Products or Services?(mortgage companies offer integrated bundled services)(Brief Article)(Column)

Mr. Gugenheim is executive vice president & chief operating officer of Stewart Mortgage Information. He is responsible for the leadership of the business operations of the company. Mr. Gugenheim's experience includes 14 years in the mortgage industry with wholesale and retail loan origination and management, as well as management of secondary marketing and servicing departments for major national lenders.

The term "Bundled Services" evolved when title companies and other settlement service providers recognized the need to switch from a one-dimensional business to a full-service financial service company with the ability to deliver an integrated bundle of products and services at or very near the point of sale. As new technologies have been developed, title companies and vendor management companies are competing for the opportunity to be the one-stop shop for credit reports, flood determinations, full appraisals, AVM's, homeowners' warranties, tax services, closing documents, full service and witness closings together with other related real estate services.

The list of product offerings continues to grow, but unfortunately in an effort to build the biggest and the best, many of these one-stop shops have forgotten to focus on the most important item - adding value-added services to the customer. Products such as credit reports, tax, flood determinations, and now even AVM's are becoming more commodity like, and can be easily ordered through many in- house, Web-based ordering systems and service-ordering portals.

So, what should lenders really be looking for? There should be a clear distinction between product and service offerings. Commoditized products don't add any long-term value to the lender and as such may be difficult for the vendor to support with a high level of customer service over the long term as their profit margins continue to erode. New and alternative title insurance products, "smart document"/e-closing document preparation and delivery via the Web, cheaper and more convenient closings for the borrowers, and full outsourcing of many or all of the post- closing and investor delivery functions are all services that ultimately lead to borrower and lender satisfaction while saving both parties time and money.

The use of technology has improved individual pieces of the mortgage loan process, but not the process as a whole. Technology has done little to reduce the requirement of paper files. Lenders continue to ...