Scaleable, adaptable offerings help clients amid market challenges
SitusAMC, a prominent provider of technology and services to the real estate finance industry, this week launched its Warehouse Financing Solutions division, overseeing a business touching more than 70% of the warehouse market, a top official told Mortgage Professional America.
The company currently supports some 75% of the warehouse market via its ProMerit and WLS warehouse lending technology products. Among such clients are 16 of the nation’s top financial institutions, representing more than $2 trillion in warehouse funds.
Anthony Beshara, managing director and head of the new division, described the complicated nature of building and launching a warehouse lending franchise that is exacerbated by a labor shortage and increasing competition.
“When you start to think, as an organization owning, operating and licensing software applications closing in on 80% of the warehouse lenders out there, we thought it made sense to develop a more strategic business, a mortgage ecosystem, around the technology we own, operate and license to clients,” Beshara told MPA.
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He offered context that led to the launch. Last year, SitusAMC acquired Street Resource Group, Inc., and its widely utilized Warehouse Loan System (WLS). The acquisition expanded SitusAMC’s warehouse lending technology offering, pairing WLS with SitusAMC’s existing ProMerit system (acquired via the MBMS, Inc. acquisition in 2019). The combined offerings support more than 60 clients representing approximately $3 trillion in loan financing during 2020, the company announced at the time. As part of the deal, SitusAMC retained the SRG team, and SRG founder and CEO Stanley Street will serve as vice chairman, SitusAMC Technologies.
“Some of the challenges that are facing warehouse lenders today is we are seeing an increase in competition, so we’re seeing new franchises that are entering the space,” Beshara said. “They are, in some cases, looking to grow and expand their footprint. Perhaps they have been historically managing their book of business in spreadsheets which is a very manual process. In other cases, these are new franchises that are essentially building the foundation of their business today. What that’s doing is increasing the competitive landscape.”
Recent market changes have further exacerbated the layers of complexity: “There are new challenges,” Beshara added. “We’re on the brink of rising inflation, higher mortgage rates, agency volumes are tapering off. So you’re starting to see a slowdown in volume and product that will be available to finance in the marketplace. You’re also dealing with some of the ripple effects of the pandemic in the sense that a lot of the work environment has evolved, and you have people who either want to work remotely, in a different geographical location, or want a hybrid environment. Traditionally, that hasn’t been how banks have operated.”
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Given the emergence of such challenges, company officials were left to ponder how to rise to the challenge: “That really got us thinking of how to address these challenges, how to address these needs for our clients, warehouse lenders,” Beshara said. “It led us to building out a broader ecosystem where we can take on a lot of the day-to-day components. We can provide something that’s cost-effective and efficient and that’s a turnkey solution to our clients, and they can focus on strategy, business development, being more proactive with their clients, developing a broader relationship – ‘hey, we’re financing agency mortgages for you today; we’d like to finance agency loans, small business commercial, non-QM’ – but if you’re mired in the day-to-day, it becomes exponentially more time-consuming. It takes away your ability to focus on your clients and drive revenue growth.”
The solution: “it’s adaptable, it’s customizable, it’s scaleable,” Beshara said. “We can do this across multiple clients. We can deliver a cost-effective solution. We built a team onshore in the US, we built a team offshore in India. We brought in individuals with the technical skillsets and operational skillsets.”
The company’s Warehouse Administration Services division supports warehouse lenders with a breadth of services: execution of daily operations; banking standards compliance; risk management; technology implementations and ongoing support; and warehouse facility setup.
