The Role of Tech Innovation in Mortgage Lending With Optimal Blue CPO Erin Wester | April 2025 Data

MA Opening: 00:01:00

Welcome to Market Advantage, the monthly podcast from Optimal Blue. Tune in for valuable insights from the Market Advantage Mortgage Data Report and in depth conversations with industry experts.

Stay competitive and optimize your advantage in the ever evolving mortgage landscape.

Olivia DeLancey: 00:01:19

Welcome to this month's episode of the Market Advantage Podcast. As always, I have Brennan O'Connell, director of data Solutions at Optimal Blue, joining me. Brennan, how are you doing today?

Brennan O'Connell: 00:01:31

Good. Here we are. Start of Q2 Olivia Start of Q2 Good to be talking about April.

Olivia DeLancey: 00:01:37

Yeah. So what kind of rate lock activity did we see in April?

Brennan O'Connell: 00:01:42

Well, I think before I jump in, maybe worth mentioning, we had some macroeconomic happenings that impacted the mortgage market generally. So obviously as folks know, tariffs Liberation Day to kick off April had fairly significant impacts on the bond market.

So we had sort of a whipsaw effect with rates immediately. Rates dropped precipitously.

We dropped about an eighth almost like overnight and had some pretty significant rate lock volume on the refi side early in that kind of first week of April and then leading into the second week, as quickly as we declined on rates we sort of gained it back and then some.

So rates dropped below 6.5 for the first time since October of last year in that first week and then by the end of the second week of April they were hovering around 6.9%. So pretty tumultuous. Had material impact on the origination front in terms of borrowers and originators figuring out when should they lock.

But also for those folks in the hedging side of the business, obviously this sort of volatility makes for a really difficult environment to manage pipelines. But the back half of the month a lot more stability.

There was a 90 day pause announced around the middle of the month that settled markets in and we ended up on the right side finishing about 10 bips above where we were at the end of March. 6.7 ish percent for the benchmark OB 30 year conforming rate. At the end of April jumbo rates ticked up about the same 11 bips.

They finished the month at 6.84. On the govy side, FHA and VA rates climbing about the same amount, 17 and 16 bips to 6.44 and about six and a quarter for VA rates.

So rates after initial drop by and large were kind of up and then stable. In the back half of the month volumes were up. So I think we picked up again some just sort of natural tailwinds here.

Spring purchase market we're really kind of in full swing now. So month over month we were up 3.2% overall purchase locks were up 7%.

The year over year numbers have been sticky as we've talked about for the first quarter. Unfortunately that trend continued. So on a year over year basis purchase lock volume was down 5%.

And if you look at just lock counts, which removes the impact of growing loan amounts year over year, we were actually down 7%. So just still waiting on that purchase market floor and the ensuing rebound on the refi side, not really any surprises.

With a higher rate environment, we saw declines in terms of volumes on the refi side. Rate term volumes fell 15% from March and cash outs dropped 3%. That total share of refinance volume, total production went from 25 down to 21%.

So kind of expected purchase volumes are up. Seasonal tailwinds rates cause refi volumes to shrink a little bit.

In terms of production mix, we've had this story of kind of like growing non agency business that non agency gave up a little bit of share this month. So kind of moving the other direction. About a half a percent of market share given up on the non agency side.

And FHA was the really the primary beneficiary there, picking up about a half a percent. So let's see, we finished the month conventional side conforming share was 51%. Non agency was just a bit above 16%.

And in the govy space FHA is sitting around 20%. Virginia is about 12. So again, kind of kind of normal. We've seen this now a few different times.

As rates go up, there is sort of a decline in the non agency space which is going to be larger loan amounts can be more rate sensitive.

The refi share drops for those folks and then you just see kind of like this FHA purchase, FHA and va but FHA in particular purchase market take up some of the share. So not, not totally unexpected there. And then the only other note I'd make is that we did see it kind of goes back to this last point.

down to: 3875

So that was sort of the highlights. I don't think there was any real big movements other than the kind of front half of the month macroeconomic activity that we saw.

