The developer of a loan-origination-system has been acquired, creating a service provider with a huge market share. But another firm hopes to increase its share of the LOS market by making its technology available on smart phones.
The acquisition of Del Mar Datatrac Inc. by Ellie Mae has been completed, a news release Monday indicated. The deal called for a $17.2 million cash payment at closing and another $8 million in cash payments over the next three years.
Del Mar’s origination software is reportedly used as a core operating system by more than 200 mortgage lenders. The system processes and fund loans, creates workflow efficiencies and manages secondary marketing transactions. It also handles reporting and business intelligence.
Del Mar’s customer base is expected to fund a half-million mortgages this year.
“The acquisition accelerates Ellie Mae’s growth strategy by expanding its already extensive lender customer base, significantly increasing the number of mortgages funded by its customers, and broadening the functionality of its Encompass solutions,” the announcement said.
More than 20,000 users could be added to the Ellie Mae Network as a result of the acquisition — bringing the combined operation’s market share potentially to 30 percent of all residential originations.
Ellie Mae’s mortgage management software, Encompass360, already has more than 50,000 users.
The first of two major upgrades to Encompass planned this year was unveiled last month. Compliance upgrades were among the first round of improvements.
“In the mortgage technology industry today, bigger is indeed better, as it takes significant development resources to meet client demands for loan quality, compliance and efficiency,” Del Mar President Rob Katz explained in the statement.
Katz was named executive vice president of product strategy at Ellie Mae.
Del Mar will maintain its San Diego base. Its chairman, Jeb Spencer, has joined Ellie Mae’s board of directors.
Another LOS provider, ISGN, said last week that it plans to launch the Catapult Mortgage Origination System. The system can be accessed through smart phones as well as personal computers.
ISGN previously acquired LOS providers Diamond and MORvision. However, Catapult is the firs LOS built by ISGN.
In other recent LOS news, American Bankers Association subsidiary Business Solutions said in June that it extended an alliance with Mortgagebot. More than a thousand financial institutions reportedly use Mortgagebot.
In May, Mortgage Builder Software rolled out digital document management capability. The Southfield, Mich.-based service provider said response to the update was “tremendous.”
