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Victoria Capital Outsources Back-Office Ops To Guardian Mortgage Services
By James Comtois
In order to enable focus on plans to expand its regional presence and add more mortgage professionals to its business, Victoria Capital's wholesale mortgage banking division, Victoria Funding Services, has outsourced a large part of its closing and post-closing operations to Guardian Mortgage Services. GMS, a division of Guardian Mortgage Documents, provides customized back-office outsource services to lenders of all sizes and serves as a 100% variable cost alternative to managing these operations internally.
GMS uses its proprietary web-based Transaction Management System technology to automate vendor management, document production, management functions and workflow into one centralized, paperless model that provides Victoria Funding with 100% visibility and control. GMS also offers title and escrow services for its customers.
The Los Gatos, Calif.-based Victoria Capital, which started as a mortgage broker and become a regional mortgage bank three years ago, has doubled its loan volume every year. It operates in eight states: Oregon, Washington, Colorado, California, Nevada, Utah, New Mexico and Arizona. Victoria Funding has aggressive plans to expand into Idaho, Texas, Wyoming and Montana.
"With our focus on expanding into additional Western states and adding more wholesale and retail originators, our relationship with GMS has played a key role in allowing us to focus on our core business, origination and secondary markets," said Mike Kent, CEO of Victoria Capital. "We are a regional provider that can aggregate loan production from a large menu of loan products at a low cost and we are interested in the synergy this business brings. And part of our low-cost business structure is not having a back office to manage because it is expensive and time consuming and it dilutes our focus."
Victoria Capital started working with GMS a little more than a year and a half ago. The management team credits GMS for cutting the company's warehouse turnaround time in half to seven days. In addition to cutting the warehouse turn time by 50%, GMS has exceeded Victoria Capital's expectations by having high-level customer services, standing behind its word if any errors are made and having a strong communication network.
"Now that we are in a market where option ARMs are so popular, the negative spreads on them are phenomenal, so if you can get them in and out of your line in seven days, you've really saved yourself quite a bit of money," said Mr. Kent.
In building its new business process, Victoria Capital did not want to be stuck with the back-office expense, additional manpower or space that would be needed to accommodate GMS' services. Victoria Capital's management originally thought about bringing the closing services in-house. However, once it considered the drain on a company's business focus, it was hard to calculate any cost savings.
"Many new start-ups and companies that are completely re-tooling their back-office activities are making a strategic decision not be held hostage to huge legacy systems with high fixed costs. This strategy is helping lenders drive significant and profitable growth in a down market," said Tim Anschutz, vice president of marketing for GMD. "Our ability to offer a 100% variable back-office cost allows our clients to focus on other key revenue generating activities."
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