Wendover, an EDS company, is introducing a new service which combines technology, back-end processes, and fulfilment in an online mortgage loan offering. It will allow mortgage lenders to outsource their online lending, reducing the capital and time needed to build a web.
“The Internet allows for radical changes to the mortgage fulfilment process, which is a cumbersome, antiquated, costly and lengthy process,” said Richard Beidl, senior analyst with The Tower Group. “Streamlining the process is the industry’s Holy Grail. By incorporating technological advances into their operations, lenders will become more efficient, thus creating true, sustainable advantage.”
The service links the lender’s web site to Freddie Mac’s Loan Prospector mortgage tools. Back-end processes, including vendor management, application processing, funding, customer service and quality control, are managed by Wendover on behalf of the lender.
“This is the result of efforts between Freddie Mac and Wendover to broaden the use of e-commerce in the mortgage industry,” said Peter Maselli of Freddie Mac. “Mortgage originators seeking new ways of reaching borrowers now have a streamlined, low-cost way to do just that.”
By 2003, mortgage lending will be the largest online credit category – accounting for almost 600,000 loans, $91.2 billion and nearly 10% of all mortgages, according to Forrester Research. The cost of Wendover’s new service is one-third to one-half the typical cost to originate a mortgage loan. These savings can be passed on to consumers, while the lender keeps the same margins.
“We view the Internet as another means to respond to consumer demand for more effective means of applying, securing, and servicing loans,” says Mark DeBenedictus, president of Wendover Financial Services. “There is a huge market for delivering processes that simplify traditional lending methods and allow organizations to reap benefits associated with web-enabled commerce.”
The service can deliver any type of credit via the Internet. The technology architecture combines Oracle’s software with hardware platforms powered by Sun Solaris and Microsoft to provide a fully scaleable business-to-business model.