TABLE OF CONTENTS

EXECUTIVE SUMMARY	10
1	INTRODUCTION	13
1.1	REPORT PURPOSE	13
1.1.1	REPORT CATALYST	13
1.1.2	REPORT STRUCTURE	13
1.2	RESEARCH OBJECTIVE	14
1.3	STUDY METHODOLOGY	14
2	MARKET OVERVIEW	16
2.1	INTRODUCTION	16
2.2	POST CRISIS MORTGAGE SCENARIO	20
2.2.1	FEAR OF FORECLOSURE LEADS TO REFINANCING	20
2.2.2	COSTLY FHA CREATES OPPORTUNITY FOR PRIVATE MORTGAGE INSURANCE	21
2.2.3	BANKS UNDER PRESSURE TO REPURCHASE MBS	22
2.2.4	BANKS PREFER REVERSE MORTGAGE	23
2.2.5	MARKET CONSOLIDATION	23
2.2.5.1	Mortgage – A Consolidating Market	24
2.2.5.2	Residential Mortgage Lending – Top Lenders	25
2.3	GOVERNMENT REVAMPS THE MORTGAGE INDUSTRY	26
2.3.1	MHA (MAKING HOME AFFORDABLE) PROGRAM	26
2.3.2	FEDERAL RESERVE’S MBS PURCHASE PROGRAM	27
2.3.3	TAX CREDITS TO BOOST HOME SALES	28
3	ANALYSIS AND FORECAST	30
3.1	INTRODUCTION	30
3.2	ANALYSIS OF DEMAND SIDE INDICATORS	30
3.2.1	NOMINAL GDP TO GROW OVER 3% BY 2015	30
3.2.2	HIGHEST UNEMPLOYMENT RATE SINCE 1984	31
3.2.3	SAVINGS RATE REDUCES FROM THE 2009 HIGH	34
3.3	ANALYSIS OF SUPPLY SIDE INDICATORS	35
3.3.1	REDUCING CORE INFLATION	35
3.3.2	MORTGAGE RATES AT THEIR LOWEST	37
3.3.3	HOUSING STARTS TO GROW FROM 2010	39
3.4	MORTGAGE ORIGINATION TO INCREASE AFTER 2011	40
3.4.1	MORTGAGE ORIGINATION WILL GROW AT 10% CAGR	42
3.4.2	FROM REFINANCE TO NEW PURCHASES	43
4	STRATEGY FORMULATION	44
4.1	INTRODUCTION	44
4.2	STRATEGIES ADOPTED BY U.S. BANKS	44
4.2.1	ACQUIRING TROUBLED LENDERS FOR EXPANSION	44
4.2.2	EFFORTS TO REDUCE DEFAULT RATES	50
4.2.3	EFFORTS TO CREATE AWARENESS & BRAND BUILDING	52
4.2.4	UPGRADING TECHNOLOGY	54
4.3	EARLY MOVERS WILL EXPLOIT OPPORTUNITIES IN NEAR-FUTURE	55
4.4	STRATEGIES FOLLOWED BY BANKS IN FOREIGN MARKETS	56
4.4.1	PRODUCT BUNDLING STRATEGY EFFECTIVELY ADOPTED BY AUSTRALIAN BANKS TO BUILD CUSTOMER LOYALTY	56
4.4.2	ARAB BANK’S INITIATIVE IN BAHRAIN HELPS REDUCE BURDEN OF REPAYMENT THROUGH LINKED ACCOUNTS	56
4.4.3	LLOYDS TSB ALLOWED ITS U.K. BORROWERS TO USE THIRD PARTY CONTRIBUTIONS FOR HOME PURCHASES	57
4.4.4	U.K. BASED GUARANTORS’ MORTGAGE PROGRAMS TO BOOST LENDING	57
4.4.5	IRELAND BASED BANK PROTECTS HOME OWNERS FROM FALLING HOUSE PRICES	58
4.4.6	SUCCESS OF REPAYMENT OPTIONS DEPEND ON FLEXIBILE TERMS	58
4.4.6.1	Multiple Repayment Options by Standard Chartered Bank	59
4.4.6.2	New Zealand based TSB Bank’s flexible repayment options	59
4.4.7	HYBRID HOME LOANS IN NEW ZEALAND, CANADA AND THE U.K. GIVE THE ADVANTAGE OF FIXED AS WELL AS VARIABLE RATES	60
5	CASE STUDIES	61
5.1	CASE STUDY I – COMMUNITY BANK OF PENNSYLVANIA INCREASED LOAN VOLUME AND STREAMLINED MORTGAGE PROCESS WITH INTEGRATED POINT OF SALE SOLUTION BY MORTGAGEBOT	61
5.1.1	ABOUT COMMUNITY BANK	61
5.1.2	OBJECTIVES	62
5.1.2.1	Manual data entry paper dependency and inefficiency – main bottlenecks faced by the bank	62
5.1.2.2	Challenge – Increase efficiency and productivity	63
5.1.2.3	Bank selects Mortgagebot’s PowerSite mortgage POS	63
5.1.2.4	More channels, higher volume and more productivity were the main benefits	64
5.1.3	CONCLUSION	65
5.2	CASE STUDY II – MORTGAGE BUILDER SOFTWARE IMPLEMENTS END-TO-END SAAS LOAN ORIGINATION PLATFORM AT CORTLAND BANK	66
5.2.1	ABOUT CORTLAND SAVINGS AND BANKING COMPANY	66
5.2.2	OBJECTIVES	66
5.2.2.1	Challenge of cost and time in implementing an enterprise level LOS	66
5.2.2.2	SaaS model offered by Mortgage Builder solved the bank’s requirement	67
5.2.3	CONCLUSION	67
6	VENDOR ANALYSIS	68
6.1	VENDOR BENCHMARKING	68
6.1.1	STRATEGIC BENCHMARKING	69
6.1.2	FUNCTIONAL BENCHMARKING	71
6.2	VENDOR PROFILES	73
6.2.1	DEL MAR DATATRAC	73
6.2.1.1	Products and services	73
6.2.1.2	Developments	74
6.2.2	ELLIE MAE	76
6.2.2.1	Products and services	76
6.2.2.2	Developments	77
6.2.3	ISGN	79
6.2.3.1	Products and services	79
6.2.3.2	Developments	80
6.2.4	MORTGAGE BUILDER SOFTWARE	82
6.2.4.1	Products and services	82
6.2.4.2	Developments	83
6.2.5	MORTGAGE CADENCE	84
6.2.5.1	Products and services	84
6.2.5.2	Developments	85
6.2.6	MORTGAGEBOT	86
6.2.6.1	Products and services	86
6.2.6.2	Developments	87
6.2.7	MOTIVITY SOLUTIONS	89
6.2.7.1	Products and services	89
6.2.7.2	Developments	90
6.2.8	MRG DOCUMENT TECHNOLOGIES	92
6.2.8.1	Products and services	92
6.2.8.2	Developments	93

 
LIST OF TABLES


TABLE 1	LIST OF ACQUISITIONS AND BENEFITS TO ACQUIRERS	45
TABLE 2	LENDERS EFFORT TO REDUCE DELINQUENCIES	51