Rival sees advantages in ICE, Black Knight merger

The third largest loan origination system provider, Mortgage Cadence, sees an opportunity to pick up business if the merger between No. 1 ICE Mortgage Technology and No. 2 Black Knight goes through.

Parent company Accenture has invested $80 million over the last couple of years to continue development of the platform, said Joseph Camerieri, executive vice president, sales and strategy.

“We’ve rebuilt the entire platform in HTML, and we’ve moved it to the public cloud de jure, so we’re excited about that,” Camerieri said in an interview at the Mortgage Bankers Association’s Secondary and Capital Markets Conference. “We’re starting to get a lot of traction from lenders. We’re vendor agnostic; our two largest competitors are not vendor agnostic because they own them all.”

Mortgage Cadence has created an application programming interface layer and a services hub, so integrations don’t require releases any more, he said.

Joseph Camerieri is executive vice president, sales and strategy at Mortgage Cadence.

“We’ve positioned ourselves well for this,” Camerieri said. “We are predisposed to win, at least in the short term,” with the disruption the merger would cause in the marketplace. The longer term view involves the role an LOS could play at a combined ICE and Black Knight, given their focus on acquiring other service providers, he noted.

Mortgage Cadence occupies a niche between Black Knight’s Empower, used by larger companies, and ICE Mortgage Technology’s Encompass, where the clients are smaller lenders. Mortgage Cadence’s customer base, by contrast, is heavily credit unions and a group of larger financial institutions.

If anything, the merger between ICE and Black Knight will help with the pivot Mortgage Cadence is making to gain market share among independent mortgage bankers, Camarieri said.

Mortgage Cadence’s current clientele are not a direct representation of today’s mortgage market, he admitted. Home Mortgage Disclosure Act data on 2020 gave nonbanks a 60% share of originations. 

“We see an opportunity to position ourselves to encourage independent mortgage bankers to take a look at us,” Camerieri said. “So we’ve done a number of things in that respect — we’ve changed how we priced. We’ve changed how we structure implementation from a cost perspective.”

As a result, today, Mortgage Cadence’s potential new client pipeline now is more characteristic of the industry, with 80% being independent mortgage bankers.

The company made that shift by adding people who have been active in the mortgage industry, such as Camerieri, a 33-year veteran of the business.

“Rather than being a tech company in the mortgage industry, we feel like we’re mortgage professionals now that offer a tech platform,” he explained. “We’ve brought a much more industry view to the company, which is now starting to pay off in our dialogs and in our value proposition.”

Mortgage Cadence is vendor agnostic, which has resonated with potential customers, Camarieri said. ICE Mortgage Technology and Black Knight have each snapped up various vendors over the years; for example, Ellie Mae before going private purchased AllRegs, Mortgage Returns and Velocify, while Black Knight’s buying spree netted them, among others, Optimal Blue, DocVerify and Top of Mind. Intercontinental Exchange’s other mortgage investments are MERS and Simplifile.

Even though ICE and Black Knight have integrations with outside vendors, their outsized presence makes some mortgage companies hesitant, he said.

“We present an option where we are completely agnostic towards third party providers,” said Camerieri.

Another thing that makes Mortgage Cadence unique is that it’s the only platform that supports both forward and reverse origination activity. Given the volume drop, more lenders are considering entering the reverse business and if they make the leap, they don’t have to have separate tech stacks, he noted.