There’s suddenly an arms race in the mortgage broker tech space.
In the last week, we’ve seen three key developments that could change how brokers manage their businesses.
The timing of it all could not be more crucial, as brokers:
(A) race to unveil digital user experiences that rival Canada’s top banks, and
(B) make their processes more efficient, to save time and money in an increasingly competitive market.
What follows is a quick look at how it’s all shaking out. I’ll close with thoughts on how to choose between these four main broker technology platforms.
The leading deal management system (DMS) by submission volume belongs to Finastra. Its Expert platform is older than the hills, but 17,000 mortgage professionals still use it. In fact, all of the providers below use Finastra’s pipes to get to at least some lenders. All told, $100 billion of mortgage applications were delivered to lenders via Filogix in 2019.
Unfortunately, Expert is not a platform you can build a business on. It doesn’t have an all-encompassing workflow management system, built-in CRM system, a consumer portal, client-side document interface, and so on.
Recognizing this, Finastra bought Doorr last week. Doorr is a two-and-a-half-year-old company that offers a slick client-facing portal, digital signatures, CRM, document management, broker workflow automations, online appointment scheduling, SMS and NOA retrieval — most of the bells and whistles needed to run a broker business, with payroll and compliance being two notable exceptions.
“This move shows we are absolutely here to stay and maintain a leadership position,” said Siobhan Byron, SVP, Technology Enabled Managed Services (TEMS) at Finastra. “It is a strategic investment.”
“We will continue to offer a free version of our [Expert] platform…which we will continue to enhance,” she adds, but clearly subscription-based Doorr will be Filogix’s marquis broker DMS going forward.
If there’s one thing that few can argue about, it’s Filogix’s dominance with lender connections. All the other platforms use its pipes (i.e., connect to its Mortgage Marketplace) to reach at least some of the industry’s top lenders. That marketplace was brilliance on Filogix’s part because it gets paid a toll virtually every time a competitor uses it.
Things to Like:
- Clout (Doorr is now backed by a company with 10,000 employees and almost $2 billion in revenue)
- Email & calendar integration
- Bank statement retrieval
- Document management (with automatic PDF creation)
- Payroll company integration (for obtaining client pay slips)
Two thirds (65%) of DLC Group brokers now submit deals through Velocity, says DLC Group CEO, Gary Mauris. That’s remarkable adoption given the platform is less than four years old and given the company now does a reported $45 billion a year in originations.
Velocity claims the most direct connections to top lenders in Canada, apart from Filogix. That’s essential for redundancy, says co-founder Geoff Willis. “When FX went down in March we redirected all submission traffic within 5 minutes of the outage,” he says, adding that Velocity handled over $4 billion in submissions over that timespan.
“We go from lead gen right through to payroll and post funding communications and reporting, without the need for a separate system,” adds Willis.
Velocity or DLC Group will also reportedly be the exclusive platform for accessing HSBC when it returns to the mortgage broker channel. We expect that announcement before year-end. Access to such an important balance sheet lender, with some of the best rates in Canada, simply cannot be overstated. HSBC is also known for its non-resident lending, a key niche where brokers are less competitive than major banks.
Things to Like:
- HSBC Partnership (reportedly)
- Staying power (thanks to its installed user base and revenue stream)
- Email & calendar integration
- Bank statement retrieval
- Programmable custom workflows with triggers (e.g., to send email or SMS at certain deal stages)
Lendesk Technologies announced today that it has acquired Finmo, a DMS used by some of Canada’s biggest brokers. In September, $2.3 billion of deals were submitted through the system ($2.1 billion in August).
Finmo speeds up the client experience by, for example, offering an ultra-user-friendly mobile application, automatically requesting the right documents to match the client’s application (a.k.a. “Smart Docs”), automatically resizing docs and converting them to PDFs.
“We are in the business of eliminating the chase by the broker,” says co-founder Greg Williamson. “Too much time is spent chasing documents and people.”
Lendesk is majority owned by Rocket Companies (NYSE: RKT), one of the largest mortgage tech companies in America. The company claims over 10,000 mortgage brokers have used its products (most of those being Lender Spotlight users).
Lendesk brings two key things to the table. First, it’s got direct connections to most (not all) top lenders. It routes to the rest using Filogix FX Link, meaning you don’t have to use two platforms to reach all prime lenders.
Second, its Lender Spotlight product is the #1 source of broker channel rates and broker lender guidelines. Spotlight is hugely popular because it helps brokers more easily find products to recommend to clients. It’s like a giant product search engine that even lets brokers search the text of lender guidelines.
While Finmo does not have payroll or CRM built in (a conspicuous omission), it does connects to other such technology providers.
Things to Like:
- Mobile app customer experience
- Smart Docs
- Lender Spotlight
- Low cost (potentially no cost) subscription
MortgageBOSS is the proprietary system of the M3 Group, used by Mortgage Intelligence, Invis, Mortgage Alliance and Multi-Prêts.
By our count, the platform has direct connections to six of the top 10 lenders with two more to come this year, says Éric Chamelot, VP Lender Relations & Lending Solutions. Like Newton and Lendesk, it connects to the rest of the lenders via Filogix, so brokers don’t have to use multiple systems for prime business.
One big feather in MortgageBOSS’s cap is M3’s National Bank partnership. NBC has one of the best HELOCs in Canada (the “All-in-One”). Only brokers using the platform can access the bank, albeit it’s limited to Quebec for now. M3 said it could not speculate on a launch date outside of Quebec.
“Things are going very well,” Chamelot says. “[NBC has seen] somewhere around $400 million in volume since we started the program [in January 2019]. We are much closer to a national launch, for sure.”
Like all the platforms, BOSS does things that no one else does, like offer an online pre-qualifier, which does a soft credit check, scans 100+ lender guidelines and tells prospects what they might qualify for. As a broker, you can share your personal pre-qualifier link/page with all your referral sources.
Brokers also appreciate its “Smart Views” feature that data mines a broker’s past deals to find clients who might be ripe for refinancing. It even estimates the refi amount they’d qualify for, complete with property value estimates, a penalty estimate based on the specific lender, analysis of current rate differentials and so on.
One thing BOSS doesn’t have is an online borrower portal with a slick document management system, like the others.
Only about 20% of M3 Group brokers use MortgageBOSS as their primary deal submission platform, says Chamelot. That’s partly because VERICO brokers are not yet able to use the platform.
What’s to Like:
- National Bank of Canada partnership (once it goes national)
- Smart Views
- Integrated CRM
- Compliance and Payroll
Ultimately, brokers want a DMS that:
- saves them processing time
- eliminates tedious repetitive tasks
- has an impressive customer portal with secure document upload
- has staying power.
That last one is key. Without a large user base to generate revenue, a software company simply cannot reinvest sufficiently in its platform – and hence, brokers can’t compete on user experience with multi-billion dollar juggernauts like the Big 6 banks.
Also vital is exclusive access to lenders. Velocity’s upcoming HSBC connection and M3 Group’s National Bank relationship could be key decision factors. In an age where clients can cross-check your offer against a dozen others in minutes, the best rates and products are paramount. Brokers simply cannot have enough access to flexible HELOCs, low-cost uninsured 1- to 4-year terms and equity-style products, which these banks bring to the table.
It may be that brokers need to use multiple platforms to get both the deal management and client-facing technology they want, plus access to exclusive lenders. This author must follow that path himself (not by choice) until one platform accesses all lenders and offers all key functionality.
For that reason, I recommend trialing each of them. Then pick the software that has the feature-set matching how you interact with your clients. And if you can help it, never join a brokerage/network that prohibits you from using the DMS of your choice.