Monday, February 13, 2012

LOS Vendor Creates Connection to Title Company

LendingQB, Costa Mesa, Calif., a provider of web browser-based mortgage loan origination technology, and FirstClose Title have entered a partnership they say will allow loan officers to save borrowers up to $1,000 on closing costs.

The partnership allows LendingQB users to benefit from instant ‘cash-to-close’ quotes with real-time automated underwriting and loan pricing, the companies said. They explained that the savings were a result of the ability of FirstClose Title to compare rates from a wide range of major underwriters and transparently present the lowest price to lenders and borrowers. FirstClose Title also guarantees the accuracy of the GFE data, protecting lenders from covering additional costs resulting from poor GFE data entry.

“We actively seek out best pricing among major underwriters to deliver pure, unaltered comparative rate quotes,” said Cynthia Waterman, president and CEO of FirstClose Title. “This allows us to present quotes averaging $500 to $1,000 below competing GFE quotes, providing lenders with a ‘cash-to-close’ advantage that makes their offer more competitive and secures a relationship with a potential borrower more quickly. It is a very powerful tool that resonates very strongly with consumers, especially in today’s cost-conscious economy.”

“As a loan origination system, our goals are to increase a lender’s efficiency and maintain data integrity,” said Binh Dang, LendingQB’s managing partner. “The software integration with FirstClose actually goes beyond these goals and has a direct impact on a lender’s ability to increase revenue. It makes lenders more competitive by improving point-of-sale pricing and increasing consumer selection.”

I have been watching Dang for some time. I sat down with him at a show last year, before his company formally release LendingQB, and was impressed with his insight into the mortgage lending business. He is correct that lenders are in a heated battle the Point of Sale and better information to borrowers quicker could mean more business to nimble originators. But is there really $1,000 that can be shaved out of the GFE? And what about the quality of the partners that can afford to operate at those reduced margins? I'll be watching this closely to see how LendingQB users fare with the new partnership and hoping to hear some stories from the borrowers who benefit.

1 comment:

Rick Grant said...

I received a nice e-mail in response to this post and some of the questions I raised. I share it with you, in its entirety, now.

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Rick - Thank you for your comments and for sharing the story with readers. You and I share admiration for what Binh Dang is doing in the industry. I agree it is a unique platform and that the insight into the needs of originators is well demonstrated within LendingQB.

I wanted to address your thoughts as well regarding service and price since it's the first thing our competitors point to when they find us working with their long-time lender clients. Ultimately the rate education required to explain how this maximum savings advantage is realized requires more than a few short sentences here.

Our many years of experience in the industry brings us to this point of being able to educate lenders and consumers, and thus enhance their transactions by telling the truth about title premiums. We know that what lenders and consumers do not know about how to shop for title rates is driving quotes up on the Good Faith Estimate and impacting the cost of mortgages for consumers. When quotes remain high, the incentive for lenders and consumers to identify lower rates is eliminated and the lowest cost cannot ultimately be realized by consumers. If you want more details I am happy to provide them for you.

As for service - my competition has historically held that if price is the focus then service must be sacrificed. In truth, processing title insurance efficiently and effectively so that the transaction is actually enhanced does not require huge margins, but it does require technology, a different cultural approach and application of new ideas and more than anything: a willingness to find new ways to reduce costs with technology and creative processing ideas, so that a title provider can actually reduce its margin per file expectations.

We are unique because we are the only provider in the U.S. that has identified ways to save consumers cash and actually pass it on to them at the table, which overcomes the temptation to retain the excess and show it on our bottom line. I think that might be why Binh chose to work with us - because we are sincere in our efforts to serve and to save, and ultimately to make a significant impact on the industry that will improve trust between consumers and providers overall.