BCE Emergis Purchases Freddie Mac's On-Line Mortgage Processing And Closing Tools
September 20, 2002
Freddie Mac to Distribute Tools to Lenders in US Mortgage Market
McLean, VA and Montréal, Québec – Freddie Mac (NYSE: FRE) and BCE Emergis (TSX: IFM) announced today that BCE Emergis has agreed to acquire on-line mortgage processing and closing technology tools from Freddie Mac, while Freddie Mac has agreed to distribute the tools to its lenders in the United States' mortgage market. These tools will enable mortgage lenders and brokers to more easily obtain an array of third-party services needed to process, close and fund mortgage loans via the Internet, as well as provide the capability to create, execute and store mortgage documents in a secure electronic environment.
Freddie Mac and BCE Emergis have been working together on the operational requirements for these tools to ensure that high standards of reliability, integrity and security are met. BCE Emergis will acquire the tools in their current stage of development from Freddie Mac for an initial payment estimated at and not exceeding US$6.0 million, deferred payments totalling $12.0 million plus interest, and other consideration dependent on future usage.
Freddie Mac will market the tools to lenders in the United States mortgage market, make them broadly available on its Loan Prospector website and integrate them with its automated underwriting process. BCE Emergis will manage their development, implementation and operation. BCE Emergis will also use the platform to complement its other solutions in the e-lending area. The tools for ordering third-party services needed to process a loan are already available on a limited basis on Freddie Mac's Loan Prospector website and will be broadly available by the end of the year. The tools related to electronic closing and document storage should be available in 2003.
"We are extremely pleased to now be addressing the e-business needs of the mortgage lending community," states Pierre Blouin, Chief Executive Officer of BCE Emergis. "We believe we can make these mortgage technology tools the industry solution of choice for paperless fulfillment, closing and storage of loan transactions."
Pete Maselli, Freddie Mac's senior vice president of Mortgage Services, says, "Based on our experience working with BCE Emergis, we know they are in an ideal position to manage the production and operation of these capabilities. The sale of these capabilities to BCE Emergis should accelerate their adoption by making them more broadly available to all lenders."
"Freddie Mac is focused on leveraging technology to enable lenders to streamline and simplify the mortgage loan origination process," Maselli adds. "With on-line vendor services and e-closing and storage services, we continue Freddie Mac's direction to enable a faster, easier and more efficient lending experience for the mortgage professional and homebuyer."
Blouinconcludes: "Acquiring these mortgage technology tools will complement our core processing capabilities and further strengthen our focus on the financial services sector.
A safe and secure electronic environment
Mortgage processing and closing tools allow lenders to leverage digital signature technology and will help them adapt to this emerging trend. Since the passage of e-signature legislation two years ago, Freddie Mac has been researching and developing these tools to further streamline and make the paper-intensive mortgage lending process faster, easier and more efficient for lenders and borrowers. These on-line capabilities enable lenders to order vendor services, create mortgage closing and disclosure documents, execute mortgage documents using digital signature technology, and utilize on-line storage of electronic mortgage loan files in a secure repository.
Source: Freddie Mac