MORTECH 2006 IS NOW AVAILABLE TO SUBSCRIBERS
 

October 25, 2006: MORTECH, LLC announces that the much anticipated MORTECH 2006 is now available to sponsors of MORTECH research. Reaching back to 1988, MORTECH picks up important industry trends – not available anywhere else – it is a must have for business and market planning. If you are interested to know more about MORTECH 2006, please click here for information.

What the industry press is saying about MORTECH 2006:

 

Lenders feel the squeeze, turn to tech infrastructure

According to new MORTECH 2006, three out of four lending businesses are being driven by the squeeze on margins. Only one lender in five thinks its company will earn more money in the next 12 months than it did in the past 12. How does all of this bode for technology plans?
(10/18/2006)

Lenders are feeling the pinch.

According to new MORTECH 2006, three out of four lending businesses are being driven by the squeeze on margins. Only one lender in five thinks its company will earn more money in the next 12 months than it did in the past 12.

“This is year 19 for MORTECH. We have never seen the industry so bent on building out their technology infrastructure in the face of fading business prospects,” said Jeff Lebowitz, owner of MORTECH, publisher of the annual MORTECH survey on lender behavior and business use of technology.

“Only the few and the courageous believe that their businesses will grow and grow profitably,” Lebowitz added. “Under the cloud of pessimism is a shining light. Lenders intend to spend 8 percent more on technology than they did last year. The increase in IT spending in mortgage is again one-third higher than spending on IT across all U.S. industries.”

“There is a profound shift in lender behavior,” Lebowitz said. “Always in the past, negative expectations forced deferrals in capital spending. Not the case any more.”

Lenders are making significant investments in their businesses. They are investing in technology to support flexibility and control. High on lenders’ priority lists are:

  • Mobile computing and wireless;
  • Managing by modeling — AVM, pricing systems and risk management;
  • Building more functionality on company-to-customer Web sites; and
  • Proprietary underwriting systems becoming more evident.

According to the MORTECH 2006 findings, the mortgage industry is developing its own “digital divide.” There increasingly is a disturbing pattern emerging as to who is applying technology to run their businesses more effectively.

“Technology has not been about cost reduction — not for some time,” Lebowitz continued. “More money is being spent to give management better insight into the functioning of the business. But that is not true of small lenders, particularly not the small portfolio lenders.”

Lebowitz said it reminds him of the collapse of the thrift industry in the 1980s.

“I think that the major problem with the thrifts back then was not the lack of flexibility in their charter,” he said. “The way they managed their businesses was all wrong. The mortgage banking model was much better suited for the time than it was for portfolio lending.”

Lebowitz said that depositories will suffer again for not implementing the tools they need to run their businesses effectively. According to MORTECH 2006, it is the large lenders that are investing in the right technology for our time, and a broad intelligence gulf is growing deeper and wider in the mortgage industry.

MORTECH is published annually by MORTECH LLC of Guilford, Conn. MORTECH 2006 will be released to sponsors of the research on Oct. 25.

MORTECH is based on a scientific sample survey of lenders of all sizes — more than 300. The sampling discipline used by MORTECH allows conclusions to be applied confidently both to the mortgage industry and to lender size-segments that make up the industry, the company said.

 
 

Pipeline: 'Profound Shift'

American Banker (10/19/06); Berry, Kate

MORTECH LLC owner Jeff Lebowitz expects big mortgage lenders to devote more money to technology in the coming year as a means of gaining a competitive edge in the face of declining home sales.

Lebowitz believes this to be a major shift in behavior, as lenders in past market declines have tended to cut back on spending. Of the 328 lenders polled by MORTECH—a research firm— close to 20 percent plan to expand their subprime origination business. Lebowitz says the boost in technology outlays and the move into the subprime market could force smaller lenders in the niche out of business.

 

MORTECH: Tech Spending Defies Margin Squeeze (National Mortgage News October 18, 2006)

While mortgage lenders are seeing thin margins ahead, they are nevertheless spending 8% more on technology than they did last year, according to MORTECH 2006, the 19th survey of lender behavior and business use of technology. The study shows that the mortgage industry's information technology spending continues to be one-third higher than spending on IT across all U.S. industries, with most tech spending being done by the large lenders. High on lenders' priority lists, according to MORTECH founder and principal Jeff Lebowitz, are mobile computing and wireless; managing by modeling, particularly via automated valuation models, pricing systems, and risk management; building more functionality into customer-facing websites; and increased use of proprietary underwriting systems. The study suggests an increasing "digital divide" between lenders that apply technology to run their businesses more effectively and those that do not.