Tech-Savvy Lenders

Presenting this year's list of Lenders at the forefront in using technology.

By Scott Kersnar and Anthony Garritano

What does it take to be named one of our Top 25 Tech-Savvy Lenders? Using the Internet to strategic advantage certainly is a key factor. We look first to the stats we collect for online retail and third-party mortgage lending. We pay particular attention to which lenders are setting the mark in using their websites as transaction platforms for consumer-direct and/or third-party transactions. And we also consider other ways lenders are using technology in ways that are exemplary for the rest of the mortgage industry.

Our list had to change this year due to the subprime meltdown. Many of the companies that launched with state-of-the-art technology were among the subprime specialists that bit the dust. And ongoing restructuring of the industry made us take a wait-and-see on some companies that we know are taking some unpublicized strides with technology that we hope to honor in the future. Here, in alphabetical order, are this year's tech-savvy lenders:

Allied Home Mortgage
http://www.alliedmtgcapital.com
Houston, Texas-based Allied Home Mortgage Capital, founded in 1991, is the largest privately held U.S. mortgage banker/mortgage broker. It's ApprovalExpress system goes beyond pre-qualification to return an LP approval in minutes. The company has created a proprietary system to order services in lieu of a bundled services platform. Erasmus, Allied's private SOA (service-oriented architecture) platform, has extended its reach to link branch offices and business partners to the core network through encrypted web services-driven applications. The Erasmus platform also extends LoanEZ's functionality into the Calyx and Encompass systems.

AmTrust Bank
http://www.amtrust.com
A former MT award winner as Ohio Savings, Amtrust leverages technology today to offer hybrid e-closings that can be done in 13 minutes. AmTrust has a national presence in retail banking, mortgage and construction lending, investment and insurance services. To date the lender has more than $17 billion in assets. In 1989 AmTrust purchased Palm Plaza Savings Bank in Boca Raton, Fla., and renamed it AmTrust Bank. Now, in addition to branches in the Cleveland, Akron and Columbus, Ohio markets, there are AmTrust Bank branches throughout southeast Florida. Expansion into Arizona began in 2000. And in 2007, to better reflect the company's national presence, according to the lender, the Ohio Savings name has gone away and the company is known corporate wide as AmTrust Bank.

Chase Home Financial
http://www.chase.com
Our mortgage stats division ranks Iselin, N.J.-based Chase Home Finance third highest in total Internet mortgage loan tallies, despite a 9% drop for 2006 to $42.2 billion from $46.5 billion for 2005. Chase ranked no. 2 in online retail originations at $7.3 billion for 2006 and no. 3 in online third-party originations at $34.9 billion. Our sources say Chase, like Wells Fargo, continues to make progress in leveraging service-oriented architecture to put all its systems on a single platform for imaging, compliance, pricing and other functions. The ChaseLoanCenter, architected on the Dorado Enterprise Lending System, gives Chase brokers and employees an integrated platform for loan origination and processing

CitiMortgage
http://www.citimortgage.com
At $44.7 billion, St. Louis, Mo.-based CitiMortgage ranked second in overall Internet originations for 2006. $43.5 billion of that was in third-party originations, where it also ranked second. Citi will significantly beef up its online wholesale tallies and take a big jump from its 2006 no. 15 spot for online retail originations as a result of its acquisition of ABN AMRO Mortgage. While online business dropped 22% for ABN AMRO in 2006, it still chalked up $28.4 billion and ranked no. 8 in overall online originations. Citi claims the distinction of being the first lender to launch Fannie Mae's Desktop Originator "Link to Lender" feature enabling brokers to submit loan data directly from DO to the CitiMortgage wholesale website.

Countrywide Financial
http://www.countrywide.com
Calling itself a technology company that does business in the mortgage world, Calabasas, Calif.-based Countrywide makes no secret of its view of itself as the top mortgage lender online and off. For the single month ended May 31, 2007, Countrywide's mortgage loan volume totaled $44 billion, an increase of 15% over May 2006. The company's mortgage loan servicing portfolio grew to $1.4 trillion, an increase of $214 billion from May 31, 2006. Countrywide has been a long-term leader in finding ways to automate the mortgage-creation process. This past year Countrywide joined MERS in actively pushing MISMO to add a category eight SMART Doc combining XML and Adobe PDF.

