In the early 1990s, Don Kracl was frustrated by the tedious business of coming up with accurate mortgage quotes for his customers.

Plugging rates and other variables into spreadsheets took a lot of time and often produced quotes that were erroneous or not up-to-date.

“I’d spend most of my day trying to calculate rates,” Kracl said. “I thought there had to be another way.”

So he began tinkering with computer programs that could do the work for him.

Though his background was in mortgage banking, he had some computer experience. His company, Mortech Inc.,  began as a distributor for a local software company.

But there still was a lot to learn.

“I kind of had to learn the computer stuff, because nobody else knew how to do it,” the 51-year-old Kracl said.

Eventually, though, it all came together, and the result was a product that revolutionized the way mortgage rates are calculated for prospective borrowers.

What began in Kracl’s basement has turned into one of the top mortgage rate software companies in the country, serving more than 250 clients.

Few outside the banking world have ever heard of Mortech, but those in the mortgage business know how valuable the company’s products are.

What Kracl’s software did was take a process that used to be done mostly by hand, with a loan officer plugging dozens of variables into a spreadsheet, and automate it, making it faster and more accurate.

“It’s something that used to take 20-30 minutes 10 years ago, and even then the probability for error was very, very high,” said Scott Stern, CEO of Lenders One, the nation’s largest alliance of mortgage companies.

“Now,” Stern said, “you can do it in 45 seconds.”

Lenders One has been using a piece of Mortech software called SRPcalc for several years, Stern said, and its clients do thousands of rate searches a month with the software.

“It’s very slick, very accurate,”  Stern said.

Lincoln’s TierOne Bank uses a version of Mortech software called TPOcalc, which is targeted at third-party loan originators, said  Douglas Alford, a first vice president in TierOne’s mortgage banking department.

TierOne has more than 100 of its own loan products and also buys loans from 40 to 50 smaller banks, Alford said.

With those kinds of businesses, he said, TierOne loan officers have to be able to plug in dozens or even hundreds of variables and be able to produce a quick and accurate mortgage quote.

TPOCalc does that with ease, Alford said.

“It’s pretty indispensable,” he said.

Indispensible products or not, any company’s prospects could suffer when its industry is in a downturn, as the mortgage industry is now. Lending institutions have tightened standards since subprime mortgages began going sour. 

But Kracl said Mortech isn’t suffering. “We’re growing pretty good,” he said.

The company has grown to 20 employees, and earlier this year, the company bought the building that houses its office.

Kracl said the company has annual growth of about 40 percent, and that number tends to be even higher in off years for the mortgage industry, for some reason.

While Mortech has lost some customers because of mortgage woes, “we’ve actually replaced them with better customers,” said Kracl, who started his company 20 years ago next month.

One of those new customers is well-known online mortgage site LendingTree, which earlier this month signed on to use Mortech’s Marksman software.

Marksman is an “all-in-one” product that not only calculates loan rates in real time but also determines a borrower’s eligibility for a certain loan, according to Mortech’s Web site.

In addition to being extremely accurate, it’s lightning fast.

Kracl said LendingTree tries to provide quotes within 5 minutes, while Mortech’s standard with the Marksman software is 5 seconds.

“We are looking forward to a marked increase in the speed, accuracy and customer service tools offered by the Marksman platform,” said Loudoun Enswiler, LendingTree senior director of lender technology, in a press release.

Initially, only LendingTree clients who are current Mortech clients will use the software, Kracl said.

That’s about 20-25 companies  of the 250 or so that are part of LendingTree.

But Kracl expects to have about half of LendingTree’s member companies on board with Mortech by the middle of next year.

He’s also talked with LendingTree about providing additional services and said he’s optimistic about getting more business from the lending group.

“I think it’s gonna work out fine,” Kracl said.

Landing LendingTree is one more achievement in a long list of successes for Mortech.

With that success has come suitors interested in buying the company, a prospect one would think Kracl, at 51, might consider.

Not a chance.

“We make a pretty decent living,” he said. “I really don’t have much interest in selling the company out.”

Reach Matt Olberding at 473-2647 or molberding@journalstar.com.