Olivia DeLancey: 00:06:33

Thanks Brennan. It's time to welcome this month's guest we have Erin Wester. She's Chief Product Officer at Optimal Blue.

And we are so excited to have Erin, not only because we have a lot of really exciting product announcements happening at Optimal Blue this month, but also because she is such a wealth of knowledge when it comes to product management and we wanted to pick her brain on some of the things the average person maybe wouldn't know about this field. So, Erin, welcome to the Market Advantage.

Erin Wester: 00:07:03

Happy to be here. Thanks for having me.

Olivia DeLancey: 00:07:05

So just give us like the 101 spiel. What is a day in the life like for Erin Wester and her team?

Erin Wester: 00:07:12

Oh, man. Well, my team gets all the credit there. They're the ones out there doing, doing the actual work. Product management kind of in a nutshell.

We like to joke, at least in our team here at Optimal Blue, that it's chaos coordination, but really what it is is just taking in different perspectives.

Perspectives of of course, first and foremost, our customers, our prospects, our employees, our fellow co workers who work hand in hand with our customers every day and taking in all of that information, organizing it, prioritizing it, and then crafting an innovative roadmap out of all of those different perspectives.

It's kind of what it is in a nutshell, but it's a lot of different perspectives, a lot of different sifting that you need to do, fact finding, investigation, and then a lot of organization making sure that that's put out in a proper way that can be delivered and worked closely with our R and D department. Then start the actual, the fun stuff. Start actually building and creating off of R all of that different data that we've collected.

But a day in life is you work with a lot of different departments. I think that's one of the beautiful parts about product management. It's one of the few departments I feel that truly is cross functional.

You know, you're working with sales, you're working with client services, you're working with, of course, development, ui, ux, you're working with executive stakeholders. It really does give you a very wide lens into every aspect of the organization because that's what makes good product management.

Listening to every facet that makes the engine go.

Brennan O'Connell: 00:08:45

Aaron, you hit on listening a couple of times and I maybe want to double click on it from your perspective.

You're obviously listening to your team, you're listening to outside voices and then you're probably listening to your own voices in your head about what is the next thing we need to work on. How do we prioritize a laundry list of updates that all could be worked on simultaneously.

How do you think about, I guess the first question is how do you think about that process of listening and then synthesizing that into a product roadmap, which is really returning the best ROI for our clients in terms of getting them the most important functionality the soonest.

Erin Wester: 00:09:32

Yeah, I love that question. My husband's going to have a field day with the voices in my head comment. But, but besides that, that's the trickiest part.

And it takes, I think it takes experience, you know, it really takes practice to be able to refine and come to as close as perfection as you can on that. It is a lot of different voices that go into making the roadmap.

And the subject matter expertise of the product manager does play, you know, a very big role in that. And a lot of that is trusting yourself, building confidence and making the right decisions from learning from making the wrong ones.

Just like really kind of any role. Right. But that is the trickiest part. You know, it's, it can't be. The last voice you heard is the voice that you run with.

Everything kind of has weighted measures to it. For example, regulatory changes, right. Those float to the top no matter what.

And you know, whether that's fortunate or unfortunate, depending on how you look at it, you have to learn to adapt. So as things change.

And I know, as you guys know, but for those listening in, Optimal Blue operates under the scrum or the Agile methodology, meaning, you know, we work in two week sprints that go towards typically, you know, bi weekly or monthly release cadences. So things can shift and it can have an impact, but we're able to quickly adapt to that based on the development practices that we're disciplined in.

And I think outside of the experience and the confidence that the product management team builds in themselves and of course their counterparts and all those other voices that we're listening to, it's also about the discipline.

So when all else fails, if we're out there trying to sift through disruption, be that from the government, be that from internal stakeholders, be that from customers need, customer needs, prospect needs, being able to go back to the product management core framework that we use and then also the company's mission statement helps kind of guide and be that North Star to make sure that as we're shifting priorities, which is a natural thing that happens, that we're still staying true to what we've promised to our customers. And that does take just experience. And luckily we've got a fantastic experience team here at Optimal Blue.

