"The most successful entrepreneurs are the ones that find a problem, figure out how big of a problem it is, and determine if people want it fixed. After that, it’s just about meeting that need. To have a great idea that doesn’t fit a real or perceived need, that’s a hard road where you can fail fast.” - Tom Apel
During the late 70s to early 80s, the quality control industry was relatively new. Lenders faced regulations that increased their risks, such as the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Lenders recognized that they needed help meeting those regulations. That opportunity opened the door for the foundation of ADFITECH.
ADFITECH began solely as a software company that provided tools to meet the new regulation requirements, but it quickly morphed into a service as the GSE’s and FHA required mortgage QC reviews. ADFITECH’s quality control services started locally but gained momentum within the industry - producing more business than the company was capable of at the time. This influx of business forced us to grow rapidly, create enabling technology and hire the very best people.
What are the significant milestones from ADFITECHs forty-year journey in the industry?
Our growth accelerated while ADFITECH was working directly with the GSEs, as they recognized us as the experts in quality control. During this period, they acted as our best salespeople by directing lenders that struggled to meet the rapidly expanding regulation standards our way. ADFINET was an integral part in tracking changing regulations and eventually was utilized and marketed by agencies to distribute their guides to lenders.
This indirect sales partnership fast-tracked our growth leading us to find a partner to support our expansion, which led to the sale of ADFITECH to Centex. The reason behind Centex's interest in ADFITECH was crystal clear - our Mortgage Fulfillment Services, providing Validated and Vaulted Verification (V³), which revolutionized the way mortgage applications are handled, from initial submission to final purchase.
Additionally, our Mortgage Fulfillment Services garnered interest as it ensures a seamless journey for borrowers, lenders, and other stakeholders. Through Pre & Post Purchase Reviews, ADFITECH creates a certified set of documents and data points, enabling secure access and delivery to investors, custodians, and other partners. This streamlined approach not only reduces processing time but also instills confidence in the accuracy and compliance of the mortgage documents.
Another significant milestone occurred in 2006, when Centex sold ADFITECH to Thornburg Mortgage. The decision was driven by Thornburg's recognition of the immense value in ADFITECH's proprietary imaging capabilities and fulfillment services. Our custom, secure imaging solution had been meticulously crafted to cater specifically to the unique needs of mortgage bankers. Over time, it evolved into an exceptionally sophisticated mortgage imaging software package, consisting of three integral parts - LOANVAULT®, inVAULT, and “Project Evolve”. This suite of tools empowered clients to manage their data and images easily and boost efficiency.
This provided many growth opportunities for the company. However, in 2008, the banking crisis bankrupted Thornburg and ADFITECH was spun out as a public company. Nevertheless, our dedication to innovation, precision, and unparalleled service remained unwavering.
Thankfully, in 2022, ADFITECH transitioned from a public company to join forces with Mortgage Connect, LP. This move was made possible thanks to ADFITECH's TPR (Third-Party Review) due diligence and our joint service capabilities. Teaming up with Mortgage Connect allowed us to tap into their expertise in default servicing, title management, and loss mitigation. The combined knowledge and resources of the two entities now enable us to uphold the highest review standards, fostering trust and confidence among all stakeholders.
The sales and acquisitions are just the major events in our own history. The advancements in technology and changes in consumer needs have presented their own challenges and opportunities throughout the past four decades as well. As we continue to grow and adapt, ADFITECH remains committed to delivering top-tier services, embracing technological advancements, and providing unparalleled support to clients throughout the mortgage process.
What technological advancements and innovations have shaped the quality control process?
The transition from paper to imaging processes was supposed to revolutionize the mortgage industry as loan files continued to increase in volume. However, even with the adaptation of loan document management software and organized image repositories, the systems were still maintaining copious amounts of information. This created the need for Optical Character Recognition (OCR) systems to sift through, identify, and extract key data from the stored images.
Once this technology is perfected, it will make the Loan review process easier in a lot of ways. Most of what our people do is data validation determining that things were done correctly through automation. So, it’s fair to say people are just as productive as they were back when we got started even though the complexity, volume of information, and regulations have drastically increased.
