One of the interesting outcomes of the ongoing mortgage mess is that formerly distinct areas of the business, those that never would have seemed complimentary in the past, are quickly becoming more closely intertwined. Even -- dare we say it -- complementary. The latest example is Denver-based LenderLive Network, Inc., a single-family mortgage business process outsourcing and origination technology provider, which said Monday that it had named Richard Sauerwein to manage its newly-formed specialty origination business channel. What LenderLive calls "specialty origination" is essentially what most on the servicing side would call portfolio retention or loss mitigation; and the company's move across the gulf that tends to separate lending and default management signals that the industry is integrating in ways that likely weren't seen as viable even six months ago. It also signals the length that origination tech firms will go to in order to keep new business flowing. "Servicers are currently overwhelmed by unprecedented delinquency and loss levels as a result of the sub-prime mortgage meltdown and sharply declining real estate values in many parts of the country," said Rick Seehausen, president of LenderLive. "LenderLive recently formed the Specialty Origination business channel to expand the long-standing traditional portfolio retention unit that it has maintained for years." Seehausen said that roughly a year ago, the company began to notice that customers it contacted regarding portfolio retention instead wanted origination solutions tied to troubled debt restructuring and refinancing for at-risk borrowers. "This was the genesis for creating the entire business unit dedicated to contacting existing customers of clients to provide a host of loss mitigation solutions," he said. Origination back-office provider as loss mitigator? Believe it. "We are capable of diagnosing the challenges customers are having making payments on their mortgage loans, deciding upon the best course of action that suits the customer and client objectives, and then actually executing the solution through our fulfillment centers," said Sauerwein. "Most servicers are performing these same functions with their portfolios but are simply swamped." The move by LenderLive comes as a growing number of hedge funds are looking for alternative portfolio management solutions for the distressed mortgage assets they acquire; not surprisingly, Sauerwein's prior experience includes managing an MBS hedge fund for Highland Financial Holdings Group, LLC in New York. He also ran the single-family guaranty group for financial guarantor Financial Security Assurance for more than 10 years and for his own firm, Stonehenge Financial Partners LLC, which provided financial advisory services. For more information, visit http://www.lenderlive.com.