Two of the leading suppliers of mortgage software for PCs to small and medium-size banks, thrifts, and credit unions are going in different directions in the development of their programs
Florida-based Fiserv Orlando, a pioneer in converting originations programs from MS-DOS to 32-bit Microsoft Windows, sees little urgency in doing the same for its servicing programs. A major competitor, Interlinq Software Corp., on the other hand, has introduced a Windows servicing platform.
Interlinq, based in Bellevue, Wash., was late in entering the back-end business but when it finally did so two and a half years ago, the company introduced it as a Windows-based product. Yet Interlinq's front-end program remains largely text-based and the company's president, Jiri Nechleba, says it will stay that way.
The different paths-Windows for originations and DOS for servicing by Fiserv, and the opposite for Interlinq-that these two companies seem to be following is of particular interest to the industry's small and medium-size players, such as thrifts with assets of $3.5 billion or less.
Interlinq's origination installations account for 22% of the overall market, according to Jeff Lebowitz, a principal in Silver Spring, Md.-based SSP Associates, a consulting firm that publishes Mortech 98, a respected industry survey. Fiserv has 8% of the market, according to Mortech.
Interlinq ranks No. 1 and Fiserv is third. Contour Software of Campbell, Calif., a subsidiary of Santa Ana, Calif.-based First American Financial Corp., is second with 11% but it specializes in a market different from the other two companies.
The reason Interlinq leapfrogged to Windows when it introduced its servicing software was that it is much less complicated for users to operate than a DOS program. Its latest product is named MortgageWare TC.
"You're able to train customer service people in days because they are dealing with very simple, easy-to-use interfaces rather than arcane codes that have to be memorized," said Mr. Nechleba, citing one key reason for his going with Windows. Other functions are also much easier to perform in Windows than in DOS for the same reason, he adds.
Mr. Nechleba conceded that Interlinq entered the servicing market only after being pressured by the company's originations customers. "Our customers said they wanted a suite of products that would handle their needs from birth to closure rather than have to deal with the integration headache themselves," Mr. Nechleba said.
And they wanted it in a Windows-based environment, he added. But Dan Welbaum, Fiserv's senior vice president for sales and marketing, maintains that he heard a different message from his customers.
The demand to convert servicing software was mild, he said. By contrast, demand was intense by originators for Fiserv to switch its front end to a Windows environment, known in the industry's vernacular as a graphic user interface.
Therefore the changeover of that program, called easyLender, as well as making all of its programs Y2K compatible, were Fiserv's top priorities for the past several years. "We were the first to get into GUI 32-bit" for a comprehensive program, Mr. Welbaum says, noting that the product was introduced in May 1997. Asked if both the front-end and back-end systems are Y2K compliant, he shot back "absolutely." Mr. Neblecha says Interlinq's are, too.
Mr. Welbaum said his customers were much less interested in conversions for its back-end program, dubbed Loanserv. "There was not a lot of demand for it," he asserted. Nevertheless, possible conversion is being examined and could be implemented in two years, he said.
A major reason that the demand was strong for front-end conversion was that quickness and accuracy are of the essence. Lenders know that many borrowers, even after they agree to a loan with one institution, continue to shop around and may walk to a competitor if it takes too long to close a deal.
"The structure of our system minimized the amount of data entry required and that speeds up the process," said Mr. Welbaum, whose company changed its name from FIS Inc. after it was acquired in 1997 by Brookfield, Wis.- based Fiserv Inc., a provider of financial data processing systems.
In addition, Mr. Welbaum continued, lenders told Fiserv Orlando that attractive graphs that brokers could show prospects on their laptops' screens would help them win over potential homebuyers while prequalifying them.
"It helps the lender look good in the eyes of the prospective borrower," Mr. Welbaum says.
For its part, Interlinq has no intention of switching its front-end software to Windows as its research shows that the company's customers prefer its text-based system, Mr. Nechleba said. He insisted that it is faster than Windows.
"Text-based enables you to enter the data quicker," Mr. Nechleba said. For example, he added, Interlinq's research shows that experienced typists prefer using the enter key over the tab key when shifting from place to place on a page because that is what they are used to. Forcing a change would slow them down, he added.
Moreover, frequent use of a mouse would also slow typists by making them take their hands off their keyboards, he added.
Actually, Interlinq's text is augmented by two other elements: a GUI component and a browser.
GUI allows a PC operator to use a mouse occasionally to click on tool bars to activate simple functions, such as "save" or to be able to call up a calendar. The browser enables the typist to navigate from area to area, such as from the terms-of-the-loan section the to closing area, Mr. Nechleba said.
Both companies are also active in technology-based businesses that are either unrelated to mortgages or only peripherally so.
Last summer, Interlinq acquired for $5 million in cash and stock Logical Software Solutions Corp. of Calverton, Md., which produces software that manages work processes across business functions and departmental divisions by allowing businesses to tie together all of their functions.
LSS' FlowMan program is being used by 20 companies, including a Dutch pension fund manager, a pharmaceutical distributor and hospitals.
At a hospital, the program would integrate the medical records and business departments so that billing, patient care, and insurance reports can be accessed singly or simultaneously by any authorized person at any time.
"We are not knocking on doors, but we are partnering with companies who do that," said Mr. Nechleba. For example, QuadraMed Corp., of Lockspur, Calif., is licensing LSS' technology and sells it to hospitals under the QuanTIM Workflow brand name.
Mr. Nechleba adds that virtually any type of businesses could use this technology, including mortgage lenders that want to integrate all aspects of their business.
Fiserv Orlando leverages its origination technology by also offering software that customers can use to make consumer and small commercial loans. This software is in the process of being converted to Windows.
A common system for mortgage originations and consumer and small business credits enables institutions to easily cross-sell their products, Mr. Welbaum said. Homebuyers, he said, may also be prime targets for loans to finance automobiles or boats. Or they may be candidates for installment credits, he added.
A Fiserv product unrelated to mortgage lending is its Plus System, a revolving-credit processing program for private-label credit cards. This gives Mr. Welbaum an idea about extending this business sometime in the future.
"One of the things we're looking at is bank card processing," he said. "So you would see us moving to Visa and MasterCard processing."