As the business continues to shift, what have been viewed as traditional mortgage lenders (brokers working for wholesale lenders selling product directly to Wall Street) have given way to what we used to call traditional mortgage lenders back before the S&L crisis. Community banks, savings & loans and credit unions are now finding more home loan prospects asking for service. These borrowers don't have all that many other options in the market today.
Because these new lenders haven't built their operations around the home loan product, many are finding it expedient to outsource some or all of the lending function to third party origination firms that take the application, process the loan and close it in the institution's name.
Dexma has been working in this area for many years under its PrimeAlliance brand. Recently, more companies are getting into this business.
While few companies exist that can take the loan transaction from end-to-end, alliances are making it possible for those firms that specialize in various parts of the deal to come together and form good solutions. A case in point is the recent alliance between MRG Document Technologies, Dallas, and Boca Raton, Fla.-based Lydian Data Services.
According to the companies, their new alliance will provide an end-to-end outsourced mortgage lending solution to any institution that hires them. Specifically, the alliance enables MRG to extend its Miracle document preparation system to customers of Lydian's origination fulfillment center who use Lydian's outsource capabilities to supplement or replace their own internal processes.
Through a new interface, Miracle upfront and interim disclosures as well as closing documentation are available directly from the Lydian Exchange Network, an offering that unites lenders and industry service providers.
We can expect to see more alliances like this in the future, primarily between companies that have been working together on deals for some time. The only difference now is that there is no monoline mortgage banking firm in the middle pulling all of the pieces together. The vendors will have to find ways to come together on their own to provide a more complete solution for institutions that don't have as much experience in the business but that now find themselves with business aplenty.