IBM Forms New Loan Fulfillment Services Company To Specialize In Mortgage Origination Services
IBM(NYSE: IBM) has announced the formation of a new business unit, which will specialize in mortgage origination services.
IBM Lender Business Process Services, Inc. (LBPS), a wholly owned subsidiary, will enable mortgage lenders to replace the fixed costs associated with typical loan fulfillment operations with a variable cost framework, freeing up lenders to focus more on providing better personal service and support to consumers.
The new unit will offer a full range of lending services, including loan application, underwriting, processing, vendor management, document preparation and loan closing.
LBPS will provide top tier lenders an opportunity to utilize leading edge technology and processes much more economically. For others, especially mid-size and smaller lenders, LBPS will provide an opportunity to tap into a superior capability that otherwise would be too costly to develop and maintain. In addition, LBPS will enable new entrants to the mortgage market to improve focus on their brands, products, business rules, and customer experience while benefiting from LBPS’ scale and process expertise.
By delivering automated solutions based on open standards and Service Oriented Architecture (SOA), the new unit will help U.S. lenders achieve improved back-office efficiencies in a highly cyclical industry.
“There is a fundamental shift in how the mortgage industry uses technology and automation to achieve the kinds of efficiencies required to thrive in the new lending economy,” says Af Assur, general manager, IBM Mortgage Origination. “Lenders need a partner like IBM who can invest to automate the total loan fulfillment supply chain on their behalf, to give them the competitive advantage they need. By integrating fulfillment and imaging technologies, proven processes and highly experienced lending professionals, we will deliver the automation and digitization necessary to help achieve the loan fulfillment efficiencies and service required for success.”
The cyclical mortgage market is placing mortgage lenders under pressure to manage an inherently high-cost, labor-intensive process. Lenders are challenged to achieve scale in a fixed cost structure environment that adversely impacts lender profits as the housing and interest rate markets fluctuate. In addition to delivering fast and flexible mortgage products tailored to their customers’ individual needs, lenders must also ensure that their loans are correctly priced, include only the appropriate fees, generate all required documents and fund within a timely manner. Lenders must also still remain competitive within the context of a rapidly changing and more stringent regulatory environment.
Leveraging Technology, Process and People to Drive Value
IBM has invested in the expertise, processes and technology to deliver automated, standardized processes for the lending industry:
Standards-based, SOA platforms such as FileNet and Palisades Technology Partner’s Impact Loan Origination suite;
Well-defined and scalable processes for loan fulfillment;
Seasoned fulfillment personnel armed with cutting-edge technology tools;
Automated and digitized processes that allow parties to the transaction to act in real time. Digitization of key data also allows for greater underwriting vigilance and higher quality, more compliant loans to the secondary market, ultimately helping to improve lender profitability and customer satisfaction.
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