In the 1980s a number of lenders entering the mortgage market based their business models on funding from the capital market through warehouse lines of credit. These companies securitised the mortgages in mortgage-backed securities and originated the mortgages exclusively through intermediaries.This might sound familiar but before the property crash of 1989, lenders were called centralised lenders rather than specialist lenders and most of the origination came via insurance companies and life and pension advisers. It is also interesting that at this time intermediaries didn’t receive any commission or proc fees from lenders. Their income was generated through the sale of life insurance and endowments. It was centralised lenders that introduced commission for mortgage business and set the pattern for today’s broker market. In those days the choice of system to run a mortgage business was limited but one of the options was from a company called Target. Target is still providing software solutions and services to the mortgage, consumer credit and financial services markets. It provides application processing, underwriting and customer account administration and servicing as well as debt management software. Target provides software solutions to more than 70 broker and lender operations in this country. Clients include Barclays, Commercial First, Egg, GE Home Finance Group, The Royal Bank of Scotland, The Mortgage Group and Yes Loans. The company recently acquired Bluechip Software to enhance its offering to the broker market. Target Bluechip Broker Solutions provides a web-based and networked application processing system that allows businesses to reduce the time in which a loan or mortgage application is processed. The system helps businesses manage compliance, track outstanding actions on cases, manage marketing mailshots and analyse performance and profit through a comprehensive suit of management information. Using XML data transmission, the solutions can produce feeds that map directly to a lender’s rule set. Each data field within an application is validated before it is submitted using a lender’s defined transmission protocol. In this way, a lender always receives the data they need and in the correct format to make a quick and accurate decision. Target Bluechip has also developed a mail management product to enable loan applications that are received on a lender’s website to be automatically transferred to a processing database for underwriting and then transferred to the lender’s main client processing database. The whole application turnaround time can be reduced, benefiting all parties involved in the mortgage application. The market has changed dramatically in the past 25 years. We now have distribution through specialist mortgage broking and packaging; statutory mortgage regulation; the sub-prime market and the rise of the internet as a distribution and communications vehicle. But it is comforting to see Target has stood the test of time and is still able to provide an offering to the market.
Target, one of the first companies to offer software to help run mortgage businesses, is still producing useful web-based products for the marketplace, says Frank Eve