Olivia DeLancey: 00:11:45

So, Erin, you talk about how important it is to be able to balance priorities in product management and the feedback that you're taking constantly. It's never probably possible to do everything at once. And that kind of reminded me of something you shared with me recently, this term.

I had never heard technical debt and I would love if you could explain what that is and why it's a huge part of what you and your team do.

Erin Wester: 00:12:12

Yeah, absolutely. So wish we could do all things at once. Somebody cracks the code there. Onward and upward. Technical debt, it's an interesting term.

I think a lot of people feel like it's a four letter word when it, when it really isn't, you know. Technical debt is something every technology provider incurs when their software is 24 hours old.

Technical debt is just a natural part of the life cycle. As you continue to develop and iterate your code base, everyone's got it, how you manage it, how you prioritize, evolving.

Your technical debt is, is another one of those kind of like discipline practices that you definitely want to incorporate into your product planning life cyc. And it's not a bad thing. It's just, you know, something's been deployed and then it just needs tender loving care as it continues to grow.

And that same thing's true with your code base.

We are very disciplined about that at Optimal Blue, you know, supporting the large number of customers that we support, we have to be because that technical debt becomes a part of the core framework. That's again true for every technology provider.

How you handle, how you manage to it is what makes different companies behave differently than others. And it's something we take very seriously.

We have an amazing enterprise architecture team that reports through our CTO or cber and that's a lot of things that they think about each night as well as the product management team.

Making sure we have a very good balance of continuing to deliver innovative items to our customers, to our prospects, while also making sure that our core framework is continually being elevated with the feature sets that we continue to bring in.

Brennan O'Connell: 00:14:02

It's insightful, Aaron. It's one of those things that it's like how the sausage is made that the average consumer of technology might not necessarily know.

Do you have any other tidbits, one or two other items that you'd say, whether it be folks that use the Optimal blue system, a lot of our listeners, our clients, or folks who use tech in general, which is presumably all of us. Olivia would suggest that I don't use it enough and I still operate like I'm, you know, was born Several decades earlier than I was.

But be that as it may, I do use some technology.

What should all of us who are consumers of technology, what are some things that we don't know about how the sausage is made that you think we should know?

Erin Wester: 00:14:41

I would not be afraid to ask. You know, I think it's, it's a great question that we get in due diligence from some customers. I wish more customers asked.

And it's how do you manage your development life cycle? And it's not just two week sprints like I mentioned before. That's kind of like the surface level answer. It's important.

It's a building block of that answer.

But I think as a consumer of technology from any third party provider, you would want to understand what their practice is selfishly, from a user perspective. Right on. If I have feedback that I would like to see incorporated in the roadmap, how does that process work so fundamentally? Who do I talk to?

How can I communicate that? How do I get status updates on that?

How do I understand the weights and the measurements that you put on when deciding what features are next up in the priority list? And another thing that I think would be helpful for that from an end user perspective, Brennan, like you mentioned, is just transparency.

It's one thing to ask and understand all of that at time of, you know, initial engagement with a third party technology provider, but that provider should constantly be meeting with you to be able to ensure that you understand, you know, as they're marching towards that North Star, how are they continuing to evolve? And that shouldn't take the customer reaching out and asking.

That should be a proactive measure that the technology provider presents to you at some regular cadence, you know, ideally once a quarter. So, you know, here's what they're working on, here's what I'm working on. How does my business needs the provider's plans converge?

And so I think that's a very critical part that every consumer of technology deserves to have and their providers should be giving them.

Brennan O'Connell: 00:16:31

Yeah, certainly the technology becomes critical to some business process as you described.

It's almost a requirement that they would know what was coming so that they can plan and adjust and sort of anticipate how their business processes are going to change or hopefully improve. Right. With the innovations that are coming along. We had been doing that informally in perpetuity.

We've always done it that way and now we're doing it more formally. Right. Could you dig in on how optimal blue has sort of changed?

It's probably a slight change but how we've changed to communicate our roadmap in a very formal, transparent way, just really over the last six months to a year.

Erin Wester: 00:17:09

Absolutely. Totally agree. Right.

