Mortgage Tech: Black Knight, CoreLogic and Mutual of Omaha

Mortgage Tech: Black Knight, CoreLogic and Mutual of Omaha
As more and more mortgage tech companies enter the scene, competition for accessibility and personalization gained speed this week as proptech touched down in more niche submarkets.

Data analytics giant Black Knight unveiled a new self-service style platform aimed at correspondent lending that will allow lenders to manage conditions and validate pricing locks on Best Effort loans.

Coined as Seller Digital, the platform will also allow secondary market lenders to track and validate any Mandatory commitments they are working on in the pipeline.

“To be competitive in today’s correspondent market, lenders must be able to offer their sellers a simple, self-service platform,” said Rich Gagliano, president of Black Knight Origination Technologies. “Seller Digital exceeds these requirements with its unique personalization, automation and integration features, while giving lenders the power to customize configurations based on their own specific business requirements.”

The new mortgage tech is also fully integrated with Black Knight’s Empower platform – a loan origination system (LOS) that will update correspondent lenders as decisions are made on the loans themselves.

Depending on the conditions of the loans, secondary lenders can personalize what information needs to be addressed as a result of Black Knight’s AI program, AIVA. The tech will assess the completeness of the loan package when sellers upload required documents and set conditions when information is missing.

On Friday, Freddie Mac welcomed CoreLogic as a third-party mortgage tech provider for its asset and income modeler (AIM) specifically targeting borrowers who are self-employed.

Though the AIM itself is new technology, CoreLogic’s analytics abilities will automate document submission as self-employed borrowers typically have multiple sources of income. Through the automation, CoreLogic’s tech will then analyze and calculate the income based on the loans guidelines.

“CoreLogic’s digital mortgage tech solution provides us with the appropriate level of information we need to facilitate representation and warranty relief on one of the most challenging calculations in the underwriting workflow, and helps lenders reduce their costs and save time,” said Kevin Kauffman, Freddie Mac’s vice president for business partner integration.

Because self-employed borrowers tend to experience greater income volatility and lack pay stubs or W-2 wage statements, the underwriting process for these borrowers has a greater chance of getting bogged down. A 2018 study from the Urban Institute found during the last recession, self-employed households were much more likely to lose their footing.

“Most strikingly, even when income is held constant, mortgage use and the homeownership rate for self-employed households fell more than they did for salaried households, suggesting that other factors, such as reduced credit availability, are likely at play,” the Urban Scholars said.

According to Jay Kingsley, executive for Credit Solutions at CoreLogic, this is the first of several programs the data giant plans to integrate with the GSE.

The reverse mortgage division of Mutual of Omaha announced the launch of a new app on Tuesday that plans to serve reverse mortgage borrowers seeking either a Home Equity Conversion Mortgage (HECM), or a HECM for Purchase (H4P) transaction.

Featured tools for potential borrowers include initial application access, a mechanism for documents to be captured and uploaded, notifications of “loan milestones” for borrowers and/or real estate agents, and a chat feature allowing communication between the client and loan officer or agent, Reverse Mortgage Daily reported.

“We have seen that seniors have been more able to adopt and use technology over the last few years,” John Metcalf, vice president of sales technology and strategy for Mutual of Omaha Mortgage told RMD. “But I think what’s really come to light in terms of deployment of this app is that you have more people across the country — and across the world — leveraging technology to communicate with their families and friends due to the pandemic.”

While reverse mortgages and HECM programs have received a bad reputation, the reverse mortgage space had a surprising uptick in activity amidst the pandemic as older homeowners tapped into their equity to fill the financial gaps brought on by the coronavirus. HECM originations stood at $13.1 billion as of Sept. 30.

Also, in case you missed it…

Proptech startups Brace and Reggora both snagged Series B funding last week, at $15.7 million and $30 million, respectively.

Months after taking over management of broker LOS platform ARIVE, mortgage software startup LendWize has finalized a deal to take complete ownership of the origination platform.

Real estate services and technology firm SitusAMC has acquired mortgage tech software developer ReadyPrice – bumping the New York-based firm’s acquisition tally to three in just under a year.

Orchard announced Tuesday its immediate availability to consumers in Houston, as well as future expansion into Charlotte, Raleigh-Durham, and the Washington, D.C. suburbs in the upcoming months.

