RISING REGULATORY BURDENS and challenging foreclosure issues last year couldn't mask a surprising development: 2012 was quite profitable for many industry firms. [paragraph] "Last year was a very good year for us," agrees John Walsh, president of San Diego-based DataQuick. "We increased the amount of business we did with most of the major lenders," he ex-plains. DataQuick experienced double-digit growth in 2012, and the company expects similar results this year.
"We're more excited about 2013," confirms Walsh, in large part due to the September 2012 acquisition of Rels Title. With its added scope, DataQuick now offers credit, appraisal, title and settlement services to lenders nationally.
The increased predominance of large national lenders in both originations and servicing plays a big role in DataQuick's growth. Higher regulatory oversight of those lenders is forcing them to select vendors carefully.
National lenders "find it hard to do business with smaller firms," observes Walsh. Bank examiners require lenders to audit their vendors regularly to check for everything from technology systems security to making sure the documents they generate are compliant with fair lending mandates.
Offering centralized coordination of settlement services helps alleviate concerns at large lenders over "who is touching and closing all their loans," says Walsh. Banks that are being closely watched don't want exceptions to their policies and practices emerging.
DataQuick has "dramatically changed" its internal processes to satisfy those customer expectations, says Walsh. "The challenges of managing the business have increased," he says.
Additionally, DataQuick "is definitely looking to be an acquirer" in 2013, Walsh comments. He says both technology firms and settlement service providers could Fit into their current business and find new growth opportunities.
Closing loans is a competitive business, with a number of technology and settlement services firms jostling for market share. At the end of the day, Walsh notes, it comes down to the question of "who will do the best job to close loans accurately and promptly?"
Although a variety of approaches are available for lenders to choose from, DataQuick focuses more on working with lenders wanting to centralize their closing process. Regional lenders, Walsh notes, will continue being served by the traditional delivery method of working with local branch offices of settlement service providers.
Home price trends...