At this time a little over a year ago, Mortgage Cadence was gearing up to take advantage of a changing landscape in the loan origination system business.
The news about the Intercontinental Exchange purchase of Black Knight just broke and speculation abounded about what would happen regarding their mutual pieces of origination technology. Mortgage Cadence was one of the competitors that ICE cited in a May legal filing as competing for LOS business with both companies.
Meanwhile, Mortgage Cadence, owned by Accenture, was undergoing a transformation of its own, after investments to rebuild its platform and move it to the Microsoft Azure public cloud.
Today’s discussions with potential clients are more about tech strategy, said Joseph Camerieri, executive vice president, sales and strategy, in a follow up conversation a year later.
“I joke about this, but I’ve said we accidentally fell into the right market position at the right time,” Camerieri said. “We’re heavily invested in that API [application programming interface] structure and integration layers as we built out the new stack.”
That has eliminated the need for software development kits and hard coding for changes in workflow.
On May 2, Mortgage Cadence released version 3.0 of its MCP LOS; the first edition launched in 2021, while 2.0 came out in the summer of 2022; at that time the legacy enterprise LOS was retired.
The new update gives lenders the power to manage their own security protocols.
Mortgage Cadence is now having conversations with the mainstream lenders it was starting to target. That “really is quite exciting because they’ve never in the past have never looked at Mortgage Cadence before,” Camerieri declared. These firms are looking to rid themselves of the complexities they built into their current technology.
A chief information officer that Camerieri recently spoke with compared it to a 16-year-old who buys his or her first car and tricks it out. But five years later, all those bells and whistles are no longer attractive.
Similarly, a lot of lenders had put customizations on their LOS, but now those enhancements no longer serve their original purpose.
“And he said — and I think that’s a little bit about what’s happened to a lot of people — ‘we’ve tricked out, we fulfilled all this customization and all these things are on one of these mainframe or commercial systems. Right now, I have fixed costs and people to maintain all this custom development, it doesn’t serve us anymore,'” Camerieri said. The CIO said lenders were looking to start anew, get out of information technology development and streamline operations.
A year ago, Mortgage Cadence’s customers were primarily credit unions, but it was looking to bring on board more of the nonbank mortgage lenders.
“It’s never been a niche product, but we always attracted niche players — wealth managers, a San Antonio bank, a number of credit unions,” Camerieri said. “It’s always been a commercially available robust product, but we’ve always just been attracted by those niche players, and that’s finally changed now.”
Today, its prospect pipeline is predominantly independent mortgage bankers. “We’re feeling really good about getting the looks of some market players,” he continued.
The discussion is about configuration rather than customization, with Mortgage Cadence being 100% focused on the former, Camerieri said.
That means “when you’re getting enhancements, you’re getting releases,” he explained. With customization that used software development kits, and updates are needed, “that’s when all hell breaks loose,” he said. “You have to recode it, you’ve got to retest it.”
The product is also benefitting from a past investment into a robust point-of-sale system, which given the competitive landscape for that product might not have happened if he was making the decisions regarding it back then.
“But as it turns out, it’s a key factor on why we’re getting looks right now,” Camerieri said. Those POS integrations streamline the deck and offer “far forward facing technology sharing the same databases.”
The cost-savings, at a time when the industry is losing money on production, are a big deal. “When you’re making 250 basis points, you don’t think too much about that,” Camerieri said. “When you’re losing 50, you think a lot about it.”
That is why Camerieri is bullish on his company’s prospects, even as the industry faces tough times.
“I think the investments that we’ve made in the platform are starting to finally pay off and we’re just looking for a little momentum like everyone else here,” Camerieri commented. “But I would say definitely not doom and gloom at Mortgage Cadence.”