And the Federal Reserve is looking into the rise of artificial intelligence and machine learning, and is considering stepping up its oversight of these technologies used by financial institutions.
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Here’s the salary you need to buy a home in five of the largest U.S. cities

Here’s the salary you need to buy a home in five of the largest U.S. cities

If you’re considering purchasing a home, you probably have a lot of questions. One being, how much do you need to earn in a year to afford a mortgage in the U.S.? 

Since home prices vary state-by-state, the salary you need to qualify for a mortgage in the U.S. depends a great deal on where you live. For example, the median price of a home in New York is typically more expensive than a home in Wisconsin. When shopping for a house, you might want to consider looking outside of America’s largest cities. 

Last month, HSH.com used the National Association of Realtors’ 2020 third-quarter data to track the most expensive cities in the U.S., and how much a potential homeowner would need to earn to live comfortably.

Here’s a look at how much you need to earn in five of the largest U.S. cities: 

1. New York City, New York

Affording a home in the U.S. is no easy feat; especially in New York City The city is considered one of the most expensive places to live, and prices have only increased due to the housing boom. 

Median home price: $480,000

Salary needed: $104,000

Monthly payment: $2,000

2. Los Angeles, California

The cost of homes in Los Angeles, California has risen in recent years. And according to economists, 2021 will bring a 7.3% price increase across the city. 

Median home price: $701,000

Salary needed: $122,000

Monthly payment: $3,000

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3. Chicgao, Illinois

The average home price in the U.S surged in 2020, and Chicago’s housing market was no different. And it looks the surge will continue into 2021 due to a tight supply of homes and low mortgage rates. 

Median home price: $299,000

Salary needed: $66,000

Monthly payment: $1,600

4. Houston, Texas

In December 2020, Houston saw a 25% growth in home sales compared to the same month the previous year. The housing market in Houston is booming, with buyers paying high prices for average homes. 

Median home price: $272,000

Salary needed: $60,000

Monthly payment: $1,400

5. Phoenix, Arizona

Realtor.com’s 2021 Housing Forecast predicts home sales in Phoenix, Arizona will increase 11.4% from last year. These numbers will make Phoenix one of the hottest housing markets in 2021. 

Median home price: $342,000

Salary needed: $59,000

Monthly payment: $1,400

Contrary to popular belief, how much you earn isn’t the only criteria for getting a mortgage. Lenders look at far more than your paycheck. They look at your credit score, debt-to-income ratio, which is the percentage of your monthly gross income that goes toward paying debts and your projected down payment.

And while these cities require a higher salary, cities like Oklahoma City ($34,000 salary needed), Cleveland ($41,000 salary needed) and Indianapolis ($44,000 salary needed) are much more affordable.
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Impact of the CARES Act on mortgage servicing operations

Impact of the CARES Act on mortgage servicing operations
Since the CARES Act was signed into law, homeowners across the U.S. have taken advantage of its mortgage relief provisions. In fact, as of November 2020, a total of 6.5 million borrowers had been, or still were, on a COVID-19-related forbearance plan, either through the CARES Act or another program.

Fortunately, the forbearance programs and foreclosure moratoria have protected many Americans from losing their homes during the pandemic. Thanks in large part to these programs, the sort of housing market crisis of the 2008-2009 Great Recession has thus far been avoided.

At the onset of the COVID-19 crisis in the U.S., as servicers worked to quickly help borrowers in need of assistance, significant operational challenges began to emerge. Many of these challenges persist today, while new ones – like post-forbearance credit reporting, investor and year-end reporting for deferred balances – continue to arise. As we move into 2021 and the subsequent rolling 12-month expirations of forbearance plans throughout the year, new challenges will become even more pronounced.

The ability to quickly identify and address these operational challenges on an ongoing basis is crucial for servicers to maintain efficient and effective borrower assistance, while complying with the CARES Act and other government, state and local requirements.

Clearly, the faster that operational issues can be resolved, the less strain imposed on a servicer’s day-to-day processes as well. This is especially important since high volumes of borrower inquiries are expected to continue as borrowers forbearance periods end.

Initial challenges

Looking back on the first few months of the crisis, one of the biggest challenges servicers faced was putting systems and processes in place to handle the massive influx of customer inquiries. But, like many other businesses, servicers were transitioning to a remote workforce, making it difficult to field these urgent borrower calls.

How the National Flood Insurance Program’s recent extension provides stability for the housing market

The NFIP provides stability for the housing market. As part of its Flood Services business, CoreLogic completes flood zone determinations for banks and mortgage companies to support their compliance with the mandatory purchase requirements.

