Systems are struggling to provide intermediaries with the services they need in a regulated market which means huge opportunities for new entrants.
One company that has seen such an opportunity is The Mortgage Portal. Launched by Brian Hall of The Hall Partnership, The Mortgage Portal is an information portal targeted at the sub-prime market. Its aim is to provide intermediaries and networks with the ability to source sub-prime products direct from lenders through accurate multi-lender sourcing services. For lenders The Mortgage Portal could provide a new distribution channel at a reduced cost. For intermediaries and networks it handles the lending policy of a number of sub-prime mortgage lenders and so enables an application to be pre-underwritten at the point-of-sale.
During the pilot phase The Mortgage Portal has collaborated with 1st Software, the provider of back-office systems for intermediaries and networks, and Dashboard, supplier of advanced mortgage packaging solutions.
The discussions with 1st Software and Dashboard are aimed at integrating their software with The Mortgage Portal, providing a sub-prime sourcing and underwriting solution for the intermediaries using these systems. It allows sub-prime intermediaries using 1st Software or Dashboard to source products from sub-prime lenders at point of sale without needing to re-key data. The Mortgage Portal claims its deployment will make onsite underwriters unnecessary, as far as it concerns routine underwriting.
The Mortgage Portal produces a prepopulated underwriting check list that confirms which rules have been applied for auditing and due diligence purposes. By linking intermediary systems to lenders’ point-of-sale technology decisions can be taken earlier.
Mortgage Portal intends to generate fees from lenders and provide services free to intermediaries. It plans to charge lenders a transaction fee per application submitted by the intermediary. It hopes to deliver competitive advantage at the point-of-sale for the packager/network and their brokers by reducing packager costs and improving service. The company, however, will need to convince lenders that the system can increase distribution without increasing costs.
Hall believes establishing links with networks and large distributors that have control over volume will prove persuasive. The industry needs an integrated solution to provide accurate Key Facts Illustrations and product information for the sub-prime market and The Mortgage Portal is endeavouring to facilitate this by a collaborative process which includes linking existing technology such as 1st Software and Dashboard to existing lender technology.
Integration of this kind is inevitable but how it will be achieved remains to be seen. Lenders have the technology and data the intermediary market needs and they will dictate the pace of change.