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Looking for Easy Access and Minimal Data Losses

Louisville, KY-As property valuations and document accuracy are carefully scrutinized when approving a loan or doing a loan modification, document imaging and processing providers also are reviewing how to avoid data loss and fragmentation.

The key is in getting the right documents and packaging it all together in accessible systems, says Conexxus LLC founder and CEO, Jeff Reibel. "Automating the process and making it very easy for people to find information, whether it's the seller or the buyer side, and have them share it, is very important. That's when sophisticated software empowers people."

Lenders and servicers are now looking for analogous document imaging and management solutions that can be used nationwide by users of different technology systems. Data storage accompanied by expedited searching capabilities that facilitate the use of specific search parameters from buyers or sellers helps make loan processing efficient.

"Right now what we're really seeing is that construction and development loans are a really hot area for nonaccrue and delinquency rates nationwide. These types of loans require significantly different underlying types of documentation. As bankers try to understand what they have, since when dealing with a construction project you may or may not know in what phase it is. At the point in time when the bank is looking to share that information with a potential buyer or investor that is a key development document that banks do not have in their files."

Moreover, banks may have hundreds of in-development housing projects around the country and each project has a file with anywhere from 150 to 200 different documents a buyer or investor has to review. But when it comes to automation some original documents are harder to scan. Tools available are specific to demand. For example, responding to the large inventory of real estate-owned properties, Conexxus offers its REO Optimizer platform. It is a combination of service offering and software that aims to help users gather documents on behalf of a bank or investor. Documents and information gathered on the ground is uploaded into the system and made available online for public view.

These days software allows users to cruise large numbers of properties because related data are easily accessible. The level of automation has increased to a level that allows for loan document information exchanges that can take a couple of weeks instead of a couple of months, which may still be the case for some shops.

Bankers, brokers and auctioneers are looking for better ways to pass needed information onto buyers and investors.

"You need to make sure you put all the right things together and put your best presentation forward to get a better response," he says. "The knowledge of gathering that information is one thing, but it's really the software that empowers it to be shared so people can make the right decisions and have the right information, whether it's a banker or buyer, whoever it is they need that information."

The current number of delinquencies and foreclosures is a new problem at the market level especially for servicers, and technology is helping bring in organization, structure and know-how. "It's such a big issue you really need to be properly organized to handle it."

How else is the crisis affecting the marketplace and changing or improving data access? There certainly is more automation in processing foreclosures. Also the processing of construction and development loans systems are building up.

"The crisis is new from the sense that even though there were foreclosures before, they were never this many. Plus, today we have a level of technology that did not exist before. People are looking at the best ways to use the Internet, but I think it has also created some fragmentation. You kind of need to know exactly what you're looking for to find something," he says. "There has to be a very good strategy around it not just throwing systems on top of each other because it may create more problems down the line and demand for information that you cannot fulfill because you do not have the manpower. The key is to package it all together."

The market, however, will take its course and eventually data exchange problems resulting from the fragmentation of information in the system. "Technology can help expedite that information share but if buyers and sellers cannot share the same perspective of information they're less likely to get deals done, which means properties and property developments are sitting longer. And the longer they sit, the more that impacts the economy at the macro level, the less jobs are being created." While mortgage technology providers and the industry at large is trying to figure out what is going to happen next, homebuilders are suffering from a down market. Nonetheless, the executive says market cycles allow for opportunities, but it may take longer if technology is not properly used to expedite the turnaround.

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