Volume 4 | Issue 201 | Tuesday, October 18, 2005

ACT Mortgage Capital Expands Through Technology

MBA (10/18/2005) Sorohan, Mike
The business world is littered with the carcasses of companies that overextended resources and collapsed on themselves. This is not one of those stories.

For ACT Mortgage Capital, Sunrise, Fla., this year has seen aggressive expansion; by the middle of next year, ACT should be operational in the entire lower 48 states, from its current 23. The company recently opened a Northeast regional office in Rochelle Park, N.J., and will soon open a new office in Phoenix.

Nelson Haws, ACT Mortgage’s president and CEO, told MBA NewsLink that the company’s growth has been measured and deliberate, aided by technology. In April, ACT launched ACTSys, a Web-based portal for ACT's mortgage broker community. Haws said the project with MindBox, based in Greenbrae, Calif., had been in development since 2003.

"We were looking for a solution that would allow us to speed decisions to our brokers in pricing, product eligibility and loan processing," Haws said. With ACTSys, we have been able to gain more control over our loan eligibility and pricing decisions. We have also been able to create a broker portal that makes it easy and attractive for brokers to do business with us."

ACTSys is built on MindBox's ARTEnterprise product suite, which automates every decision step in the mortgage lending process using rules- and case-based decisioning technology. It allows ACT to provide brokers the ability to receive instant decisions on a variety of loan decisions, including prequalification, pricing, quick quotes, rate locking, credit analysis, product eligibility and best-fit deal structuring.

“We worked very closely with MindBox over the past two years. It’s been the backbone of our growth plan, having a centralized database enabling us to do business and allows us to expand very efficiently, Haws said. “We’ve pretty much put the final touches on the system. For the most part, the system is intact and fully functional. Now we’re in sales expansion. We took two years to get it ironed out here in Sunrise, Fla., and moved forward with the expansion.”

The expansion has been dramatic—in six months ACT has expanded from 15 employees to 250; originations have grown from $25 million per month to nearly $150 million per month. But Haws said the technology allows the company’s growth to be measured.

“The technology allows us to efficiently expand,” Haws said. “It allows us to expand without putting a huge investment in human resources. The expansion is not only based on increasing our staff but allows us to control the data.

In addition to creating efficiencies, the system allows ACT Mortgage to effectively manage data and quality control. “We can be in California or Arizona, but brokers see Sunrise as the operations,” Haws said. “The brokers can do everything online; where they are in the country has no real bearing. On the back end, delivering to Wall Street, the date is very easily manipulated in the secondary markets, which allows us to move quickly.”

Such abilities are important from a competitive standpoint, Haws said. “That’s one of our biggest attributes. We compete with GreenPoint and IndyMac, and I feel we’ve created a system that allows us to have an edge in competing with those companies. We’re smaller and we can make decisions faster and more efficiently,” he said. “It’s given us the image of a much larger company, which helps in recruiting staff and brokers; it’s about a 50-50 split.”

And for brokers, the edge is critical. “A broker says, ‘I have to compete.’ We don’t have to create the opportunities for them, but we have to have something that our competitors don’t,” Haws said.

Technology has been ACT Mortgage’s biggest investment, “hands down,” Haws said. “Just because you’re big and capital-happy doesn’t mean you’re efficient. We’ve spent a majority of our money on technology, and it’s a part of our overall vision. We continue to strive towards that. We feel it’s pretty much the way the market is going. And our clients are looking at that.”

By end of this year, Haws said ACT Mortgage would be effectively working in the continental 48 states. “We’ll be expanding our sales force geographically. And we’re also taking the technology to the next level. Hopefully, our partnership with MindBox is very strong we’ve enjoyed our relationship with them. They’ve made some advances and we have suggestions; working together, we can create a system that not only competes with our competitors but also exceeds the needs of our clients.”

Technology is “clearly where the future is going,” Haws said. “We don’t see technology playing any less of a role; we see it playing a much bigger role in the industry, and we hope to define those expectations.”