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By Maureen Flanagan
eLynx was founded in the mid-1990s in an attempt to electronically and securely handle the huge volume of paperwork needed to close mortgage transactions. The company developed the first web-based electronic document delivery (EDD) system to securely transmit mortgage documents. Founded in 1999 by the 65 Group LLC, a Cincinnati angel investor group, the company further enhanced its technology and its EDD system was soon in demand by top mortgage lenders across the U.S.
Today, eLynx is the industry standard for secure EDD solutions within the mortgage space and serves 16 of the top 30 U.S. mortgage lenders. By providing instantaneous delivery of electronic documents in a secure environment, eLynx offers significant cost savings compared to traditional paper and overnight delivery while enabling lenders to both meet increasingly complex compliance regulations and improve their business processes. eLynx is currently used by over 100 lending institutions and is expected to deliver more than a quarter of all mortgage closing packages in 2004. Moreover, eLynx continues to sign up additional leading mortgage lenders.
In a December 2004 acquisition, American Capital provided a $39 million financing package consisting of a senior term loan, subordinated debt and redeemable preferred and common equity. eLynx's senior management also made an equity investment.
eLynx joins American Capital's portfolio which currently includes more than 100 companies in a wide range of industries. Since 1997 American Capital has invested more than $3 billion in middle market companies.
For more information about American Capital's portfolio click here. "eLynx is the clear market leader in terms of technology, expertise, experience and innovation," said eLynx President, CEO and Co-Founder Phil Huff. "The company has recently added e-signature capabilities to its EDD offerings as well as enhanced functionalities that will make it easy for other document-heavy industries outside the mortgage space to take advantage of eLynx's rapid and secure electronic document processing."
eLynx's core Web Posting Service (WPS), constructed with over 500,000 lines of proprietary code, enables clients to seamlessly and securely deliver mortgage applications from lenders to closing agents and attorneys through a common Web browser. Users are able to combine disparate files such as Word, Excel and Adobe PDF with images and scanned files to create the complete mortgage package in one easy step.
The company's uSign™ product incorporates both electronic delivery and electronic signature capabilities and complies with recent legislation regarding electronic signatures. This service, embedded into WPS, enables homebuyers to directly receive, verify, approve and return electronic mortgage applications and disclosure forms, thereby eliminating the costs and delays of traditional paper delivery.
The company also offers eLynx PRO, a desktop platform that captures documents from any application, interfaces with the user via a familiar email-like appearance and provides Web-based security. This platform makes PRO an ideal application for addressing the security delivery needs of industries such as legal, healthcare, retail and automotive finance.
"Several market trends combined with financial institutions' continuing outsourcing of certain transaction process functions are expected to increase the number of EDD transactions as a percent of the total mortgage market," said American Capital Principal Todd Wilson. "With the current limitations and inadequacies of email and fax delivery for processing confidential documents, companies will be looking to eLynx for more secure, less vulnerable and more cost-effective delivery."
New laws such as the Sarbanes-Oxley and the Gramm-Leach-Bliley Acts are increasing the demand for electronic transaction-based services within the mortgage industry due to their imposition of more stringent data, confidentiality and security protections. eLynx, which already incorporates these required protections into its processing solutions, is expected to continue benefiting from this trend.
Technological innovations such as e-signatures will result in more business opportunities. Industry analysts expect that the company's EDD services will be attractive to other parts of the financial services industry, where e-signature technology and secure electronic delivery solutions are becoming increasingly attractive. Moreover, the eLynx PRO product should also appeal to other industries that have similar requirements for secure, confidential document handling such as legal, healthcare and government.
With its leading position, growing customer base, and superior management team, eLynx will remain at the forefront of the rapid shift towards paperless mortgages and other financial transactions.
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