The announcement that IBM has received approval for mortgage originations could be bigger news than many might first imagine. This could be the entrance of mortgage as a service (MaaS) taken from the lessons of SaaS.

IBM Lender Business Process Services, or LBPS, received clearance to provide mortgage origination services for federally insured Federal Housing Administration (FHA) loans.

When it announced the unit’s launch in March, IBM said the unit would fill a void in the lending space, particularly for small and midsize lenders.

The Charlotte-based unit will allow mortgage lenders to replace the fixed costs that are associated with typical loan fulfillment operations with a variable-cost framework. This in turn will free up lenders to provide better service and support to consumers, IBM says.

LBPS will offer a variety of lending services, including loan application, underwriting, processing, vendor management, document preparations, and loan closing.

In a market where lenders are looking for operational efficiency, outsourcing the enormous overhead and disjointedness of a technology division in a 30-60 day cyclical mortgage business model may make sense beyond the small and medium size operations.

Tags: banking, mortgage, software, technology, lending services, FHA, IBM