Terms of the deal were not divulged.
In a release, Brian K. Fitzpatrick, president and CEO of LoanLogics, says the acquisition will enable the company to move its LoanDecisions eligibility and loan pricing solution more deeply into the secondary market.
‘It's an investment that advances the capabilities of LoanDecisions to meet changes in the mortgage market,’ Fitzpatrick says of the strategic acquisition. ‘It gives us additional capability in the secondary marketing and risk management side of the business.’
Les Parker, who will report to Fitzpatrick and assist him in strategic initiatives and growth of the business, says the acquisition will enable LoanLogics to broaden its product base and mortgage industry expertise.
‘The aim is to combine proven products to create a better customer experience,’ Parker says.
‘Customers and their regulators don't want black box answers,’ Parker adds. ‘They want analytics where the results and inputs can be explained and understood. They want powerful pictures of risk to gain support for change.’
As the release points out, larger banks have been selling off their servicing rights as mortgage rates increase and refinancing volume drops. Some simply don't want to deal with servicing anymore due to the risks associated with increasing regulatory compliance. As a result, smaller lenders and servicers are buying up these servicing portfolios, as they rely on revenue from servicing during periods when loan origination dips.
As Fitzpatrick explains, these smaller firms will need advanced analytics capabilities in order to run their servicing business and meet compliance. Many of them simply do not have the infrastructure to perform analytics on mortgage servicing portfolios.
‘They need tools to be able to value their mortgage servicing rights, and we anticipate significant growth in that area because more firms are in the business, and there will be an increase in transactions as a result,’ Fitzpatrick says. ‘As they acquire more servicing, they have more analytical needs relative to mortgage servicing rights, and LoanHD is a performance analytics platform that will track and measure risk for them.’
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