While originators are contending with lower mortgage volumes and servicers are battling higher delinquencies, some parts of the mortgage lending business are doing relatively well. That's one of the messages I took away from MBA Tech last week.
In particular, those firms that rely on technology to aid lenders and servicers in getting transactions complete (compliance checking, doc prep and delivery, e-signature, etc.) are doing fairly well. While their fee per transaction may be much lower than the originator's their costs are also much lower.
Yesterday, DocuSign, Seattle, released news that it has surpassed 8 million e-signatures delivered, more than 70 percent of which were completed during the last 12 months. This echoes what I learned at the recent eLynx IdeaWorks conference in Las Vegas and what Tony Garritano, editor of SourceMedia's Mortgage Technology magazine, said in a recent column.
“During these uncertain economic times, customers are only purchasing technology that offers immediate profitability improvements without up-front capital investments,” said Matthew J. Schiltz, CEO and president of DocuSign. “DocuSign is a perfect fit for companies since we offer immediate, positive impact and because we are a software-as-a-service (SaaS) there is no capital investment required. Our rapid growth is also due to the fact that in uncertain times smart companies embrace transformational technologies like DocuSign.”
MISMO standards and industry-wide support for SOA have made it easier for settlement services companies to offer Web Services to lenders and servicers, saving them the cost of developing the software or delivery infrastructures themselves. These developments, along with tightening margins and increased competition for fewer borrowers using fewer loan programs, have increased adoption of electronic signatures, something vendors have been waiting on for years.
Robert Nilsson, VP of marketing for Cincinnati-based eLynx agreed that eSignatures are finally getting traction. The company offers eSignatures as part of its electronic document delivery offering. "In 2007 alone, we processed over 12 million financial contracts."
eLynx maintains a counter on its Web page that indicates it is currently approaching a milestone of its own, 2 billion electronic pages delivered.