Partnership Between LOS Providers Underscores New Origination Reality

The industry downturn has had a curious effect on some of the nation’s largest origination technology providers — once comfortable to operate on a separate, stand-alone basis, many LOS platforms are now finding comfort in banding together with other, similar technology providers in an effort to lock down what business yet remains in the decimated origination space. Partnerships have become a near-daily occurrence in a side of the industry that once was so large that it even fostered its own technology-centric magazine. Mequon, Wis.-based online point-of-sale LOS provider Mortgagebot LLC and Fla.-based Harland Financial Solutions Inc., a financial software solutions provider that offers an origination platform of its own, are the latest to announce a strategic partnership that, in better times, wouldn’t be likely merit a press splash. But these aren’t better times. In a statement Tuesday, both firms touted the partnership — which will see Harland Financial recommend Mortgagebot PowerSite to its customers “as a preferred solution,” and vice versa — as an outgrowth of the emergence of the Internet channel in originations. Which is likely true, to some extent; HW covered a recent study by Deloitte LP that identified online originations as the next competitive frontier for lenders looking to secure market share. “To compete successfully in the Internet age, our clients are extending their mortgage businesses onto the Web,” said J.R. Clemons, president of risk management and compliance solutions for Harland Financial Solutions. “This alliance enables us to readily offer one of the most advanced mortgage-application technologies and further support our clients’ efforts to enhance the loan-origination process by taking advantage of the online mortgage channel.” The PowerSite product serves as a lender’s mortgage Web site, taking applications directly from consumers “24/7/365;” and enabling branch, call center, and other “non-mortgage” staff to take error-free mortgage applications, with minimal training. The partnership with HFS enables PowerSite users to implement automated integration software that automatically transfers application data collected by PowerSite to Harland Financial Solutions’ mortgage solution and loan documentation products, including its well-known Interlinq platform. But for all of the industry buzz around Internet-based loan origination, it’s equally true that this is a partnership that already existed well before a press statement was issued. More than 125 Harland Financial Solutions clients already use the Mortgagebot PowerSite solution to handle consumer-direct loan origination management, the companies said. The decision to tout what in all likelihood was an existing relationship underscores the new reality in mortgage origination: lenders are increasingly looking for single-source providers. And, in tough times, there is clearly strength in numbers. Origination executives that have spoken with Housing Wire have spoken about origination practices at many smaller to mid-size operations during the recent boom cycle: most were described as having disparate systems as LOS platforms and related technology vendors focused on a piece-meal approach to managing the loan process. As the industry has since contracted, and competition has heated up for fewer potential customers — and as lenders are aggressively looking to streamline the origination process, as well — many of the integration efforts across platforms that were once par for the course during the boom are becoming formal partnerships between origination tech firms now looking to ensure they can offer the end-to-end LOS that customers are increasingly demanding. For some, that means working to buy or build a complete solution. For others — Harland and Mortgagebot among them — it means marketing partnerships that can position multiple technology providers as effectively offering the same end-to-end functionality. Given Mortgagebot’s market position as an online point-of-sale LOS, and Harland’s Interlinq platform which essentially does everything but online POS, sources told Housing Wire Wednesday morning that the partnership is one that makes sense. “Both companies complement the technology offered by the other, and both are very well known in the particular part of the origination process they serve,” said one source, a bank executive that asked not to be identified by name. “It’s probably easier to co-market a joint solution than it is for either to attempt to expand functionality more organically, especially given the experience both already have working with each other.” For more information, visit http://www.harlandfinancialsolutions.com and http://www.mortgagebot.com.