STUART, FL - In today’s market with declining loan volumes, many mortgage companies are looking for ways to cut costs, which might be perfect timing for a new company that is offering a free loan origination system (LOS) designed for use by any size company and is now boasting at adding over 1,300 companies in just a few months.
TeraVendo is breaking into the LOS market by offering its LoanAce program for free to any size mortgage company. “We don’t charge now, and we have no plans to ever charge a license or maintenance fee.” Says Jeff Cunio, president of TeraVendo. This market strategy might be what’s needed to break into a market dominated by essentially two giants, Calyx’s Point and Ellie Mae’s Encompass LOS systems
According to David Lewis, Senior Vice President of Marketing at Ellie Mae, their LOS market share is approximately 28-30% and includes over 50% of the Top 250 companies. Lewis claims that the Encompass system is used by upwards of 13,000 companies. The system offered by Ellie Mae comes in four different versions, Personal, Standard, Professional, and Encompass Anywhere. Each offers similar features. With set up fees ranging from $395 to $2,985 and yearly maintenance fees from $150 to $600 Encompass’ system can be quite an investment. Encompass is meant to be a “single unified system with one interface that works towards the overall health of a business,” says Lewis. He attributes success to that end from the systems ability to provide “complete management and true team collaboration.”
Dennis Boggs, Senior Vice President of Business Development for Calyx Software and its Point system claims a near 68% market share, over 35,000 companies, and an average of 300,000 individual users per two week period as tracked by an internal system. The service requires an initial account activation fee of $250 and, depending on the number of individual users, and yearly seat fees that range from $100 each for a small company to $50 each for a company with over one hundred users.
But can a brand new LOS take on the proven track records of the two largest systems? Cunio thinks so; the main objective for LoanAce is, “to work for the benefit of the originator, meaning any loan officer, branch manager, mortgage broker, branch owner, or loan professional, by sticking to this mission we will penetrate the market successfully.”
LoanAce provides a feature rich set of tools such as a contact manager, task manager, appointment calendar, and lead importation brought together in an easy to use interface that and doesn’t require hours of training. “Our goal is to offer a system so high in quality and features that an originator would expect to pay fees like the giant companies charge, with one difference of course, we won’t charge them a dime” adds Cunio.
Boggs of Calyx wants to know what will happen in the long run for a company that provides an LOS at no charge. Will LoanAce rely on good vendor integration or begin to charge is already established clients? He asserts, “Somewhere along the way, somebody has to pay.”
So how will TeraVendo make money by offering Loan Ace for free? “We’re not reinventing the wheel here, most other LOS systems charge vendors to integrate into their programs, we intend to use the same model. We just don’t see the need to double dip by charging our users a fee as well as vendors a fee for access.” Cunio believes that the users of LoanAce will recognize this and utilize the integrated vendors.