E-Loan Inc.
http://www.eloan.com
Now a wholly-owned subsidiary of Banco Popular North America, Pleasanton, Calif.-based E-Loan Inc. has been a trend-setter in Internet consumer-direct mortgage lending since the early days of the dotcom revolution. In 1Q 2007, for the third consecutive time, E-Loan received the highest overall rating "for online best practices implementation" in the Keynote Scorecard for mortgage websites. Moreover, The Customer Respect Group. E-Loan offers superior Internet access to mortgage, auto and home equity loans. To that mix E-Loan has added motorcycle loans, SBA loans and student loans. Over the past year E-Loan has made significant progress toward implementation of e-signatures and a paperless back office.

EverBank Financial Corp.
http://www.everhomemortgage.com
When Jacksonville, Fla.-based Alliance Capital Partners changed its name to EverBank Financial Corp., its primary operating units were branded as EverBank and EverHome Mortgage Co. In May 2007 the lender increased its asset base to $7 billion through its acquisition of NetBank's direct banking and small business financing divisions and intended purchase of NetBank's mortgage servicing portfolio. In addition, EverBank expanded its reverse mortgage capabilities through the purchase of and repositioning of BNY Mortgage Co. and augmented its commercial real estate lending group with assets of the Apartment Lending Group. EverBank uses Dorado's ChannelMaster Home Equity and SourceMaster to automate consumer-direct home equity loans via the Internet.

Fairway Independent Mortgage Corporation
http://www.FairwayIndependentMC.com
Headquartered in Sun Prairie, Wisconsin, Fairway Independent Mortgage Corporation is a full service mortgage broker and banker. Fairway provides a wide range of mortgage loan products, including conventional, FHA, VA and construction loans. Fairway is approved with over 130 top lenders. With over 100 branches in 40 states, Fairway ranks among the top 10 mortgage brokers in the nation, according to Broker Magazine. The company utilizes a single database architecture that captures every detail of customer, loan, and process information through built-in management dashboard and reporting tools. Decision makers can access real-time key performance indicators and pre-built reports as well as employ a user-friendly interface to design custom reports. Administrators can define rules to determine who can use certain features of the solution, who can access certain loans and data, and what happens next in your business process. Having this level of control minimizes the risk of processing delays and reduces operating costs.

First Houston Mortgage
http://www.firsthouston.com
Forget the ongoing debate over SMART Docs vs. PDF, Houston, Texas-based First Houston is agnostic. What makes this midtier lender unique is the fact that they have embraced total e-mortgages and they deliver the e-note as either a bulk PDF to Countrywide or as a Category One SMART Doc to Fannie Mae. First Houston is currently licensed in 16 states and is a full-service lender. Specifically, First Houston offers traditional fixed mortgages, balloon mortgages, LIBOR adjustable rate mortgages, construction loans, jumbo loans and VA and FHA loans. All loan products are capable of being fully completed through the Internet and can be securely closed using electronic signatures. First Houston won the 2006 Lending Tree customer service award.

First National Bank of Arizona
http://www.fnbaonline.com
These days the prosperity of most lenders is tied to their choice of technology partners. In that regard First National Bank of Arizona stands out. A case in point is FNBA's relationship with Epitome Systems. Epitome's on-demand technology was used to create an end-to-end mortgage post-closing solution for FNBA that Tower Group used as a case to document impressive ROI including speedy implementation, 40% reduction in file delivery time, 90% reduction in manual operations, 100% tracking of file management processes and other benefits. Also, FNBA is partnering with Accenture in a BPO relationship to automate post-closing.

FlagStar Bank
http://www.flagstar.com
Troy, Mich.-based Flagstar Bank is famed in the mortgage industry as a pioneer in creating a paperless back office. A wholly owned subsidiary of Flagstar Bancorp, Inc., Flagstar originates mortgage loans nationwide through 72 home lending centers in 18 states and a network of approximately 6,000 active brokers and correspondents across the country. Our figures show Flagstar ranking ninth in 2006 for online third-party originations at $16.2 billion. Via its Digital Document Transfer platform, Flagstar has partnered with a host of vendors and partners to develop and implement standards-based electronic document exchange to enable transfer of loan documents in a single-click or automated process.