Presented by: CoreLogic

Of course, servicers had experienced large volumes of borrower calls after the Home Affordable Modification Program (HAMP) launched in 2009. With HAMP, though, these inquiries came in over an extended period of time. After the CARES Act was enacted, the calls started pouring in the next day.

The fact that by the beginning of May, there were close to 4 million borrowers in forbearance plans illustrates just how high the volume climbed in a very short period of time. Servicers that offered robust customer-facing digital and online applications, with intuitive capabilities and clear communication mechanisms, were certainly in a better position to handle the influx.

When does the 180-day period begin?

Under the CARES Act, borrowers with federally backed loans can request an initial 180 days of forbearance, and ask for another 180 days once that period is over. The GSEs also require servicers to attempt to make contact with borrowers before the initial six months have expired to find out if forbearance-plan extensions or other options are needed.

Sounds straightforward enough, but determining the 180-day threshold has been problematic for many. For example, some borrowers decided to continue making payments initially after their forbearance plans were set up. In these situations, when does the 180-day period begin — when those loans were set up on forbearance or when payments stopped?

Many borrowers were initially on 90-day plans, due to the uncertainty about how long the COVID-19 crisis would last. In some instances, servicers could not get in touch with these borrowers to determine if an extension was needed. For those situations, there was really no choice but to place borrowers on a 180-day plan. Again, servicers faced the question of when to start counting the 180-day CARES Act forbearance period.

Blocking and tackling

Servicers also had to do a considerable amount of blocking and tackling after the crisis’ onset. From the suspension of auto-drafting and late fees to determining what information bills should include, numerous issues kept cropping up.

Under normal circumstances, these types of issues are easily handled, even when a relatively large number of borrowers are affected during a natural disaster, for example. However, with the unprecedentedly large volume of loans impacted during the COVID crisis, it quickly became a significant operational and compliance challenge.

Let’s take the example of suspending automatic payments. Many borrowers were current on their loan before they went on a forbearance plan. Because they were current on payments, the servicer’s system of record may not have triggered auto payments to stop. A servicer could have deleted borrowers’ check-drafting data to resolve the issue, but then would be inundated with thousands of customers calling to get their drafting information set back up once forbearance ends.

Having a configurable servicing system that could be updated quickly to stop auto payments was key for helping servicers successfully address these types of ongoing challenges.

Current and approaching challenges

Investor reporting

In May 2020, the FHFA announced that Fannie Mae and Freddie Mac would allow payment deferrals as a forbearance-repayment option for homeowners. This option enables borrowers to defer their missed payments until the home is sold, refinanced or paid off.

The impact of deferral plans on investor reporting is a critical issue that needs to be addressed. With deferral plans, servicers are required to combine the borrower’s missed payments, including principal, interest and escrow, and report the total sum – not a breakdown – to investors.  

But here’s the dilemma. What happens with IRS reporting when the borrower pays off the loan? The IRS will want to know what portion of the payment consisted of interest. Servicers will need to work closely with their technology provider or IT department to understand the functionality their systems can deliver for tracking this information, especially since some loans may be in the system for 30 years.

Loan decisioning

Servicers are now challenged with managing the massive volume of loans that are ending their 180-day forbearance period. Each faces the daunting prospect of finding out, from thousands of customers, if an extension is needed.

If an extension is not requested, the servicer will next have to engage in active loss mitigation efforts with their customers. This will most likely take the form of a waterfall approach to various workout plans, loan modifications, or – ultimately in the wort case scenario – starting foreclosure.

To help avoid the latter, there may be more mortgage-relief programs enacted, especially with a new administration coming to Washington D.C. in January 2021. A newly emboldened CFPB is quite likely, and we may see new regulatory moves geared to helping struggling homeowners.

So, in addition to contacting each customer on a COVID-19 related forbearance, servicers need to be fully apprised on the latest regulatory enhancements and compliance requirements – on top of the myriad loss mitigation plans already in place.

Robust technology that evaluates borrowers for loss mitigation options regardless of the investor, insurer, loan type, policy or program is critical during this time. The technology will also need to facilitate quick decisioning, while helping servicers remain complaint.      

Helping facilitate a “soft landing”

Unfortunately, some borrowers who were current on their payments before going on a forbearance plan will not be in a position to take advantage of deferrals, partial claim plans or loan modifications.The industry will need to come up with ways to help these consumers experience a “soft landing.” Many of them might be able to purchase a less expensive house and start over, instead of being wiped out by the COVID crisis.

