LandSafe Inc. is on the rise.
The closing-services subsidiary of Calabasas, Calif.-based Countrywide Credit Industries Inc. completed 732,351 orders for credit reports, title orders, appraisals, and flood determinations in October, up 18.6% from its previous one-month high in August.
That helped the Plano, Tex., unit generate pretax profits of just over $15 million in Countrywide's second quarter, which ended August 31, and the performance prompted Countrywide to report the numbers for the first time.
LandSafe gets the majority of its business from Countrywide, which uses the subsidiary primarily for services on retail mortgage originations. But Michael Faine, LandSafe's chief executive officer, wants to change that.
"The ultimate goal is a 50-50 split by 2005 between external and internal business," he said.
Stanford H. Kurland, president and chief executive officer at Countrywide's mortgage unit, Countrywide Home Loans, said in an interview that the LandSafe companies "are an important part of our overall diversification strategy, and it's been a great evolution for us. They add not only to the bottom line profits of the company in a meaningful way but also add to the quality of service we provide to our customers."
LandSafe uses technology to provide streamlined closing services to mortgage lenders and brokers. Such third-party functions have seriously hampered the industry's efforts to automate the loan process.
There is no shortage of technology companies offering products to automate or streamline the third-party activities, such as appraisals and title searches. Few, however, have the support of a Countrywide, which was the fourth-largest mortgage originator in of the first half, according to National Mortgage News. Ahead of it were Chase Manhattan Mortgage Corp., Washington Mutual Inc., and Wells Fargo Home Mortgage.
Richard Beidl, a mortgage technology analyst in Needham, Mass., said Countrywide's backing should help LandSafe win business from other large lenders. The affiliation gives it "serious credibility," he said, because "Countrywide has one of the most efficient systems out there."
Most lenders would be hesitant to give core business, such as servicing, to a competitor for fear of giving up control of their business or strategic information, Mr. Beidl said. But the types of services that LandSafe offers pose no threat and can enhance another lender's performance, he said.
Mr. Kurland of Countrywide said he expects that LandSafe "will continue to expand our business with other originators, particularly our business partners," such as wholesalers and brokers, "and continue to gain share."
Many companies built technology and then tried to sell it to customers as a solution provider, Mr. Beidl said. LandSafe found out precisely what things customers needed solutions for in the first place and then developed their products.
The company is now making a push to let lenders order its services at the point of sale. Toward this end it started a partnership with Calyx, one of the largest loan-origination systems, in October.
"LandSafe uses technology to automate things that should have been automated years ago," Mr. Beidl said, things "that take a considerable amount of time on the part of manual processors."
