MRN Cubed, a mortgage outsourcing and consulting firm and the parent company of e-mortgage technology vendor SigniaDocs, acquired default management workflow vendor DepotPoint.
In an exclusive interview with Mortgage Technology, Paul Anselmo, CEO of MRN Cubed and SigniaDocs, said the acquisition is part of a broader strategy to both expand its capabilities on the servicing side and bring DepotPoint’s rules-driven workflow engine to the origination sector of the mortgage industry.
Citing terms of the purchase agreement, Anselmo declined to disclose the price DepotPoint’s two primary investors were paid for the intellectual property, software code and customer base, which includes a list of 4,200 real estate brokers who specialize in selling real estate owned properties. The deal closed in mid-September.
To facilitate the deal, DepotPoint’s intellectual property was sold to a new limited liability company called DepoPoint, which MRN Cubed created and wholly owns. Former DepotPoint president and CEO Joe Filoseta has taken the role of president of DepoPoint and four employees from DepotPoint have taken positions at DepoPoint.
Filoseta’s immediate task is facilitating the transition process. Long-term, he will be responsible for sales and marketing of DepoPoint, which Anselmo said will remain as a standalone brand.
Anselmo acknowledged that rumors of DepotPoint financial instability were rampant among mortgage technology circles, but said the problem wasn’t with what DepotPoint was offering, but the vendor’s troubles getting a foot in the door to pitch the technology—something Anselmo’s companies can overcome.
“It’s all about relationship. With our partnership with Overture Technologies, we are already in many shops and it’s just cross selling where we already are,” Anselmo said. “You’ve got to know somebody to get in and you have to have some sort of history as a problem solver and an innovator, which we have.”
In the first 60 days of the acquisition, DepoPoint’s revenue has doubled. “I simplified the fee structure, which made it more attractive to potential clients because they could better understand it,” Anselmo said.
MRN Cubed, based in the Dallas suburb of Frisco, Texas, currently offers loss mitigation outsourcing, which begins by running the decisioning engine of Bethesda, Md.-based vendor Overture Technologies. Overture’s net present value and loss mitigation waterfall engine is certified by the Treasury Department, Anselmo said, and provides servicers with predictions on the best outcome for loans in a portfolio, which are updated throughout the process as new data is ingested into the system.
For loans the engine predicts are good candidates for refinancing, loan modifications or deeds in lieu of foreclosure workouts, MRN Cubed uses the paperless-based document preparation software that SigniaDocs provides to electronically distribute modification forms to distressed borrowers, who then e-sign them, speeding up the process.
But in cases where short sales and foreclosures are the ultimate resolution, MRN Cubed’s process was not as technologically sophisticated. “There was a lot of manual back and forth,” Anselmo said, because of the numerous parties involved, particularly in short sales.
By incorporating the DepotPoint technology, MRN Cubed’s outsourcing unit will have a centralized hub to process short sales and foreclosures.
“Now all of that is put up in one platform and all of the parties are given security rights to get in and see what they need to do and now e-sign what they need to sign,” Anselmo said. “Whatever the outcome is, we have a solution. If it’s a refinance, MRN helps them underwrite, close, fund and deliver the new loan, with SigniaDocs doing the documentation. If it’s a deed in lieu, then we prepare those docs.”
SigniaDocs president Harry Gardner sees tremendous potential to expand his unit’s e-doc capabilities beyond loss mitigation and into default servicing.
“We have the capability for servicers to do loan mods and short sales with e-docs and now, we have the capability to do distressed asset management by e-enabling all of those hundreds of little contracts that need to be done for the various contracts that are supporting those properties,” Gardner said.
While servicing outsourcing has grown, MRN Cubed’s outsourcing operation is still rooted in the front office, where the company offers underwriting, due diligence and other origination services, typically using SigniaDocs’ paperless doc prep and e-mortgage capabilities.
DepotPoint’s technology “is first and foremost a workflow engine that just happened to be utilized for short sale and REO management because there was such a void there,” Anselmo said, and MRN Cubed will reconfigure it to be used on the origination side, beginning with its due diligence outsourcing and expanding to include its underwriting technology.
“With our underwriting system and DepoPoint, we’ve really got a true workflow engine now that can sit on top and really control all those aspects of the business, whether we’re doing underwriting or buying closed loans for our clients,” he said.
Gardner agreed that the rules-based workflow engine will be a powerful tool for mortgage originating.
“Right now, when we do outsource services for a lender customer, our contractors have to learn the lenders’ system. So for every lender we brought on, we’d have their underwriting system,” Gardner said. “This gives us our own core system that we can use as a centralized system to expand that business in a more flexible way.”
