Basis100 enters US mortgage market
Basis100 acquires Solimar.Net, a profitable US e-commerce mortgage player
Strategic entry point brings significant customer base
TORONTO, Jan. 24 /CNW/ - Basis 100 Inc. ("Basis100"), a leading
Internet-based e-commerce solutions provider, announced today that it has
formally entered the United States mortgage market with the execution of an
agreement to acquire Solimar.Net, a profitable business-to-business e-commerce
company based in Orange County, California.
Basis100 has entered into a definitive agreement for the purchase of 100%
of the outstanding shares of Solimar.Net. The purchase will close February 8,
2000, in an all cash transaction valued at US$24 million. Solimar's strategic
advantage is its advanced property valuation technology, marketed to Fortune
500 banks, mortgage lenders, brokers, loan portfolio securitizers and other
financial institutions across the United States. Basis100 will create a
Delaware, US-based corporation to support the new subsidiary and additional
activities in the US.
"We are extremely excited about this transaction as our first major
acquisition in the US mortgage market," said Gary Bartholomew, Chairman and
CEO of Basis100. "Solimar's unique property valuation technology supplies a
key component of our 2 Minute Mortgage strategy. With its automated appraisal
process, Solimar delivers residential property valuations in seconds."
Basis100 will fully integrate the property valuation engine into its 2 Minute
Mortgage strategy enabling more consumers to be approved for a mortgage in
under 2 minutes. The property valuation engine will also be offered on various
real estate and mortgage portals so consumers can quickly determine the value
of their property.
Solimar's market-proven technology refines and analyses a growing
database of recent US home-sales transactions and applies proprietary
algorithms to sort through the array of variables involved in determining a
home's most probable selling price. This "valuation engine" presents a
property valuation estimate, well known in the industry as a "Solimar Value"
(along with a confidence score to support the analysis). Lenders use these
valuations and confidence scores to support the underwriting and sale of
mortgages and to reduce their need for far more costly traditional appraisals.
Solimar's Internet-based technology reduces the cost of the appraisal step by
80-to-90% and provides near-instantaneous reports.
Solimar's core property valuation engine underlies a range of products
essential to easy information-gathering by consumers, loan officers, mortgage
brokers, real-estate agents, appraisers, mortgage-backed securities
professionals, insurance underwriters, and others.
"There are approximately 12 million residential loan originations
annually in the US market plus more than 40 million loans that constitute a
major private debt sector," stated Larry Hudack, CEO of Solimar. "Each
property that moves through the origination process provides us with an
opportunity to value that property about 3 times before that loan becomes a
part of a fixed income security. In residential lending alone this yields
approximately 36 million valuation opportunities annually. By pooling
resources and by leveraging the management depth, technical scaling strengths
and capital markets access of Basis100, we fully expect to unlock a major
portion of this huge North American opportunity." The US appraisal industry is
estimated to generate annual revenues in the billions of dollars.
Solimar automated valuation products are available to all intermediaries
in the mortgage process. Traditional appraisers also benefit from Solimar's
strong and effective desktop tools to speed their work flow. Consumers can go
to Internet mortgage portals such as HomeGain.com and request an immediate
valuation on their properties.
Over 250 mortgage related businesses across the US use the Solimar system
today, including Wells Fargo, Chase Funding, Ocwen Federal Bank, First
Franklin Financial, Washington Mutual, Ameriquest, and Chicago Title, to name
a few. Solimar services are also used by the securitizers who continually
assess the value of the properties in their mortgage pools for hedging
strategies and to monitor the underlying value of asset backed securities.
Speaking from his offices in West Palm Beach, Florida, David Babbitt, a
Senior Manager of Ocwen Realty Advisors (a unit of Ocwen Federal Bank) has
high praise for Solimar. "We employ their on-line valuation alternatives as
part of our risk management process and have had a successful relationship
with Solimar dating back to 1996. The Basis100 acquisition should take Solimar
to a new level for automated valuation services."
When asked about the acquisition of Solimar.Net by Basis100, Steve
Skolnik, a Senior Vice President at First Franklin Financial said, "We use the
Solimar system as an important production tool and the Solimar linkage with
our loan processing system has enabled us to make major reductions in loan
origination costs and time. With Basis100 ownership we expect our e-commmerce
relationship to expand."
Solimar valuation services are available in 425 counties in 40 states,
covering over 75% of residential properties in the United States. By combining
the resources of the two companies, management believes continued aggressive
revenue and earnings growth can be achieved during FY2000 and beyond.
About Solimar.Net
Solimar.Net, a pioneer in automated valuation technology and database
systems was founded in California in 1979, by Larry and Marianne Hudack and
provides a number of collateral risk assessment services through an automated
residential property valuation system accessible via the Internet.
Solimar.Net's services are available both to institutional users seeking
valuation results one-at-a-time and to large bulk users who can obtain
high-speed valuations of large loan portfolios. Solimar.Net regularly
processes portfolios of 100,000 properties with 24-hour turn-around.
About Basis100
Basis100 currently operates in North America and is listed on the Toronto
Stock Exchange under the trading symbol BAS. The company, a leading provider
of Internet-based business-to-business e-commerce solutions, focuses on
creating mortgage, consumer credit, securitization, and fixed income
electronic marketplaces. Basis100 provides its technology to financial
institutions, intermediaries, and service providers.
For further information: Michael Kraemer, Communications Manager,
Basis100, (416) 364-6085 Ext.: 106, mkraemer@basis100.com |
