financing and an accelerated funding process. Implications for Private Real Estate Lenders – Stay in the Know The factors discussed in this article indicate that private real estate lenders will encounter both opportunities and challenges in the near future. With the constant flow of information and different predictions from economists and research houses, it is crucial to have a network of professionals within the industry that you can rely on for guidance, advice, and leadership. Stay informed about all things private lending and consider joining the NPLA community. The NPLA Conference is Headed to the Tri-State Area June 19-21 Hard Rock Hotel & Casino, Atlantic City The National Private Lenders Conference is the premier Private Lending Conference in the country. We have served the private lending space for 21 years, and our success can be attributed to our track record of consistently producing premium events for industry professionals to network and grow their businesses. Our mission is to facilitate commerce between capital providers, lenders, investors, brokers, and service providers. At our conference, you can expect to hear from industry experts who will share their insights and experience on the latest trends and developments in private lending. We cover a wide range of topics, including risk management, deal structuring, market analysis, and legislative and regulatory compliance. As we move through 2023 and look ahead to 2024, private real estate lenders face a complex and evolving market. Taking part in the NPLA Conference and the Association allows you to access a network that has proven invaluable for sharing knowledge, receiving advice, and finding new opportunities. Being part of the NPLA means you can rely on industry leaders’ collective knowledge and expertise. What’s the Buzz About The National Private Lenders Conference in Atlantic City will showcase the biggest players in the Private Lending Industry, educational and motivational speakers, and newly added networking sessions with hundreds of local brokers. We welcome you to join our community and attend our upcoming conference. Register by visiting www.nplaconference.com. Monday, June 19 NPLA Charity Poker Tournament Supporting St. Jude St. Jude Children’s Research Hospital is a leading pediatric treatment and research facility focused on curing childhood diseases, including cancer. By participating in our poker tournament, you will be helping to support this incredible organization and its mission to advance cures and means of prevention for pediatric diseases. Let’s help support the amazing work of St. Jude Children’s Research Hospital together. Fee not included in registration. Tuesday, June 20 NPLA Conference — Networking Lounge and VIP Cocktail Party Building relationships is crucial in the lending industry. The NPLA conference provides ample networking opportunities for attendees. We facilitate numerous networking events throughout the conference to ensure that guests and sponsors can connect and build valuable partnerships. Wednesday, June 21 Conference Day Highlights State of the Industry — Devyn Bachman, Senior Vice President, Research & Operations, John Burns Research & Consulting Devyn will share JBREC’s macroeconomic outlook for housing. In addition, she will dive into quantitative and qualitative trends driving the current market conditions for investors and lenders in both the for-sale and for-rent sectors. Devyn monitors for-sale and for-rent housing markets nationwide, providing clients and associates with the most timely and accurate insights on housing market conditions. Panel Discussions and Presentations Economic Trends in Private Lending (Capital Markets Panel) Executives from the top capital-providing firms will discuss the current state of Private Lending, including trends and growth opportunities, strategies for managing risk and ensuring profitability, and predictions for the industry and the market in the short and long term. Unlocking the Potential of Private Lending: Best Practices in a Changing Market (Private Lender Forum) Changing markets can expose lenders to existential risks. Listen in as industry leaders discuss maximizing your balance sheet by utilizing various funding methods. Executives will discuss best practices for successful lending, such as tips for

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I Trust You and I Believe In You

