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Fri, 07/31/2009

By Maria Dinzeo

SAN FRANCISCO (CN) - Mortgage loan software and services provider Ellie Mae is trying to crush competition by denying access to its online mortgage transaction system ePass Network, software rival DocMagic claims in a federal antitrust complaint.

DocMagic says Ellie Mae has cut it off from a market worth $200 million by denying it use of ePass, a Web portal that allows mortgage lenders to prepare closing documents online.

EPass "takes the highly fragmented mortgage industry and makes it accessible via one interconnected electronic network embedded in several of the industry's most used loan origination systems," and Ellie Mae boasts that "as much one-third of all mortgage loans written in the United States passes through the ePass Network," according to the complaint.

DocMagic claims Ellie Mae agreed to let it into the ePass system for a fee, but suddenly terminated the agreement, taking "drastic steps" to deny DocMagic customers access, "including sabotaging its clients by preventing access to DocMagic through alternative [non-ePass] Web service calls."

DocMagic claims Ellie Mae has been encouraging its customers to "use Ellie Mae's competing mortgage loan document system," and is prohibiting people from bypassing the ePass Network to connect to DocMagic.

DocMagic wants Ellie Mae enjoined from monopolizing the online mortgage document market, and punitive damages for antitrust violations. It represented by Joel Deutsch with Jeffer Mangels of Los Angeles.