IBM Lender Business Process Services Inc. said it has been approved and licensed to conduct origination services for government-insured loans.
The U.S. Department of Housing and Urban Development recently approved the Charlotte, N.C.-based company to originate loans insured by the Federal Housing Administration, IBM announced today.
In addition, IBM, which claims it helps mortgage lenders improve back-office efficiencies through the automation of the origination process, said it has obtained licenses in most states and plans to complete the licensing process by yearend.
The regulatory actions were taken as IBM said it sees opportunity for its private label business with the growing demand for FHA.
"With the ongoing current credit crunch and the disappearance of several 90/10 and no money down loan products, industry analysts predict a slight increase in lenders leveraging federally insured FHA loans for new home buyers," the statement said. "IBM LBPS's approval to provide mortgage origination in this space will become an important resource for lenders looking to expand in this area."
IBM said that in addition to top tier, mid-sized and smaller lenders, its service can support new entrants who are not currently in the mortgage lending business.
"Lenders leveraging the IBM LBPS loan fulfillment advantage benefit from a sensible switch from a fixed cost structure to a variable, per-loan arrangement that allows for more consistent performance through market phases," the announcement stated.
And IBM isn't the only company capitalizing on the resurging popularity of FHA business.
Intellidyn Corp. has integrated a feature to help originators identify qualified prospects for FHASecure -- a Bush administration initiative to help some of the many borrowers with increasing adjustable-rate payments to refinance using the FHA program.
"Through the next twelve months, there will still be nearly $1 trillion generated in refinance loans," Intellidyn President and Chief Executive Officer Peter Harvey said in the statement. "Our job is to help our clients reach this market, enabling them to profitably scale business through this challenging period."