To the Edge and Back.

AuthorKelly, Dewey

Cincinnati-based eLynx today is well positioned to offer lenders solutions to pressing challenges like the coming Integrated Disclosure rule. The electronic document delivery company managed its way through the Great Recession and emerged with a winning platform for disclosing and verifying key data throughout the making of a loan.

Founded in 1994, eLynx is among a handful of technology companies that focus specifically on the exchange and signature of documents and document-related data in banking and lending workflows. Headquartered in Cincinnati, eLynx helped pioneer Web-based electronic delivery services for the mortgage industry in the late 1990s. [paragraph] Since that time, the company's range of services has expanded to support virtually every point in the mortgage workflow, from initial disclosures to closing to post-close services. [paragraph] ELynx's success illustrates the broadening role that e-delivery and e-signature play in the mortgage industry. [paragraph] Today eLynx's Expedite[R] integrated services platform and software-as-a-service (SaaS) model support a wide range of solutions for lenders of all sizes. The company enjoys a strong position as a mortgage technology vendor, and counts hundreds of financial institutions--including half of the top-50 lenders in the United States--as customers.

The company's most recent offerings help lenders address the new Truth in Lending Act (TILA)--Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure rule and expand services to open up access to the valuable data contained within mortgage documents, which can be used to further optimize the lenders' workflows.

But to truly appreciate its current position, one has to view eLynx's success alongside the challenges the industry faced over the past eight years.

Think back to 2006--what a heady time in the mortgage technology business. Electronic document delivery was becoming more widely accepted. There was buzz about the regulations that established e-signature as legally enforceable.

Standards promising greater interoperability across the industry were catching on. Electronic recording of mortgages made it easier to package loans as securities that could be sold to investors, and the industry was talking about the opportunity for truly end-to-end electronic mortgages and the benefits that would bring.

Business volumes were high and business outcomes had never been better. Against this backdrop, two of the industry leaders in secure electronic document delivery for the mortgage industry--SwiftView Inc. and eLynx--joined forces, facilitated by eLynx owner and private investor American Capital Strategies Ltd., Bethesda, Maryland.

But we all know what happened next in the mortgage industry.

When the market collapsed, everyone in the industry scrambled to stay afloat and survive in very uncertain times. Not everyone made it through the rough times--but eLynx did, and emerged stronger and more focused than ever.

2007--Welcome to eLynx and a crisis!

The housing crisis deepens. Banks and hedge funds that invested big in subprime mortgages are left with worthless assets as foreclosures rise. The market experiences the largest drop in existing home sales in 25 years as well as the first national average home price decline since the Great Depression.

In February 2007, Sharon Matthews took over the reins of the newly combined company as its president and chief executive officer. Matthews was a seasoned executive with experience in software development, sales and the service industry on a global scale with solid experience in building businesses.

Her challenge was to marry the technology and cultures of the two companies in the midst of the darkest and most uncertain period in the industry's history. That year, half a dozen of eLynx's largest customers filed for bankruptcy protection, were acquired, or both--including New Century Financial Corporation, American Freedom Mortgage, Mortgage Lenders Network, Countrywide Financial Corporation and Washington Mutual. Credit was extremely tight and industry volumes toppled.

"With the market and indeed the economy in chaos and key customers failing or at risk, there was no honeymoon," recalls Matthews.

"We had to act quickly to stabilize the new company, preserve and protect the shrinking revenue stream, and build a sustainable company for a future that was difficult to foretell," she says.

At first, when the situation was so volatile, it would have been easy to take a wrong step or lose sight of the long-term objective. Early in her career, a mentor had told Matthews: "Leadership is a lot like walking a horse through a corral gate. You always want to keep your eye on the gate, but you must make sure you don't step in anything on your way to getting there."

Matthews and the senior management team immediately set about shoring up the new company. Managers blended their teams across locations, merged operational and information technology (IT) infrastructure, and emphasized open communication. Under Matthews' guidance, the company successfully avoided missteps and kept its eye on the gate.

2008--Streamlining to survive

The recession is official. Dow Jones hits a 14-month lour Emergency interest rate cuts, Troubled Asset Relief Program (TARP), bailouts...

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