Investor Nabs OnePipeline
March 11, 2002
Financial Services Company Takes Over Brand Name, Business Model
Inman News Features
OnePipeline, a provider of systems that allow real estate agents to earn compensation for online home mortgage loan originations, has been acquired.
The Salt Lake City company this week sold its brand name, business model and intellectual property assets to Alliance Capital Partners, a Jacksonville, Fla.-based financial services holding company that has interests in several mortgage companies and Priceline.com?s mortgage-shopping service.
OnePipeline CEO Dave Broadbent last October denied an industry rumor that then-new CFO John Rowberry had been brought on board specifically to prepare OnePipeline for sale. But Broadbent said at the time that the company was open to the idea of being acquired.
The company had enough cash to last through year-end 2001, Broadbent said, and had cut its staff 28 percent from 54 to 32 people. The cutback resulted largely from a switch from in-house salespeople to an outside sales representative.
A year earlier, the company signed a two-year technology and marketing deal with Homestore, under which Homestore agreed to use and promote OnePipeline?s technology. The deal also gave Homestore an equity interest in OnePipeline. A Homestore spokesperson wasn?t immediately available to confirm whether the company still owns that investment or received any cash from Alliance Capital?s acquisition of OnePipeline.
OnePipeline?s customers included Realty Executives International in Phoeniz, Ariz., the Florida Association of Realtors, The Keyes Co., Realtors, in Florida, and Prudential Ballard Realty in Alabama on the brokerage side and First Ohio Mortgage Corp. in Cleveland, MortgageIT.com in New York City, Pinnacle Financial Corp. in Orlando, Fla., Flagship Mortgage in Montgomery, Ala., and Lakeland Regional Mortgage Corp. in Florida on the mortgage banking side.
A September 2001 deal between OnePipeline and Assurance Partners Bank added independent insurance agents to the mix. Assurance is a federally chartered savings bank funded by more than 260 mutual insurance companies.
A spokesperson for OnePipeline said last year that the company had signed up about 10,000 desktop mortgage originators and that about 10 percent of them actively were using the company?s program. The total reportedly included a handful of the nation?s largest mortgage lenders and several hundred mortgage brokers in 46 states.
Alliance Capital Partners? subsidiaries include First Alliance Bank and Alliance Mortgage Co., which services approximately $25 billion in loans and has lending activities throughout the United States. Alliance operates PricelineMortgage through a joint venture of Priceline.com and BNY Mortgage Co., a joint venture between Alliance and the Bank of New York.
Alliance Capital President Robert Clements said OnePipeline would complement Alliance's strategy of providing mortgage services to its business partners and enable those companies to offer a one-stop-shopping experience for mortgage borrowers.
The company said BNY Mortgage will begin offering the OnePipeline service in the tri-state area of New York.
OnePipeline?s competitors include LoanWorks, which also offers a mortgage system for real estate agents, and GoLoan, a California-only startup venture in Beverly Hills, Calif., that offers a private-label product that allows agents to originate home loans.
GoLoan earlier this month reported an 82 percent increase in the number of brokers who signed up for its service in the first two months of 2002 compared with the same period last year. The company did not disclose its total number of brokers.
Online mortgage services are designed to allow residential real estate brokers and their sales representatives to reap loan origination fees in addition to brokerage sales commissions. Other benefits claimed by the sponsoring companies include quick approval times, easy-to-complete online application forms and live loan officers standing behind the scenes to process the loans.
But GoLoan founder and President Adi Harari indicated agents haven?t been quick to sign up for these services.
"Although I was convinced this would be a major success among brokers, I still had to convince them and their sales reps and getting their attention is not often very easy," Harari said.
Harari tells skeptical brokers they will receive the entire loan origination fee for filling out one page of information, submitting supporting documents and completing several other tasks that are delineated and tracked on GoLoan?s Web site.
Copyright: Inman News Service
Contact ALTA at 202-296-3671 or [email protected].