GUILFORD, Conn.--(BUSINESS WIRE)--MORTECH, LLC, the premier provider of research on lender attitudes and behavior and their use of technology, briefed research clients on how its annual study, MORTECH 2007, will show changes wrought by the mortgage liquidity crisis.

“Current market conditions illuminate the risks of poor industry intelligence and lack of knowledge about lenders’ collective behavior,” said Jeff Lebowitz of MORTECH, LLC. “We normally see one in twenty of our survey respondents specialized in originating non-prime loans. By mid-year 2006, one in five lenders was combing the land for non-prime product. Last year and early this year, lenders were tormented by interest rate spreads compressed by excess industry capacity. Their instinct usually was to grow their way out of the problem.”

One year ago, MORTECH 2006 quantified the overcrowding in the non-prime market space. The study showed the number of bankers shifting production to non-prime increased 50 percent annually between 2003 and 2006. The growth in the absolute number of lenders, most with little non-prime experience, signaled a potential catastrophe by competition.

To increase margins, lenders changed their production mix. At the same time, there has been little action to ensure the integrity of how lenders manage within changing market conditions. According to MORTECH research, less than one in three lenders has a system to assess rate and pipeline risk. There has been no increase from the thirty percent of lenders that had risk systems installed in 2001. “Lenders rushed into the non-prime business without being able to see the structural risks they would encounter,” Lebowitz continued. “They did not have the eyes with which to see the shape of the market and how it was changing.”

The current study, MORTECH 2007, is designed to give a holistic look at the market through scientific research design. On October 17, MORTECH will present research subscribers the first data comparing lender behavior before and after the liquidity squeeze of 2007. The briefing in Boston at the MBA Annual Convention will be open only to current subscribers of MORTECH research.

“In our scientific sample of more than three hundred mortgage lenders, senior managers give us their perspective on how their businesses have changed,” Lebowitz states. “From the information collected from these interviews, we give our research sponsors a timely analysis of how lenders perceive business conditions and what will be their greatest challenges over the next twelve months. We have the data to compare today’s operational and technology responses with what they were in more normal times.”

About MORTECH, LLC

Founded in 1987, MORTECH, LLC is the premier provider of research on lender attitudes and behavior and their use of technology. Over the past twenty years, MORTECH has built a unique database and a special ability to quantify industry trends over time. For more information, click here to inquire further.

For a glimpse of last year's MORTECH, click here.

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