As we all know from the Great Recession, it’s not beneficial to anyone – borrowers, servicers, investors – nor to the economy overall – to move forward with a foreclosure that could be avoided. Thankfully, the housing market remains robust, equity positions are by and large very strong and many, if not most, homeowners could sell to avoid foreclosure without facing a loss. Hardly ideal, but a better outcome than the alternative.

As the uncertainly and difficulties related to COVID-19 continue, servicers will likely face more challenges. To successfully navigate new issues that come up, servicers should have multiple channels in place for efficient and effective borrower communication.

By working closely with their technology partners, servicers can better understand how to improve the functionality their systems deliver to help streamline operations, support their compliance efforts and stay connected to borrowers, while ongoing COVID-19 issues continue to impact the mortgage market.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the author of this story:George FitzGerald at Exec.Author@bkfs.com 

To contact the editor responsible for this story:Sarah Wheeler at swheeler@housingwire.com
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Texas Realtor who stormed Capitol responds to backlash

Texas Realtor who stormed Capitol responds to backlash
A week after the insurrection at the Capitol, Frisco, Texas-based Realtor Jenna Ryan released a statement condemning the violence, even after multiple videos and photos surfaced – including ones that she filmed herself – of Ryan participating in the insurrection.

What started as a protest devolved into a riot and siege of the Capitol building, resulting in five deaths – including that of a police officer – and significant damage to the building itself.

Ryan, owner of Jenna Ryan Realty and a conservative talk show host, said she flew to Washington D.C. on a private plane to support what she later said she believed to be a peaceful march in protest of the certification of electoral votes that named Joe Biden president.

“I was just there to let my voice be heard and document the events,” Ryan said in an interview with HousingWire on Tuesday. “I was not part of the violence.”

Social media users and news outlets captured Ryan, wearing a red-and-blue stocking cap with “TRUMP” emblazoned on it, as part of a mob rushing the doors of the Capitol, as well as a photo of her posing by a broken window.

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“Window at the Capital. And if the news doesn’t stop lying about us we’re going to come after their studios next,” read her now since-deleted tweet.

She also posted a livestream video on the private jet she flew in to Washington D.C. where she said “they want to steal the election, they want to steal everything.”

Her interview with HousingWire and statement on Facebook, however, took different tones.

“I do not condone the violence that occurred on January 6, 2020 and I am truly heartbroken for the people who have lost their lives,” she wrote. “Hatred and violence toward each other are not going to solve our country’s issues. As a nation, we need to come together – Republican, Democrat and Independent – and have an open and honest discussion about the issues in our country and resolve our issues in peace.”

She told HousingWire she “is a patriot who loves America and is very concerned.” She also acknowledged that she is getting support from other Republicans and she expects her company to grow when “everything dies down.”

“People can see through the lies of the media trying to demonize Trump supporters,” she said. “Americans are concerned about America and election fraud. The media is gaslighting America.”

Potential consequences

As law enforcement officials crack down on the rioters who were captured on video and in photos participating in the melee at the Capitol, industry trade groups and companies are also condemning those who participated, though licenses have not been pulled or realtor association memberships revoked.

The Texas Real Estate Commission (TREC) and National Association of Realtors (NAR) condemned the violence, but haven’t taken action against Ryan or others.

In an email to HousingWire, TREC spokesperson Christine Anderson said the Commission posted an FAQ on licensed agents convicted of crimes, as well as a general statement on the Capitol riots.

Ryan has not formally been charged with a crime as of Wednesday.

“This section gives the Commission authority to suspend or revoke a license holder that has entered a plea of guilty, or no contest, or has been convicted of a felony or any criminal offense that involves fraud, including misdemeanors,” the site read. “The Commission does not have the authority to revoke or suspend a license holder that has been only charged or accused of committing a felony or criminal offense that involves fraud.” 

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TREC officials added that, generally, its authority is limited to conduct the license holder undertakes while engaged in real estate brokerage. 

According to a search on TREC’s portal, Ryan’s license remains active and she sponsors one agent named Stacy Bennett.

NAR President Charlie Oppler also issued a statement condemning the events and saying that NAR supports peaceful protests and the peaceful transfer of power. But the trade organization would not comment specifically on Ryan.

In an email to HousingWire, NAR spokesperson Wesley Shaw said the Association is encouraging anyone with information regarding unlawful behavior to report those violations to the Federal Bureau of Investigation.