Even with all the industry advancements, ADFITECH spearheaded its own new technologies as our quality control and due diligence services grew. We developed a proprietary imaging system and mortgage document management platform, LOANVAULT®, which has been refined into an extremely sophisticated mortgage focused software package for handling clients’ data and images.
ADFITECH also created a correspondent whole loan purchase platform, V3, and built out a fully reviewed Third-Party (TPR) mortgage due diligence service.
How has ADFITECH responded to evolving client needs and expectations?
Client needs have not changed. They still need to know that they are complying with the myriad of regulations and require accurate data to rely on, but despite the increased complexity and volume, expectations have changed. The idea that technology is the magic answer has led to increasing client expectations for services to be cheaper and faster.
If regulations were frozen for ten years, things could become less expensive. However, increasing regulations in our current business cycle make it increasingly difficult to meet the faster, cheaper expectations. Regulations are the foundation for quality control and mortgage compliance audits, so we’ve had to learn to roll with the punches and meet our clients’ expectations in other ways.
How has ADFITECH maintained relationships with stakeholders?
Meeting clients’ expectations is a two-part system focused on differentiating yourself from everybody else in the market. The first part deals with your level of service. Did you get the work done on time? Is it reliable? Did you fulfill the client’s needs in the way they expected or, even better, exceed those expectations?
The second part is about creating confidence within the client relationship. Clients need to have confidence that you will fulfill obligations and do what you say you will do, and that’s a really crucial factor in client relations.
“I don't care if we have to do it with a number 2 pencil, eraser, and a yellow pad, we’re going to get it done.” - Tom Apel, CEO
When it comes to other stakeholders, such as the investors, they must be confident that what you deliver is accurate. We’ve always prioritized showing our competency and the competency of our employees when dealing with our stakeholders. There will always be somebody else out there to do the work, so we’ve placed value on creating relationships, not through fancy dinners or marketing gimmicks, but by showing that we are really good at what we do and delivering.
That highlights the hard work of our team here, and there is a reason we have people who have spent their entire careers with us. In our early years, there was a tremendous amount of growth and excitement, and that led to the emergence of a friendly, healthy, competitive culture between our employees.
Everyone wanted to be the best or the fastest, but it was all very good-natured. We worked hard, laughed a lot, and gave each other a hard time, creating a well-rounded work environment for the company. It’s always been a great place to work, and the loyalty from our folks here is simply incredible- our executive team alone has more than 150 years of experience and service with ADFITECH.
Looking ahead: what trends and opportunities do you envision for ADFITECH?
Our reputation has been outstanding for 40 years. We’ve navigated big changes while maintaining the core values that really matter to us and occupying new spaces in the mortgage industry.
In quality control, we are only reviewing a small percentage of the loans that a lender originates. However, as we become more of a participant in the transactions of loans, we take on more risk to become an integral part of the whole mortgage process as opposed to functioning only as a post-closing mortgage audit. The real opportunity presented to us is to be involved in every single transaction because everyone wants to ensure that what they are buying is worth what they are paying.
Looking ahead, I’d like to see ADFITECH become the de facto standard for QC and mortgage due diligence. Of course, things will change tremendously, just as they have before. The paper will go away, technology and AI will present new opportunities, and data will be much more ubiquitous, available, and standardized, but having the expertise will always prevail.
I hope we continue to evolve alongside the industry and technology toward that undoubtable expertise, and I believe we can by using the business intelligence that has kept ADFITECH at the forefront of the industry for four decades.
Work with an Experienced Mortgage QC Partner
Founded in 1983, ADFITECH leads the industry in outsource mortgage quality control. Reviewed by all five Rating Agencies, it serves over 500 diverse clients, including six of the top 10 lenders, Wall Street firms, and numerous small banks and mortgage operations. For over 40 years, ADFITECH has met each of its clients’ unique needs by combining state of the art, innovative technology with personal attention to every loan. ADFITECH continues to set the standards in mortgage quality control, servicing oversight, mortgage fulfillment, and mortgage due diligence by providing in-depth experience, unparalleled quality and unprecedented customer service that can’t be found elsewhere.
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