We've been doing that more informally and now we've added discipline and rigor to that to ensure that we're doing what's best for our customers, at at least from Optimal Blue's perspective, an auditable cadence. Right. Making sure that we're meeting with our customers quarterly.

It's one of the primary responsibilities of our new client success team that launched last year, where their client success manager and the business relationship manager work closely with our customers to schedule these meetings to do just that. We're extremely transparent on what we're working on.

We have nothing to hide because we are confident and excited about what we're bringing to the market and we feel our customers feel the same way. And that's what we're hearing after being able to sit into a few of those meetings myself.

But as we mentioned before, if things change or we need to adapt or a customer doesn't see something they wish was on the roadmap, we take that back and we figure out how to make that work.

Another one of those core principles, along with the transparency and making sure everyone knows where Optimal Blue is marching towards also being able to take in that feedback, adapt to it, and just no longer saying no. Right. It's not, hey, we can't do that right now. This is a great idea.

And if this is strategic to the core principles of your business, then we will figure out how to get it done. And it's just a matter of when we can get that done. And we have those conversations with our customers, hopefully they feel heard.

We have a better understanding of what and why and how that's important to their organization. Because understanding those core components help us ensure that we're building the best software solution to meet their needs.

And those meetings have just been so beneficial, hopefully not only for our customers, but also for us, because we're able to see, what are you using heavily? What are you not using? Here's what we're working on. Does this fit your needs? If not, where are the gaps?

That's really kind of the foundation of roadmap building, understanding all of those answers.

Olivia DeLancey: 00:19:15

I would love to hear more about delivering on the roadmap. So we're talking about the transparency on the front end. I know a lot of us who have consumed SaaS technology.

Something's on the roadmap, but it never comes to fruition with different providers. We've worked with.

How do you as Chief Product officer leading a team of product managers, ensure you're delivering things on time as promised to our customers.

Erin Wester: 00:19:43

It's amazing the motivation people get when you put something on paper and out in front of people. It's dual purpose, it's dual served, right. It's transparency to our customers and it's accountability internally the moment we commit to something.

And Joe Tyrrell has a famous saying for those in the product org here at Optimal Blue, which is you've got a quarter wiggle room and none else.

And luckily in the past call it eight months and change that, we've been doing this more formally, we haven't missed a deadline and it is, it's a lot of pride goes into that on the product and the R and D side. Right. It's a two headed dragon. You know, we work together to help bring the vision to life and dream up the things that we would like to have.

And then the development team, they're the creators, you know, they make it happen and they actually get to do the actual building of those visions or of those ideals, you know, being able to work closely with them and everyone's marching towards a goal that we know all of our customers have seen and that all of our internal stakeholders have seen. That's heavy motivation to make sure you don't miss your targets. The nature of the game is, you know, things do slip from time to time.

You try and minimize that. And there's a term in Scrum methodology called a retro.

So if something were to happen, you have a retro and you have retros all along the life cycle as well. But just in relation to this question, you'd have a retro on that. Why did we miss? What were the external factors? What were the internal factors?

What can we put in place to ensure that that doesn't happen again? No one's perfect, but everyone can strive to learn from making sure you don't repeat mistakes of the past.

And the Scrum process really helps with that. But so far we're hitting the targets and we're on mark. But yeah, I think it's a lot of pride and ownership over the roadmap.

And a good PM will do everything they can to make sure that we deliver what we can on time. And there's lots of levers to pull there.

You know, there's scope you could cut, there's beta rollouts that you could run early to make sure that your features are landing the way that you intended them to land. So there's a lot of different tools in the product manager tool belt that help ensure that success.

And I think that's another area that we've really excelled at here at Optimal Blue, with the great team of product management staff members that we've got on deck across all of our product lines.

Olivia DeLancey: 00:22:11

You mentioned beta testing. I was not planning to ask this, but I can't help myself. How do you decide when to do a beta testing period and when not to?

Erin Wester: 00:22:21

Oh, very good question. Wish that one was as black and white as I could put a rubric around. Some of that is very straightforward.

