Niche Players Still Prominent in Default Servicing Technology

Despite the emphasis of large technology providers on incorporating default management and workout technology into core servicing systems, specialized technology providers still believe they can offer something better. And they aren't afraid to wrap their technology around a lender's basic servicing automation system.

Duke Olrich, President and CEO of DRI Management Systems, said it's clear what lenders want when it comes to default management technology. "What they want is rules based template oriented to user defined methodologies." The user-defined aspect is key. And service-oriented architecture allows companies such as DRI to provide that in a way that stresses simplicity and compatibility with existing systems, he said. In the old days, an individual had to review a file, assign an attorney to manage the default, and put it into a tracking system. Today, with SOA technology, the system itself can automatically push the loan onto the appropriate next step when one step is completed, all based on the criteria established by the investor who ultimately owns the loans. "A manager doesn't want a long list. They want an overview and the ability to drill down," Mr. Olrich said.

DRI also relies on .Net technology, which is the Microsoft framework for rapid deployment in the Web arena. Mr. Olrich describes this as a "very robust language" that facilitates rapid development and deployment of software applications. "The ideal would be that there would be as few touches at the servicer's shop in the default department as possible."

DepotPoint, an independent technology firm based in Bellevue, Wash., has created a Web-based workflow tool, TrackPoint, designed to make default management more efficient. With the spread of alternative loan products and higher interest rates creeping into the market, executives at the firm believe the time is right for new foreclosure management technology, especially with the industry anticipating higher defaults related to new loan products in the market. The company says that TrackPoint allows mortgage servicers and trustees or attorneys that provide foreclosure services to centralize default management on one Web-based, application service provider.

Chris Matty, senior vice president for sales and marketing, told MREO that DepotPoint's founders believe the real estate finance industry has been slower to adopt technology and automation than other industries. And they see TrackPoint helping to get all parties involved in foreclosure management on the same page. "The goal is that as a centralized system, no other system is required by any of those parties," Mr. Matty explained. In addition to TrackPoint, the company plans to role out loss mitigation and REO modules next year.

Sia Rezvani of the Oregon-based Rezvani Law Office is implementing TrackPoint, and Mr. Rezvani praises the system's trustee-friendly functionality. "TrackPoint helps me keep all my files on track and meet all of my deadlines," he told MREO. "There is no other technology I know of that meshes all the day to day details that the trustee gets drowned in into one single solution."

Tavant, a Santa Clara, California-based IT services vendor, recently unveiled its new default management system to the industry. The firm's executives believe that being new to the default technology arena is an advantage.

"The interesting thing is that in some ways, default management capabilities fit at the very center of the economic performance of a lender," said Christophe Knoess, Tavant's vice president of mortgage solutions.

"The way we developed the systems, we made sure that the underlying core architecture is something we can reuse." (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com