Market Analysis: Mortgage Cadence Completes A Big Acquisition

*Mortgage Cadence Completes A Big Acquisition*
**By Tony Garritano**

***I brought you the scoop on D+H acquiring LOS Avista Solutions. I also filled you in when LOS Mortgage Builder acquired servicing vendor GCC. Today I have another acquisition scoop for you. Back in 2010 Monitor Clipper Partners made a significant investment in Mortgage Cadence. Since that time the company has used the investment wisely and rolled out several new products and services. But organic growth isn’t the only way to grow. Today I learned that Mortgage Cadence is using its new equity leadership position to acquire a major origination vendor. Here’s the scoop:

****Specifically, Mortgage Cadence, LLC, a provider of Enterprise Lending Solutions (ELS), Document Services, Compliance and Default Servicing Technology for the financial services industry, has acquired Prime Alliance Solutions, Inc., a provider of mortgage technology and related solutions to the credit union industry. Uniting these two players within the mortgage industry will position Mortgage Cadence as an end-to-end technology provider capable of supporting the top 10 banks and lending institutions along with the burgeoning credit union space, while also expanding market share in the community and regional bank arena.

****Prime Alliance and Mortgage Cadence share similar histories, culture and visions. A few years back Prime Alliance made news when it acquired point-of-sale mainstay Dexma. The decision now for Mortgage Cadence to acquire Prime Alliance was largely based on a shared passion to automate the mortgage process through rules and tasking, ultimately striving to achieve 100% compliant products. Dan Green, previous executive vice president of Prime Alliance who will assume the position of executive vice president of marketing for Mortgage Cadence. No sale price was disclosed.

****“Mortgage Cadence has been in the market for acquisitions,” said Michael Detwiler, chief executive officer and chairman of Mortgage Cadence. “Many of the deals that have happened in our space are deals that we looked at and passed on. We like the focus on manufacturing mortgages and offering zero defect mortgages. If you take the credit union space that Prime Alliance serves in aggregate, they are in the top five in terms of volume. We’ve always seen acquisitions as a growth play, but we don’t want to acquire just to tout market share. We want to acquire companies with a focus on serving their clients.”

****“We think we had the credit union space locked up. So, we wanted to get into the community bank and small lender space, which is why we bought Dexma and have now aligned with Mortgage Cadence,” added Joe Brancucci, founder, chairman, and CEO of Prime Alliance Solutions, Inc. “Today the consumer wants to be in control. We were founded on the principle of giving the customer complete transparency and the technology was built around that. Remember, the borrower owns the credit union. Now we can bring that concept to the broader market.”

****Currently, Prime+, Prime Alliance’s lending solution has been successfully positioned within the credit union and regional lending space. Prime Alliance is acutely aware of the challenges facing lenders today and knows that exceeding their clients’ expectations has been the key to their success. With the acquisition, Mortgage Cadence will be able to leverage Prime+ as a tried and true solution for this market segment, while also offering Prime Alliance’s current customer base a migration pathway to Orchestrator’s enterprise lending suit. This application combined with the new Mortgage Cadence Symphony application will enable the company to go to market with an on-demand solution built around industry best practices. Mortgage Cadence also has a more configurable solution in Orchestrator for the lender that wants a fully customized application.

****In discussing how this deal coincides with the future direction of the overall market, Detwiler said, “Historically you saw more focus on the back office. In the future you need to more effectively collaborate with your originators and LOs. You also need to enable them to better collaborate with the borrower. Collaboration is critical if you’re going to win as a lender. We believe that having the technology to document and validate the quality of the product will be key to regulators, investors looking to re-enter the market, etc.”

****“The market has changed dramatically,” pointed out Brancucci. “Credit unions are seeing their market share increase. We think that this trend will continue as consumers look for a trusted advisor. This acquisition is about offering a state-of-the-art platform to prepare the client for the future.”

****“This is about two innovative companies coming together,” concluded Detwiler. “This is about offering the best customer service. We are very optimistic about the future of the lending space. We continue to see clients look for true innovation vs. just maintaining the status quo. That’s what we’re achieving here.”

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.