PERSON OF THE WEEK: Keith D. Murray is founder and CEO of VRM Mortgage Services, a provider of real estate owned (REO) asset management, valuations and other services to the mortgage banking industry. MortgageOrb recently interviewed Murray to learn more about how the company has adapted to the major changes that have swept the industry since 2007 and how it has benefited through its strong commitment to diversity.
Q: VRM has been an REO outsourcer since 2006. What was business like those first two years before the housing crisis hit? How did the flood of REO that started in late 2007 affect the company's operational model?
Murray: During the early days of VRM, the nation's REO inventory was at ‘normal’ levels. When we opened the doors, we had a dozen committed associates who were carefully handpicked based on each individual's expertise handling distressed assets and experience working with servicers and investors of various sizes.
Over the next two years, as REO volumes increased, more clients began to leverage the experience of our people to support their end-to-end asset management activities. We grew rapidly to more than 400 employees. Even so, we continued to find, hire and rely on only the best. Setting high standards for our people has allowed us to scale to meet our clients' demands while maintaining best-in-class performance, even when REO volumes were at their peak.
Q: How has the company grown and evolved over the past five years? Which areas of the business are currently seeing the strongest growth?
Murray: We've seen tremendous growth in the past five years. In fact, we recently surpassed $50 billion in sales, which represents more than 500,000 properties that we've listed, managed and sold.
Today, VRM Mortgage Services handles much more than REOs, and all our business lines are growing consistently. Our property preservation and settlement services are in strong demand, but I would say that two of our fastest-growing business lines are valuations and pre-foreclosure solutions. As lenders and servicers continue to reach out more proactively to resolve delinquencies, their needs have changed, and we have adapted.
Our educational platform, VRM University, is still going strong as well, having provided continuing education to tens of thousands of mortgage and real estate professionals in the past four years alone. We've recently expanded the training options to include what we call VRMU Academy, which provides leadership and compliance training for small to mid-size businesses.
When you look at our evolution, I'd say that, by necessity, we've grown into an extremely well-rounded provider of mortgage servicing solutions. If our clients need it, we find a way to do it.
Q: As the REO volumes continue to contract and many segments of the mortgage industry (originations included) are shrinking, what is VRM's long-term strategic growth plan? How do you see the REO outsourcing model changing?
Murray: First, I think there will always be a tremendous need for REO outsourcing. As an outsourcer, we provide core competencies and economies of scale. Our REO solutions provide significant benefit to lenders, servicers and investors, especially when it comes to compliance and reputational risk. Recently, we've also seen the market shift from large institutional investors to a large number of small, local players. But even as overall REO volumes decline and the market continues to change, I'm very optimistic about VRM's future.
From the very start, we have been committed to providing clients with compliant, leading-edge solutions and supporting them with unparalleled customer service. That commitment hasn't changed. However, we've been very entrepreneurial in our approach, which has enabled us to evolve and add new solutions as the needs of our clients have changed.
Some good, recent examples include our default title and closing, property inspection, rental management, and localized property preservation services. We plan to keep evolving to meet the demands of our clients. But our core business is still asset management and disposition. Frankly, we don't believe anyone can do it better.
Q: Diversity seems to be a growing topic of interest for the mortgage industry. From the newly formed Mortgage Bankers Association Strategic Markets and Diversity Summit to the focus on Section 342 of the Dodd Frank Act Section and similar mandates under the Housing and Economic Recovery Act of 2008, it seems the industry may be making a significant shift in how it addresses diversity. As the founder of two minority-owned mortgage-related businesses, what is your perspective on the increasing focus on diversity?
Murray: I think it's a great thing. This nation is increasingly becoming more diverse on many different levels, and it's that diversity that makes our nation stronger. Both of my companies, VRM and PCV Murcor, have always been committed to diversity, especially in our business partnerships. To be honest, I don't think we would be able to execute to the level that we do without that commitment. So, naturally, I'm excited to see the larger movement happening within the mortgage industry.
I believe that outreach is a critical component to promoting diversity. In our case, we've partnered with all the major trade organizations that represent minorities and minority-owned businesses, and we count many of their members among our business partners. In doing so, we have found many experienced and highly qualified companies that were simply looking for an opportunity to work with a large corporate seller.
Q: There is a perception that using minority-owned/diversity-owned companies means using small providers that can't manage the volume of larger lenders and servicers. How would you respond to those who hold this opinion?
Murray: I understand that perception exists among some in our industry, but it's simply not true. With respect, I founded and own two companies that are industry leaders. PCV has been in the valuations business for over 33 years, and we've already talked about VRM's incredible $50 billion milestone. Both companies are top providers in their fields, and each has major industry players as clients. We're not alone, either. There are many other successful minority-owned firms throughout the housing industry, several of which have been featured in MortgageOrb.
I don't believe it matters who you are or where you started. Any company that is able to demonstrate a clear vision, attract and retain solid management, and build the best technology can be scaled to support clients of any size, outperform competitors and exceed client expectations.