Lender's Service Inc. is expected to announce today that it has acquired AssetLink Financial Corp. of Golden, Colo.
The deal would make the Pittsburgh company the first subcontractor that can handle the entire origination process for lenders. AssetLink would add post-closing services to the menu that Lender's Service offers to home lenders.
Lender's Service already provides appraisals, title insurance, flood insurance, and closing services. Its clients include such heavyweights as HomeSide Lending, Fleet Mortgage Group, and PNC Mortgage.
With interest rates rising, contracting out loan processing functions will probably appeal to lenders as "an interest-rate-cycle hedge," said Joseph J. Murin, president and chief executive officer of Lender's Service.
The refinance boom is over, and some lenders have already announced staff cutbacks. Many lenders are making "a conscious effort to minimize fixed costs," Mr. Murin said. "You don't want the risk of using manpower when you have a downturn in the cycle like now."
The company is also building an automated loan processing platform designed for lenders who take applications over the Internet or have "portfolio retention" units. Portfolio retention units identify customers likely to refinance and work with them to prevent them from going over to competitors.
The platform will be designed so that lenders can transmit information to it over the Internet with no special requirements, Mr. Murin said.
Lender's Service started in 1967 as an appraisal manager. In the 1980s it moved into title insurance, and in 1989 it was purchased by Prudential Home Mortgage.
After Norwest Mortgage bought Prudential Home Mortgage in 1996, Merrill Lynch bought Lender's Service.
Management bought the company from Merrill last year, but the investment bank still has a minority stake. Desai Capital Management Inc. of New York owns the majority.
The next step for Lender's Service would be to acquire a default company that handles foreclosures, bankruptcies, and sales of foreclosed properties, Mr. Murin said.