If we have a brand new feature that is workflow related, that's an easy one to say. Yep, this makes sense to do a beta process on. And that's not the first time customers are engaged. Right?

At Optimal Blue, we also have a team of UI UX experts that are absolutely phenomenal and we have a research panel that our customers can sign up for. So my favorite type of customer is ones who want to be a part of every part of the product management lifecycle of delivering an item.

And it starts at that research panel. So they can actually receive surveys from our UI UX team.

They can receive interactive mockups so we can get feedback very early on in the process to make sure that we're building something that works for their customers, works for their business, you know, works for their workflows. That's critical, hyper critical to be able to, to make sure that we hit the mark early on.

Because then as we build and develop, when we hit beta, they have some background on what this feature actually provides and then can give us even more refined feedback, new features. Olivia is certainly earmarked for beta.

Anything that has some complex logic changes around it, I'll say that more on the business logic side, we've got our engine and our pricing application, lock and step. We've had that nailed down for many years. Very proud of our accuracy of our engine.

And we've got automated test cases, we've got a whole slew of wrapping paper and bubble wrap around that process that we feel very confident in.

But anything like net new that we're building out, for example, our lock extension process, we're adding some wonderful enhancements to be able to manage lock extension policies in a more granular level. And that was prime for beta testing. Hey, did we miss anything? Are there ways that we can make this easier?

And we've received a lot of great feedback from our customers on that. That's ongoing, currently and about to conclude. So very excited about that.

And I think Another good principle of our beta process is beta is truly beta. It lasts a couple weeks, four weeks, six weeks maybe max. It is not something we call half done.

Throw it out there in beta and it lives in beta for six months and then you don't know when it's coming. When we say beta, we are less than two months from general availability.

And that's another kind of core discipline practice that we put around that process.

We work closely with marketing, as you know, on go to market and making sure that the beta process is baked into that because it's a lot of logistics to manage, as you can imagine, but all for the betterment of higher quality software serving our customers in the most efficient fashion.

Brennan O'Connell: 00:25:22

Aaron, I want to ask maybe a more technical question here.

We've talked a lot about the kind of business logic and the consumability from a user's perspective, but how about more on the infrastructure side of operating the industry's largest pricing engine? Obviously we benefit.

On the data side we can see that we're processing over a third of all transactions across the industry, but that doesn't happen by accident. And there's a lot of questions that go much further than user interface related to scalability, security.

And then I guess, you know, those are maybe more general for technology and I'd love to hear your perspective on that.

And then you mentioned accuracy, but could we also double click on accuracy too as part of this and how the whole organization supports a secure, scalable and highly accurate delivery to our clients?

Erin Wester: 00:26:18

Yeah, absolutely. This is a topic I'm actually very passionate about. I spoke with Sarah Wheeler a little bit about this a few days ago.

This is something I wish everybody kind of had a really good understanding of. What software looks like to the end user is certainly important. I do not want to diminish that.

The user experience, the user interface layer is very important because that drives end user customer satisfaction. I am not trying to minimize that at all.

But that is really as Mark Gutger, who leads that UI UX team here for Optimal Blue, he likes to call it the icing on the cake. So very important. But in terms of is the cake good or not, it really doesn't have much to do with it. Right.

Everything that builds good, stable, scalable software is all what's under the hood. It's all the framework, the infrastructure that supports the UI layer, It supports all of the microservices that make the engine run.

It supports the APIs that run through the veins of our platform. And that is something that no one can speak for on behalf of another provider. That is something that the provider needs to show you evidence of.

We're in the cloud. Okay, let me get you my SOC audit. I can show you how and where we host everything.

I can show you the investments that we've made on geo redundancy to ensure uptime.

I can show you the investments we've made on auto scaling and making sure that as the market changes and the interaction or the volume on the platform changes, how dynamically we're able to react to that. And some of that stuff our customers learn.

Just being a part of the optimal blue family and living through the cyclical market mortgage all has us wrapped in and being able to see how sustainable and scalable our solution is during ups and downs. And I think that's another thing I know you guys asked earlier. What are some questions that end users should be asking their technology providers?