“We stand with federal law enforcement as they work to thoroughly investigate this week’s events and ensure all those accused of breaking the law are prosecuted to the fullest extent,” Shaw said in an official statement.

Ryan has not shied away from the media spotlight since going viral for her actions on Jan. 6, sitting for an interview with Spectrum News and regularly posting on Twitter and Facebook accounts. Several of them were disabled or made private on Wednesday.

“The Patriot Party”

Ryan claims that her real estate company is “very successful,” telling Candysdirt.com in an interview that she only works 15 hours a week and still sells plenty of homes. She does not appear concerned about the prospect of being arrested, or her business suffering.

She also told Spectrum News that she’s interested in running for office under a new party she said she is going to help create – the “Patriot Party.”

“We are going to create a new party, and we are not down with RINOS or Republicans,” she said. “I will never again vote for another Republican. I will vote for the Patriot party from now on, and I will campaign, and I will run for office.”

She continued, saying “if anyone out there knows how to set me up in this way, let me know, because I’m ready to serve my country and bind against people that are trying to ruin this country.”

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The video has more than 4,000 views.

Ryan told HousingWire that she feels supported by “75 million people who have my back” – a reference to the number of people who voted for President Donald Trump in the November election.

“Many people can see the truth because they know me, they know my reputation, and they know that I truly care for the USA,” she said.
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UWM will partially refund borrowers for late appraisals

UWM will partially refund borrowers for late appraisals
United Wholesale Mortgage (UWM) unveiled a new policy this week, telling brokers that appraisals will be completed within 10 business days or they’ll refund 50% of the appraisal cost back to the customer.

The initiative, called “Appraisal Promise,” drops just a week before the wholesale lender’s Wall Street debut on Jan. 22. UWM is merging with a special purpose acquisition company led by Alec Gores. It’s expected to achieve a valuation of $16.1 billion following the merger, the largest SPAC to date.

UWM, the top wholesale mortgage lender and the second largest originator in America, has been trying to generate buzz with its broker set through a series of product launches and sweeteners.

A week ago, it said it will offer 61 basis points on conventional loans through March 8. It’s also offering ultra-low rate mortgages on FHA loans.

UWM’s rule stipulates that only appraisals that go through an approved appraisal management company are eligible for a 50% credit should it not be completed within the 10 business days.

Are borrower-assisted inspections here to stay?

HousingWire recently spoke with CoreLogic’s Chief Appraiser Shawn Telford about re-examining traditional appraisal workflows in light of the changes brought on by COVID-19.

Presented by: CoreLogic

“We are always looking for ways to support our brokers and help them win,” said Mat Ishbia, President and CEO of UWM. “We consistently find opportunities to make the process faster, easier and cheaper. Appraisals are one piece of the process where speed matters, and our new Appraisal Promise will give brokers confidence that enable them to get borrowers into their dream home as quickly as possible.”

When lenders were struggling to meet capacity for most of 2020 and turn times eclipsed 30-plus days, many fingered appraisals as contributing to the logjam.

The Federal Housing Finance Agency is currently considering implementing hybrid appraisals that enlist a third-party – typically an appraiser trainee, home inspector or real estate agent – to collect the data for a lender and certified appraiser once past the automated underwriting system.

According to the FHFA, hybrid appraisals would increase coverage for rural markets and high-volume areas where speed matters. In August, several lenders voiced concern over the appraisal industry’s finite number of appraisers and underwriters as well as quotes taking anywhere from 10 to 27 days to hit the lender’s desk.

Though hybrid appraisals are faster and usually cheaper, adding another cook in the kitchen could complicate matters since a uniform set of standards does not currently exist that hold non-appraisers accountable for their appraisals, the FHFA said in late December.
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New-year optimism reflected in mortgage applications jump

New-year optimism reflected in mortgage applications jump
Mortgage applications jumped 16.7% after a 4.2% drop last week, according to the Mortgage Bankers Association.

The jump underlines the seasonality behind last week’s decrease in mortgage rates, as well as the expectation of additional fiscal stimulus from the incoming administration, per MBA Associate Vice President of Economic and Industry Forecasting Joel Kan.

“Booming refinance activity in the first full week of 2021 caused mortgage applications to surge to their highest level since March 2020, despite most mortgage rates in the survey rising last week,” Kan said.

The 30-year fixed mortgage rate climbed two basis points to 2.88%, but the 15-year fixed rate fell to 2.39% — a survey low. The refinance index increased 20% from the previous week and was 93% higher than the same week one year ago.

