IBM Lender Business Process Services, Inc. (IBM LBPS), a wholly owned subsidiary of IBM (NYSE:IBM), today announced that Coastal Federal Credit Union has entered into a five-year contract whereby IBM will provide comprehensive private label mortgage loan fulfillment services.
Coastal Federal Credit Union, based in Raleigh, NC, is a not-for-profit, member-owned, financial cooperative with nearly 172,000 members and approaching $2 billion in assets. The credit union was chartered in 1967 and has been offering mortgages for thirty-two years. As part of the agreement, IBM LBPS will provide Coastal with a full range of lending services, including loan application processing, underwriting, customer care, vendor management, document preparation and loan closing coordination.
IBM will enable Coastal to replace much of the fixed costs associated with typical loan fulfillment operations with a variable cost framework, freeing employees to focus more on providing better personal service and support to members. This deal is anticipated to lower mortgage origination costs for Coastal by thirty to forty percent and provide best in class functionality to rapidly scale to meet market demands.
"The current mortgage market is placing lenders under pressure to manage an inherently high-cost, labor-intensive process," said Coastal's President and CEO, Larry Wilson. "By leveraging IBM's industry expertise and leading applications, technology and operational capabilities, Coastal will be better able to facilitate, manage, and streamline our business processes to reduce costs and increase efficiencies in our operations, which will ultimately allow us to provide better services to our members."
"The current mortgage environment has clearly exposed pain points on a much more rapid scale for lenders than one would have ever anticipated," said Greg Sullins, executive director, IBM Lender Business Process Services. "Coastal Federal Credit Union is clearly leveraging IBM's investments and delivery excellence in order to transform their mortgage origination operating model. We are excited about the trust Coastal has placed in us and see a growing trend by other lenders to tap into superior capability that otherwise would be too costly to develop and maintain alone."
IBM Opens New Lending Business Process Services Facility in Charlotte, North Carolina
IBM today announced it has opened a new 250 seat LBPS delivery center in Charlotte, North Carolina. The new operations center will provide complete outsourcing and processing services for mortgage industry clients.
IBM has been steadily building on its existing capabilities through strategic acquisitions, such as Palisades and FileNet, and blending of software and services to help its banking and lending customers worldwide. IBM is uniquely positioned to deliver on mortgage lending solutions because of its focus on and competence in the financial services industry.