The FTC drops case against ICE’s acquisition of Black Knight.I have been watching ICE for a few years now, and this is a big deal, and exciting news for the Industry, and for Paragon customers, eventually, I believe.
This merger means modernization that advances real estate toward an adaptive, sustainable and connected future.
Stuart McFarland.
Stuart is a former EVP Operations and CFO at Fannie Mae, EVP General Manager at GE Capital Mortgage Services, and CEO at GE Capital Asset Management…and one of my business partners on one of my real estate projects, Places Platform LLC.
Comments from Stuart:
ICE is best known as the owner of global marketplaces including the New York Stock Exchange. It entered real estate in 2012 after buying DebtMarket, an exchange for distressed home debt. A sequence of acquisitions followed that targeted the control points of a next generation operating system.
MERS provided a trusted “golden record” of the owner of the mortgage loan asset, Simplifile reaches the county recording end-points, IDC integrated $5.2B of data services, Ellie Mae added $11B of origination processing, risQ made location risk visible and now Black Knight delivers another $11B of MLS capability, public data and consumer payments. This massive bet on a digital future delivers trusted connections to verify parts (data), eliminates rework, assures quality and collapses the cycle time of a loan.
THE POWER OF INNOVATION
ICE’s network, data and trading system architecture can power innovation to transform fixed income capital markets. A “Housing Capital Cloud” would unify the fragmented ecosystem to package, evaluate and distribute information based “durable goods.” Lenders should expect to redesign workflows and business rules to determine if a loan is “Fit 4 Sale.”
Homebuyers and other investors will gain better views of risk and return as hyper local “Forward” projections inform valuations and pricing for a range of assets. A “Lens” that creates a shared understanding of all property sub-markets may enable the private and public sectors to effectively target capital that meets the challenges of housing affordability, struggling downtowns, fiscal imbalances and social inequities that unevenly affect every community.
The basis of competition is shifting as ICE, CoStar, Zillow, and the GSEs after release, contend for consumer attention, top producer loyalty and data supremacy. ICE has previewed a Consumer Engagement Suite which could deliver a list-to-loan-to-servicing experience. Realtors have a structural advantage as the listing event is the signal to downstream transactions. Will they ever share in the value of their data to profit beyond the first point of sale?
ICE promises a systemwide upgrade where everyone wins except the unstable status quo. Digitization will enable industry efficiency, new choices for consumers and communities, reliable liquidity for capital markets and risk aware pricing of guarantees. The “on platform” first movers will grow profit margins, gain market share and build brand equity by controlling their digital rights, adopting interoperability standards and creating greater value from local networks. Success means zero defect loans, costing $2K to manufacture, for 5M new homes, built in the right places.