“Even with the rise in mortgage rates, refinancing did not slow to begin the year, with the index hitting its highest level since last March,” said Kan. “Both conventional and government refinance applications increased, with applications for government loans having their strongest week since June 2012.”

The seasonally adjusted purchase index increased 8% after a 0.8% decrease from last week.

The FHA share of total applications decreased to 9.6% from 10.1% the week prior. The VA share of total applications increased to 15.8% from 13.6% the week prior.

“This is a positive sign of more lower-income and first-time buyers returning to the market,” Kan said.

Here is a more detailed breakdown of this week’s mortgage application data:

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) increased to 2.88% from 2.86%The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) increased to 3.17% from 3.08%The average contract interest rate for 30-year fixed-rate mortgages increased to 2.93% from 2.90%The average contract interest rate for 15-year fixed-rate mortgages decreased to a survey-low 2.39% from 2.40%The average contract interest rate for 5/1 ARMs increased to 2.66% from 2.63%
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Visa, Plaid terminate $5.3 billion merger agreement

Visa, Plaid terminate .3 billion merger agreement
This article was originally published on FinLedger, HW Media’s new, fintech-focused sister publication.

Almost exactly a year after announcing their $5.3 billion merger, Visa and Plaid have called off the proposed marriage, and the U.S. Department of Justice has agreed to drop its antitrust lawsuit challenging the deal.

Visa announced termination of the deal and the lawsuit in a Jan. 12 news release.

“We are confident we would have prevailed in court as Plaid’s capabilities are complementary to Visa’s, not competitive,” said Al Kelly, chairman and CEO of San Francisco-based Visa. “We believe the combination of Visa with Plaid would have delivered significant benefits, including greater innovation for developers, financial institutions and consumers. However, it has been a full year since we first announced our intent to acquire Plaid, and protracted and complex litigation will likely take substantial time to fully resolve.”

In a Jan. 12 conference call, Kelly explained that it had become “quite clear” in recent weeks that the Department of Justice was unwilling to work with Visa and Plaid to bring the legal action to “a timely and reasonable conclusion.”

“The reality is that we’re making a judgment that there’s plenty of opportunity in this very fast-moving space,” Kelly said, “and we’re just going to move on with life and take advantage of these other opportunities rather than get bogged down in a long, drawn-out process that’s already been long, never mind how much longer it would go.”

Declining to discuss potential fintech acquisitions, Kelly noted that Visa prefers to focus first on organic growth, followed by partnerships and acquisitions. Visa works with fintechs as both customers and partners, he pointed out. The company cultivates partnerships through its Fintech Fast Track Program.

“Fintechs have been very important to us for probably the last three years, and we’ve been very engaged with them,” Kelly said on the conference call.

Zach Perret, co-founder and CEO of San Francisco-based Plaid, said the merger of his fintech company with payments giant Visa “would have been a great combination.” However, they’re not parting ways. Perret said Plaid will continue to collaborate with Visa as a strategic investor and partner.

“This past year saw an unprecedented uptick in demand for the services powered by Plaid, and our priority is to support the hundreds of millions of people who now rely on fintech,” Perret said in the news release. “We made great strides last year, growing our customers by more than 60 percent and adding hundreds of banks to our platform.”

In November, the Department of Justice (DOJ) sued to block Visa’s proposed purchase of Plaid. The DOJ complained that Visa was buying Plaid to eliminate a competitor in the lucrative business of online debit transactions. Visa had objected to the DOJ suit, arguing that Plaid is not a payments company and, therefore, is not a direct competitor.

Plaid’s technology enables apps to connect with users’ bank accounts. Its customers include fintech platforms like Venmo, SoFi, Betterment, Square, PayPal, Robinhood and Affirm, as well as tech players such as Google and Microsoft.

“In addition to our ongoing focus on helping companies of all sizes deliver digital financial products, we have made significant progress in the ways that we work with financial institutions. Delivering on the promise of open finance is in everyone’s best interest, and we’ll be working in lockstep with our customers and financial institutions to bring this to fruition globally,” Perret wrote in a blog post.

Since its founding in 2013, Plaid has collected $309.3 million in funding. Aside from Visa, Plaid’s investors include Goldman Sachs, a16z (Andreessen Horowitz), Citi Ventures, American Express Ventures, GV, Index Ventures, NEA and former Kleiner Perkins partner Mary Meeker. Its most recent valuation was $5.3 billion.
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