When the industry (and its regulators) realized that the loans that had been originated during 2003-2007 were largely made to borrowers who probably never should have had a loan (at least the loans that eventually went into foreclosure), the nastiness flowed downhill, all the way to the brokers. Wholesale lending swiftly fell out of favor.
It appears that the pendulum is swinging back and brokers are finding more lenders willing to take the applications they send upstream. That's good news for companies that provide technologies to help brokers determine which loan programs will work for which borrowers, given the stricter underwriting guidelines lenders are using today.
For instance, Costa Mesa, Calif.-based PriceMyLoan recently announced that Mid-Island Mortgage Corp, a retail and wholesale mortgage lender on the east coast, recently deployed its automated underwriting and loan pricing engine.
"The critical factor for us in choosing a pricing engine was integration with FHA TOTAL Mortgage Scorecard," said Terri Cutting, sales manager for wholesale lending at Mid-Island Mortgage Corp. “We were happy to learn that PML completed an interface with the Federal Housing Admistration’s (FHA) TOTAL Mortgage Scorecard loan approval platform in January.”
Other providers of Product and Pricing engines (PPE) have also been experiencing success as lenders rebuild their third-party origination networks.
Earlier this month, Denver-based Mortgage Cadence, Inc., a leading provider of Enterprise Lending Solutions (ELS) for the financial services industry, announced that it has been selected by Carnegie Mortgage LLC, the wholly owned subsidiary of Grand Bank, N.A. of Hamilton, N.J., to replace their mortgage lending and document management technology platform. Carnegie Mortgage originates approximately $200 million in mortgages per month via their retail and wholesale channels, Ovation Home Loans and Icon Residential Lenders. Ovation Home Loans is the company's retail channel and Icon Residential is a wholesale lender. Product and Pricing is part of what the new platform will provide.
Last month, Calyx integrated Mortgage Pricing System's LEAP! PPE into its Point software for mortgage brokers and Sollen Technologies added its PPE to AppNavigator's loan locking tool.
"If your organization is in the mortgage industry, you can use AppNavigator to automate the process of locking your loans," says Paul Griffin, CEO of AppNavigator. "Our processes will move data from Sollen to the investor website then update your internal LOS with the lock confirmation without your staff touching the data."
It brokers are going to make a comeback, these are some of the technologies they'll be using to efficiently originate to lenders' new, tougher guidelines.