Technology Spotlight: Subprime Flying High Again?

*Nonconforming Is Making A Comeback*
**Quadriga Mortgage Group Profiled**

***Who said nonconforming is dead? The Quadriga Mortgage Group specializes in portfolio funding nonconforming mortgages with low loan to value (LTV) ratios on a wholesale basis, originated through licensed mortgage brokerages and other third party lending professionals. Quadriga manages a mortgage pool that is funded by private investors who are taking advantage of the benefits of investing in a diversified pool of well secured residential mortgages. To further streamline its operation and grow the company has chosen to implement the Mortgage Builder LOS. Here’s why:

****According to Sue Villa, a 30-year mortgage industry veteran and chief underwriter at Quadriga, picking a loan origination software package for the new company was not an easy task, but one made simpler by Mortgage Builder’s design concept.  Her research on LOS systems revealed that Mortgage Builder offered an “everything’s integrated” approach, including the availability of advanced electronic document management (EDM) that would allow Quadriga Mortgage to have a paperless operation from the very beginning. The portal capabilities built into Mortgage Builder allow third parties to submit loans and supporting information instantly online, resulting in faster, more efficient decisions – a great advantage when dealing with more complex loans originated by others.

****“We are a new company but one with generations of experience in mortgages and financial services,” says Ms. Villa. “We wanted an origination technology that could do everything, was already integrated with leading vendors, and would allow us to operate with great efficiency but without necessitating a huge investment. Mortgage Builder’s hosted delivery model let us open our doors with an industry-leading LOS platform while incurring costs transactionally,” she explains. “It is a very advanced, streamlined system and one our brokers will benefit from, as well.”

****Quadriga Mortgage is a unit of Auriga Holdings, a privately held investment firm based in New York City. Recognizing the demand for mortgages from borrowers with less than perfect credit, non-standard income streams or an appetite for investing in rental properties in today’s restrictive underwriting and credit environment, Quadriga Mortgage expects that its offerings will resonate well in its target markets. The company is focusing initially on California, Arizona and Nevada, with nationwide expansion planned.

****“Our model broker is a retail originator specializing in conforming loans but who wants an alternative for good loans that don’t qualify for current government and agency programs,” Ms. Villa says. “Mortgage Builder gives us great flexibility with different loan scenarios and is totally scalable.  With loans available up to $1 million on 65 percent LTVs, there is a pent up demand for us to tap and Mortgage Builder’s features will help us accomplish that.” After two to three years of steady payment history, she expects their loans to refinance into mainstream programs with other conventional lenders.

****Having a good deal of industry experience has its benefits: Ms. Villa knew exactly what she wanted and precisely what she wanted to avoid when considering an LOS system. “With all the details of a startup operation to take care of, the last thing we needed was a complicated technology implementation,” she notes. “Research told me that Mortgage Builder’s customer service was excellent and our experience has verified that their reputation is well deserved. The implementation has been very smooth and there is always someone knowledgeable on hand to help when we need it,” she says. “And that is just how we want people to describe the lending experience at Quadriga Mortgage.”

****Keven Smith, Mortgage Builder’s president and CEO, observes that while Quadriga Mortgage’s market niche is potentially quite sizeable, the larger lenders are leaving it for the smaller companies, at least so far. “We have seen the mortgage qualification pendulum swing far to the opposite side over the last few years, to where many worthy borrowers are now excluded from having access to credit,” he says. “I expect there will be numerous observers watching companies like Quadriga Mortgage to gauge their success as they serve this segment.”