Merger Proves That The Standalone PPE May Be Dead

*Merger Proves That Standalone PPEs May Be Dead*
**By Tony Garritano**

TonyG***In the past 12 to 18 months we have seen a slew of product and pricing engines (PPEs) get acquired. To name a few, Calyx acquired Loan-Score Decisiong, Ellie Mae followed by acquiring Mortgage Pricing Systems, Mortgage Builder acquired LXE, PPE Optimal Blue acquired competitor Sollen and earlier this year San Francisco-based private equity firm Serent Capital invested in Optimal Blue. Are there any standalone PPEs left? Now I heard yesterday that NYLX has merged. Here’s the scoop on that deal:

****Aklero Risk Analytics Inc., a provider of loan quality management software and services via automated data and document validity assurance, and NYLX have signed an agreement to merge. The combined company will be called LoanLogics and boasts that it has 450 clients and over 20,000 users.

****LoanLogics amounts to an Enterprise Loan Quality and Performance Analytics Platform that aims to enable lenders, investors, servicers and counterparties to improve loan quality, validate compliance, improve profitability, and manage risk, during origination, sale and servicing of loan assets.

****LoanLogics management team is comprised of senior managers from Aklero and NYLX as well as some new industry recruits. Howard H. Conyack, founder and CEO of NYLX, will serve as chairman and founder of LoanLogics. Brian K. Fitzpatrick, CEO of Aklero, will serve as President and CEO of LoanLogics.

****Howard H. Conyack, Chairman of LoanLogics stated, “Both NYLX and Aklero have had a vision to truly address the need for better quality loan data and greater transparency and reliability of loan assets through the life of the loan. Independently we were making progress, but together we will have the talent and technology to achieve this goal more quickly and with greater impact.”

****“The merger of Aklero and NYLX enables clients to benefit and gain the advantages of a seamless solution that reduces risk and formally tracks and reports on loan quality and performance metrics at various stages of the life of the loan. LoanLogics’ mission is to bring our customers to greater stability and strength through advanced technology and services that support verification, audit and measurement of loan quality,” said Brian K. Fitzpatrick, President and CEO of LoanLogics.

****LoanLogics is headquartered in Fort Washington, PA. No further details on the deal were disclosed, but what it says to me is the days of the standalone PPE being a strong value proposition for lenders has gone the way of the dinosaurs, only in this case the meteor that caused the extinction of this technology class was the mortgage meltdown. Once the subprime lenders and designer loan products went away the need for a PPE was diminished. Maybe that need will come back, but in my view once something is dead it usually stays dead.