This is certainly one of them. What does your infrastructure look like? What does your framework look like? And that should be a cut and dry answer.

And I have documentation to back that to show you. You want to take a look at it with us? We're happy to get on the phone.

I know our CTO and our CIO would be frothing at the mouth to be able to show you all that stuff because it's something we're very, very proud of and we make a massive investment in the framework and the infrastructure is paramount and good quality code that delivers accurate results is table stakes. If you don't have that, then everything else you're building on top of it, no matter how fancy and shiny it may sound, is meaningless.

You put AI on inaccurate data, you're going to have inaccurate AI results. So it is a very strong focus for us, has been for many years, will continue to be, as all of my team knows, you know, I preach about that.

I don't, I don't care about anything. As long as we can ensure that it's accurate and compliant.

At the end of the day, all the rest of the stuff we can invest in making look better, feel better to the end user and ensure that the workflows work for our customers. Again, very important, but you have to get those base layers right to even begin to start talking about those top layers.

Olivia DeLancey: 00:29:47

So accuracy, compliance, strong infrastructure, transparency, safe to say those are some of your philosophies as Chief Product Officer.

Erin Wester: 00:29:57

Yes, I'll throw discipline in there as well, but yes, that's wonderfully surmised.

Olivia DeLancey: 00:30:02

That's great. Well, I know a few of us are headed to MBA secondary in New York next week.

Erin, including yourself, we have some exciting announcements that I won't give away yet. What are you most looking forward to in New York? Aaron?

Erin Wester: 00:30:18

Oh, I'm looking forward to talking to our customers, especially after some of our release announcements and press releases go out. I'm very excited for hopefully seeing a lot of excitement from our customers.

It's going to follow a hunt on the heels of the items that we announced at the summit in San Diego back in February. And there's just more, bigger, better things coming.

Our customers will get an earful from us about that in New York, and I'm looking forward to seeing everyone there.

Olivia DeLancey: 00:30:47

That's great. Well, I think it's, it's even though Brendan and I would love to chat with you all day, it's probably a good moment to ask you our bonus questions.

So we close out by asking every market advantage. Guess this one, Aaron. And I am so excited for your answer.

So of course you know Optimal Blue's mission is helping lenders maximize their profitability. So what is one thing, in your opinion, a lender should be doing in today's market to maximize profitability?

Erin Wester: 00:31:16

Besides using Optimal Blue, which of course would be my paramount answer?

I think the core thing that I feel like customers should really be asking themselves or technology users should be asking themselves is am I using all of the products that I'm paying for to the maximum capacity that they provide and that fits my business needs? And those should be strategic conversations that they're having with every provider that they support.

And those providers should be having, you know, very complete and very thoughtful answers to those questions. So do not be afraid to ask them. That's one of our favorite questions here at Optimal Blue.

We are eager to have those have those questions answered with our customers to be able to show them you're doing a great job utilizing 80% of our platform. But let's talk about this other 20% to see if this could really drive value.

Because when you've been around for as long as we have, we have a very deep and wide breadth of feature sets at Optimal Blue, and we want to make sure every single scrap is used for our customers. Can I bonus answer your bonus question?

Olivia DeLancey: 00:32:26

Of course.

Erin Wester: 00:32:27

For folks who have the capabilities on hand or can contract out custom API implementations to support unique business workflows or secret sauce kind of scenarios, I think really gives customers a leg up on their competition.

A vendor with a strong API platform, proven API platform, I think, is another really great way to ensure you're maximizing roi, which, of course, we've got. We've got a dedicated team on the integration side who live and breathe best practices for leveraging our APIs every day.

And they're a fantastic team, and they're happy to talk to anyone about it, even someone who's just dipping their toes in the water. What can we do? Well, we've got a whole list of use cases that we can share with you.

I think that's tapped very well in some areas of the market, but not in others. And that would be something that would be interesting for folks to look into if they have yet to do so.

Olivia DeLancey: 00:33:21

Terrific answer. Erin, thank you so much for joining us this month. And thank you to our listeners for tuning in. We will see you on next month's episode. Take care.

Erin Wester: 00:33:30

Sa.