7 Legacies Left by Long-Gone Mortgage Companies
September 6, 2016 6:00 AM
Some defunct mortgage businesses pioneered or established trends that remain relevant today, including the rise of mortgage bankers, the use of electronic notes, and computer searches for borrowers. Here's a look at some of the mortgage industry's most pioneering ideas and trends that have created legacies that have outlasted the companies that established them.
Lomas & Nettleton: Led Mortgage Bankers' Rise
Lomas & Nettleton went bankrupt in 1989, but previously had a long run as the largest servicer and helped lead the rise of mortgage bankers that sold fixed-rate loans in the secondary market as they competed with thrifts' balance sheet lending.
Countrywide: Showed Commercial Banks that Nonbanks Could Be Contenders
Before Countrywide became notorious for overruling its own objections to subprime to compete and got acquired by a bank; it was known for showing nonbanks could be leading mortgage players.
AmTrust: Fueled the Spread of E-Notes
AmTrust, which was the leading supplier of electronic notes prior to its failure and acquisition by New York Community Bank, paved the way for the broader use of e-mortgages.
NetBank: Pioneered Online Bank Lending
Mortgage-lender NetBank, which was closed by regulators in 2007, was one of the first Internet-only depositories.
Computing and Statistical Services: Created MSP Servicing Platform
In the early 1960s, Computing and Statistical Services launched Mortgage Servicing Package, the servicing system of record still in use by more than half of the industry. The company changed its name to Computer Power Inc. in 1969, and it was acquired by ALLTEL Information Services in 1992. Title insurance company Fidelity National Financial purchased ALLTEL Information Services in 2003, renaming it Fidelity Information Systems. FIS later became Fidelity National Information Services. Then in 2008, MSP and other mortgage technologies were spun off and became Lender Processing Services. LPS was reacquired by Fidelity National Financial and renamed Black Knight Financial Services, while MSP has since been renamed LoanSphere MSP.
Guardian Savings and Loan: Securitized Subprime
Guardian Savings and Loan in Huntington Beach, Calif., was one of the first lenders to securitize subprime mortgages. It went into receivership in 1991.
Taylor, Bean & Whitaker: Highlighted 'Double-Pledging' Risks
TBW highlighted the risk that an institution could double- or even triple-pledge its loans to secure multiple financings, and although the company collapsed after a Federal Bureau of Investigation raid in 2009, related litigation and the risk that mortgages could end up pledged to multiple parties persist.