GEM Mortgage
http://www.gemcorp.com
Founded in 1986, GEM Mortgage is a midtier lender with over 40 branches in four states, California, Washington, Arizona and Nevada. GEM specializes in single-family and one- to four-unit multi-family properties. The lender is approximately 90% retail, 10% wholesale. GEM works with 22 investors and originates in excess of $140 million a month. Back in 2003 GEM had a storage issue because the company is required to keep its loan files because it is licensed by the Department of Corporations. This issue became an advantage as the lender went with Advectis' BlitzDocs tool for not only storage purposes, but as a way to go paperless. Currently 100% of GEM's production goes through BlizDocs and they use the network for origination, image-based underwriting, post-closing and investor delivery.

Homecomings Financial
http://www.hfwholesale.com
Minneapolis-based Homecomings Financial touted that it went paperless late last year using Advectis' BlitzDocs tool. Homecomings' imaging solution offers a secure collaborative electronic loan folder that is accessible simultaneously by the broker, underwriter and account executive. With each new application, the broker creates a loan folder, uploads, scans, or faxes in the documents, and submits the file to the branch for underwriting. The branch underwrites the loan and requests any additional conditions from the broker. When the broker submits new documents, the underwriting staff is automatically notified. The company also offers Assetwise Direct, an automated loan evaluation system, Quickwise, a product and pricing scenario tool, that does online pricing and locks, and the utilization of AVMs (automated valuation models) in lieu of property appraisals for certain mortgage products and transactions.

HSBC Mortgage Corp.
http://www.us.hsbc.com
In a time of turmoil, HSBC Mortgage Corp., Depew, N.Y., experienced a 63% increase in its online originations last year to $8.6 billion, from $5.2 billion a year prior. That good fortune rolled into this year, where its first quarter 2007 online originations came in at $2.3 billion, 10% above its first quarter 2006 tally. HSBC is consistently ranked among the top mortgage companies, servicing over 429,000 first mortgages in excess of $68.8 billion and over 121,720 home equities in excess of $3.5 billion. HSBC Mortgage Corp., a wholly owned subsidiary of HSBC Bank USA, N.A., is a member of the HSBC Group, which is one of the largest banking and financial service organizations in the world.

Impac Mortgage Holdings
http://www.impaccompanies.com
Irvine, Calif.-based Impac Mortgage Holdings touts its g2 Technology gives its TPOs advanced business solutions with an automated underwriting and lending system. Specifically, g2 provides a platform for origination, processing and closing loans, integrated vendor services, and custom pricing capability. The system can be private labeled. In terms of features and functionality, g2 includes an automated underwriting system with custom pricing, custom guidelines including alt-A, flood, AVM, title, M.I. and appraisal Interfaces, LOS Imports to Calyx, Contour, Genesis, Encompass and DU, seamless backend interfacing and integrated vendor services. The company made headlines recently with the acquisition of Pinnacle Financial.

IndyMac Bank
http://www.indymacbank.com
IndyMac Bank, Pasadena, Calif., saw its third-party online originations climb by 26% last year as compared to one year prior, making it the No. 1 third-party online origination with a tally of $44.9 billion. The lender's total online originations soared by 29%, coming in at $46.9 billion, enough to make IndyMac to top online originator overall in 2006 as well. And in the first quarter of this year it has continued this trend with a 23% increase in its overall online originations from Q1 2006, climbing to $13.7 billion from $11 billion one year prior. Indymac is committed to becoming a top five mortgage lender in the U.S. by 2011.

Navy Federal Credit Union
http://www.navyfcu.org
Since 1933, Navy Federal Credit Union has grown from seven members to over 2.8 million members. And since that time, the organization's vision statement has remained the same: "Navy Federal Credit Union will perform with such excellence that all present and potential members will choose Navy Federal as the preferred source for their primary lifetime financial services. You can leave the military, change employers, move, retire, get married-and never have to leave Navy Federal. Once a member, always a member." Technology has been a big part of how Navy Federal has gone about executing on that vision statement. Navy Federal was an e-mortgage pioneer having been among the first to deliver an e-signed e-note to Fannie Mae. The organization took a step back to automate the point-of-sale and hopes to rollout a complete e process from start to finish this year.

NovaStar Mortgage Inc.
http://www.novastaris.com
NovaStar expanded its correspondent lending channel with the release of NovaStar IS, a proprietary AU system. NovaStar delivers products ranging from alt A, to non-conforming to subprime. The lender boasts that NovaStarIS, its second-generation Internet-based automated underwriting technology, greatly expedites the underwriting process. One simple input screen produces multiple loan approval scenarios to streamline loan submission. NovaStar recently received a $48.8 million investment by MassMutual and Jefferies Capital Partners as part of a commitment to raise $150 million in new equity.

