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RealEC Connects Lenders to Mortgage Services Providers

Commerce Bank manages mortgage services providers via a collaborative partner network.

Case Study Snapshot

Institution: Commerce Bank (Cherry Hill, N.J.).

Assets: $50 billion.

Business Challenge: Manage hundreds of outside mortgage services providers in a cost-effective way.

Solution: RealEC's (Santa Ana, Calif.) Exchange Collaborative Partner Network and iSelect decision engine.

Keeping track of 40 or 50 settlement service providers and related vendors in a cost-effective way is a challenge for all mortgage originators, and Cherry Hill, N.J.-based Commerce Bank is no exception. [Ed. note: Commerce is being acquired by TD Bank Financial Corp. and will be known as TD Commerce Bank.] "When dealing with multiple vendors, you tend to do it their way -- their Web sites, their billing practices," explains David Sawyer, the bank's VP and vendor manager for mortgage services. "It's a very inefficient process."

Commerce started looking for a solution in April 2007. Sawyer outlines the bank's three primary criteria for selecting a solution as the vendors' processes for ordering and delivering services; financial considerations, such as price and billing; and a solution's ability to facilitate regulatory compliance.

In June 2007, Commerce ($50 billion in assets) selected a suite of settlement services order- and vendor-management solutions from RealEC Technologies (Santa Ana, Calif.). Sawyer declines to name the other vendors considered, but he explains that other large providers didn't offer an open system. "Many providers simply refuse to use their competitors' portals," he relates. The heart of the RealEC solution is the RealEC Exchange Collaborative Partner Network (CPN), which connects more than 2,000 lending firms with more than 13,000 service providers, and RealEC's iSelect decision engine.

Commerce sent its first orders through RealEC Exchange in August 2007. Previously, loan processors had to search multiple tables for service providers in a given area, then order the services from each vendor individually. By using RealEC, Sawyer explains, "The [loan] processor can now log on to one Web site and simply click the services needed." He adds, "The services, as well as all communication between the processor and the provider, are all now in one portal."

Training for loan processors was provided via a brief webinar, which, Sawyer says, was "enough to get them up and running." He admits it was more of a challenge "to show appraisal companies how to use a piece of software." But despite the learning curve, Sawyer says, they also were operational in a few weeks.

Sawyer says he likes the ability to customize the Web-based solution's decision rules -- for example, "In a certain county, we want to use these three appraisers." He also values the automated billing function, versus tracking paper bills from dozens of vendors.

Using the solution's reporting capabilities, Commerce has created vendor scorecards in Microsoft (Redmond, Wash.) Excel "to rank every vendor based on cost, performance metrics and volume," Sawyer says. "This has allowed us to understand each vendor's capacity and set limits on volumes by vendor," he adds.

"Competition breeds excellence," Sawyer continues. With RealEC, he says, "Vendors have been more than willing to come down to a competitive price." As a result, Commerce has cut costs by more than 20 percent. "We are saving more than $10 for every $1 we invested in this venture," Sawyer reports.

RealEC also streamlines compliance. "Having hundreds of vendors made [compliance] an arduous task. We had to create outside databases to check things like licenses and insurance," Sawyer says, describing the process before the RealEC deployment. Now that's all handled by RealEC, he notes.

Currently, Commerce uses RealEC Exchange and iSelect for appraisal, title and closing services for home equity and mortgage transactions. But going forward, Sawyer notes, he hopes to expand the bank's use of RealEC to the full suite of services.

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