3 Reasons Ellie Mae Is a Buy

The U.S. housing recovery is definitely under way.

The census bureau and Mortgage Bankers Association both reported that new home sales, existing home sales, and new housing starts all had double-digit gains in the fist quarter of 2013 when compared to 2012. The S&P/Case-Shiller Index showed that home prices were up by double-digits as well. Years of pent-up demand might finally be releasing into the market.

That said, there are a few new hurdles that could slow the road to recovery. Regulations imposed by the Dodd-Frank Act and disclosures required by the Consumer Financial Protection Bureau are making it increasingly difficult for institutions to make compliant loans. Especially in a timely manner.

Therein lies the opportunity. Mortgage originators can see the signs of increasing demand, but regulations are making it harder for them to issue those new loans.

Rule Breakers analyst Simon Erickson believes Ellie Mae (NYSE: ELLI  ) , an innovator in the mortgage industry, could be in a perfect place to capitalize on the situation. In the video below, he presents three reasons he thinks the stock is a buy today.

The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

 


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