The Role of Trust in Organizational Leadership By Ted Studdard, Colonel, USMC (Ret) I trust you and I believe in you…” Just minutes before, I thought I would be fired.  My fledging two-month career in the Fleet Marine Force was about to end before it ever really started. I had just violated one of the most critical safety rules that I, as a young artillery officer, was responsible for keeping.  The Story I had recently completed my initial Marine Officer training and joined my first unit. We were preparing for an upcoming deployment and were three weeks into our initial month-long, live-fire training exercise. For this training, we were allocated a special type of ammunition that was extremely lethal and thus had extremely specific safety parameters. The training areas where we could shoot this ammunition and the weather were never aligned, and we were in danger of not having the opportunity to train with this ammunition. A couple of days before the exercise was scheduled to end, the weather broke. We were in one of the few firing positions where we could shoot this ammunition.  Our commanding officer, Captain M. A. Singleton, left our position to go to the battalion headquarters to get our next mission, and I was left in charge of firing. I took the initiative and we fired the ammunition — the Marines executed perfectly. As the last round impacted, I could see Captain Singleton’s vehicle headed back to our firing position. As soon as he arrived, I told him about shooting the ammunition and how well the Marines executed the mission, fully expecting him to be pleased. He was not. In fact, he started asking me questions about how we executed the fire mission, specifically focusing on safety. He was most interested in finding out if I knew where all the other units were in the vast training area. When he asked if I knew where the mortars were, I knew I had failed. I could not account for their location. He told me that they were out of my line of sight but less than a kilometer in front of our gunline (roughly half a mile). This ammunition was so lethal and so sensitive that firing over the heads of friendly forces was strictly prohibited. I was responsible for violating this cardinal rule, and, even more importantly, my actions put lives at risk. Captain Singleton motioned for me to follow. We walked a short distance from the rest of the unit so we could have a bit of privacy.  I fully expected to be on the receiving end of a very unpleasant one-way conversation followed by being relieved of my duties, i.e., fired. For several very long minutes, Captain Singleton quizzed me on safety procedures, finally stopping when he knew that I understood what to do and that I had truly made a mistake in my haste to accomplish the mission. I braced myself for what would come next — relieving me of my duties. To my surprise, Captain Singleton said, “I trust you and I believe in you. Now go train your Marines.” I felt like I could run through a brick wall. I would get a second chance; my commanding officer told me he trusted me, and he showed that he trusted me through his actions. Creating Trust Up and Down the Chain How did this event impact our team? Personally, I knew that Captain Singleton had my back and there was no way that I would ever do anything to let him down. Many leaders think that, by virtue of their position, subordinates automatically trust them. This is not true, in fact, leaders often must give trust to get trust. In his book, The Leader as Coach, Richard C. Huseman, Ph.D. cites a Boston University Survey that found 80% of employees do not trust their leadership. On this day, Captain Singleton gave trust by the truckload. Our entire unit quickly realized what I had done, and all were watching to see how our leader responded. The way he handled this situation let all the Marines know that if we made a mistake that was not illegal, immoral, or unethical that he would support us. On this day, we all witnessed our leader trusting down the chain, which in turn, created trust back up the chain. The impact was far greater than any of us ever imagined.  Within a year we would be in combat together, and the foundation of trust Captain Singleton built that day would provide the footing that enabled our unit to execute at the highest level under extreme circumstances. Trust is the Key to Unlocking Your Team’s Potential After 25 years leading large, dispersed organizations around the world followed by nearly a decade in various leadership roles at the corporate headquarters of a Fortune 20 company, I am more convinced than ever that trust is the key to unlocking the tremendous potential that we all have in our current teams. Why is trust so important? Trust empowers your team. For starters, trust facilitates decisions at the point of action by the person closest to the issue, who, in many cases, has the best situational awareness. Trust also speeds the entire decision cycle by enabling your team to make decisions on the spot. Empowered people feel ownership and the team becomes “our” team rather than the boss’s team. Many people consider trust an intangible quality that cannot be measured, but an empowered team built on trust has lower turnover, lower hiring and onboarding costs, and improved connectivity and continuity both internally and externally. How can we build trust? Let’s focus on two ways any team can build trust: The first way is by developing your team deliberately, so you are comfortable placing your trust in them. The second involves incorporating your team into planning, thus demonstrating the trust and faith you have in their experience and their expertise. Building a team that you are comfortable trusting begins with onboarding.

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