Prime Alliance Solutions
http://www.primealliancesolutions.com
The conglomerate of prominent credit unions, Fannie Mae and Dexma technology, has paid off for Tukwila, Wash.-based Prime Alliance. This year they sought to push the envelope further by joining with MortgageClick to introduce their "TestDrive" program to allow new members to try their technology for free for a limited time. With its special Fannie Mae relationship,Prime members can now document a loan with only the information required by the Desktop Underwriter findings. This simple change allowed for a member to apply for a loan via the Internet, over the phone to a call center representative, or in a short face-to-face meeting and receive a commitment at that time.

Quicken Loans
http://www.quickenloans.com
Once again, Quicken Loans, Livonia, Mich., took the top spot among online retail lenders. In 2006 they brought in $14.7 billion in retail online originations, a 13% increase over a year prior. Overall, the lender was among the top 10 online originators in 2006. And in the first quarter of this year Quicken Loans brought in $5.5 billion in online volume, a staggering 95% increase over the same time one year prior. Going forward, Quicken is poised to tackle full e-mortgages this year. In terms of Quicken's overall technology leadership, it touts that it pioneered the use of electronic signatures on disclosures, a technology it will push to closing documents this year.

Silver Hill Financial
http://www.silverhillfinancial.com
Silver Hill Financial LLC, now a member of the Bayview Lending Group, specializes in small-balance commercial loans from $100,000 to $1.5 million based on the credit-worthiness of the principal borrowers. Silver Hill turned to service oriented architecture in its quest to develop a single system in-house as an enterprise system for all its business units. Silver Hill has built a patent-pending rules-based LOS system called Flagship that leverages SOA specifically for its small-balance lending niche. The system interfaces with the company's real-estate valuation system and capital-market securitization system.

SunTrust Mortgage
http://www.suntrustmortgage.com
Slow, but steady progress has made SunTrust a success story worthy of note. The lender's third-party online origination climbed by 18% between 2005 and 2006 to come in at $16.2 billion. Similarly, the lender's retail online originations over the same time period inched up by 1% to come in at $2.9 billion. In 2005 SunTrust was ranked No. 9 among the top online originators, and in 2006 it almost broke the top five, coming in at no. 6. This is significant because overall online originations were flat between 2005 and 2006, and overall third-party online originations fell by 2% during that same period. In the second quarter of this year SunTrust earning rose by 9% compared to 2Q 2006.

Thornburg Mortgage
http://www.thornburgmortgage.com
Santa Fe, N.M.-based Thornburg Mortgage attributes its recent expansion, in part to its business strategy of relying heaving on leading-edge technology. The lender uses Mortgage Cadence as its core system and has built proprietary technology around the system in order to make significant strides this year. First, Thornburg rolled out a new jumbo fixed option ARM product. The loan product is geared toward lenders with a high cash flow, jumbo and super-jumbo borrowers, carries a fixed-rate period of up to 10 years and a 15- to 40-year term. Second, Thornburg sought to tap emerging markets by introducing a foreign national loan program.

Wachovia
http://www.wachovia.com
Overall, 2006 was a good year for Charlotte, N.C.-based Wachovia. The lender saw its online retail originations increase by 243%, as compared to one year prior, coming in at $1.2 billion. In total, Wachovia ranked among the top 15 online originators overall in 2006. Specifically, Wachovia originated $4.2 billion online last year, a 64% increase over its 2005 tally. For Wachovia, they're smart technology decisions have led to financial success this year. The lender experienced double-digit growth in earnings in the second quarter of this year. The lender was also in the news recently for acquiring Golden West.

Wells Fargo
http://www.wellsfargo.com
In the first quarter of this year Wells Fargo, San Francisco, saw its market share come in at 9.04%. The lender remains the top residential originator below Countrywide, which had a market share of 15.3% in the first quarter of this year. But despite Countrywide's reliance on proprietary technology, Wells Fargo has looked to industry standardization as a differentiator. The lender has embraced Category One SMART Docs and piloted an e-mortgage strategy with Freddie Mac last year. Wells has successfully sold several e-mortgages to the GSE to date and is currently looking at scaling the strategy so that it can offer similar benefits to its correspondents. Only time will tell whether embracing industry standards over proprietary technology will enable Wells to overtake Countrywide.