Industry NewsTechnology

Outsourcing and mortgage lenders

Practice takes up one-third of technology expenses

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For the top mortgage originators and servicers, about a third of all technology operating expenses in 2003 were related to outsourcing certain technology functions to business partners. About 67 percent of technology spending was dedicated to origination functions and 33 percent to servicing functions. And of the 2003 technology spending, 57 percent was for required maintenance, while the remaining 43 percent was discretionary. Those were some of the findings of the 2004 MBA Technology Study conducted by the Mortgage Bankers Association. The prototype study, conducted through focus groups, was designed to develop a common set of definitions for benchmarking technology spending and to improve technology internal and external reporting. Other reasons included understanding the drivers of the technology spending decisions process, providing meaningful operational and financial metrics and ascertaining the big issues facing the mortgage industry's chief information officers and chief ...