Mortgage technology

The paperless and electronic signature technology that's been slow to catch on in the mortgage origination business is finding a place in the loss mitigation arena, according to speakers at a session of the Mortgage Bankers Association Mortgage Servicing Conference.

Mortgage vendor CoreLogic, Santa Ana, Calif., lost $35 million in the fourth quarter after booking a non-cash impairment charge and taking a loss on the sale of discontinued operations.

Origination services and technology at Lender Processing Services showed annual and quarterly revenue gains in the fourth quarter of 2010. But its corresponding business in the mortgage servicing and default arenas closed out the year with quarterly declines, according to recent regulatory filings.

Unemployment, property depreciation and general economic hardship are some of the attributes why RealtyTrac.com is predicting that there will be over 1.2 million homes repossessed by banks in 2011, which would be a 20% increase from repossession rates reported in 2010.

The January Lender Processing Services, Inc. Mortgage Monitor report once again shows that if there is a light at the end of the tunnel it is still quite far away as the number of properties that are 30 days or more delinquent or in foreclosure remains at a staggering 6.922 million.

The robo-signing fiasco only highlighted the fact that having the paperwork in order is equally critical for lenders, servicers, investors and borrowers.Mike Wileman, president and CEO of Orion Financial Group Inc., Southlake, Texas, is one of many industry veterans who see paperwork accuracy and transparency as a powerful factor that is affecting how the industry is and ultimately will conduct business in the future.

A pair of rulings from federal bankruptcy judges last week is adding a new wrinkle to the role of MERSCorp Inc. in state foreclosure proceedings.

Cleveland Selfreliance Federal Credit Union said it has converted to the XetusOne Loan Management System, using it as an online mortgage origination platform.

Mortgage servicing may be changing and self-adjusting into a new still-not completely undefined model, but the fact that it appears to be a work in progress is not discouraging bankers from eyeing what it has to offer.Without much fanfare the crisis has irreversibly turned in-house mortgage servicing and specialty servicing into hot markets.

After receiving notice that he’s under investigation by the Securities and Exchange Commission, CoreLogic Chief Financial Officer Anthony "Buddy" Piszel resigned late Thursday.

ISGN, a technology vendor with products across the entire spectrum of mortgage finance, is considering offers for the company, or possibly strategic partnerships, according to industry observers familiar with the matter.

Focus: Servicing — A special report on mortgage servicing technology•Hub Evolution — Are systems of record keeping up with the times?•Ending Robo-Signing — Technology to ensure compliant default servicing•Neutralizing E-Mortgage Myths — Preventing paperless loan foreclosure problems•Loss Mitigation Automation — A Q&A with IndiSoft CEO Sanjeev Dahiwadkar

The mortgage division of Equifax, Atlanta, had fourth quarter revenue of $29 million, up 27% from the same period in 2009.

Technology vendors are expecting tempered demand for their products, even as banks begin to turn the corner toward financial improvement.

Financial technology vendor Fidelity National Information Services Inc.'s sales rose 8.8% from a year earlier to $1.4 billion in the fourth quarter, the company said Tuesday.

Altos Research has launched an automated valuation model that uses current real estate listings to forecast future housing valuation trends.

Mountain America Credit Union said it now offers the option for all of its Utah members to close mortgage transactions electronically.

Mortgage origination services and technology at Lender Processing Services generated annual and quarterly revenue gains in the fourth quarter of 2010, including a 31.8% spike in settlement services revenue. But LPS said its Loan Facilitation Services segment operates in a sector likely to see marketwide potential revenue dive nearly 30% in 2011.

Welcome to Mortgage-Technology.com I’m Austin Kilgore.As the servicing industry continues to adjust to the changing mortgage landscape, technology is evolving to meet those needs.Lender Processing Services has long been the dominant provider of mortgage servicing technology. It’s flagship product, the Mortgage Servicing Package, is used by more than half of servicers in the United States.MSP is the servicer’s system of record. When a mortgage is performing, the system’s automated processes saves time and money. But when a mortgage becomes delinquent or goes into default, ancillary technology is needed to integrate with MSP and perform high-level functions.Servicers have used MSP in one form or another since the 1960s, but it’s not without its critics, explains Jeff Lebowitz, president of the Oregon-based mortgage technology consulting firm Mortech.“They’re the IBM of servicing at LPS. People have been grumbling about the system being out of date for 30 years. But they keep using it because it’s good enough. They are the dominant player and if you’re making the decision about switching systems, or want to if you’re the IT manager or the servicing manager, you need to have a pretty good reason to get off of LPS.”But LPS Chief Information Officer Joseph Nackashi says MSP is a stable and reliable platform that benefits from $100 million in investment every year — money that goes toward updating MSP to meet compliance and business changes and upgrading it to take advantage of new technological advancements.At the end of the day, when you step back and look at the LPS architecture today and the core system of MSP and what it represents, is it still a mainframe-based application? It absolutely is. And with that mainframe-based application gives us the kind of reliability and scalability that a large customer like a Chase and a Wells enjoy today — our ability to turn year-end cycles in record-breaking time; our ability to provision access to the data in a near-24/7 mechanism.Another topic concerning servicers is the expected growth of electronic mortgages in the foreclosure pipeline.Experts predict that the gradual rise in paperless originations will result in growing levels of e-mortgage default — even after the current flood of delinquencies subsides.Legislation that paved the way for electronic commerce more than 10 years ago spells out the technology and workflow requirements that originators, servicers and their attorneys must maintain for e-mortgage compliance. But it’s still a new and relatively untested concept, with little precedent to alleviate uncertainty.Adding to the confusion are consumer advocates spreading inaccurate myths about the legalities of e-mortgages, including some using faulty logic to spread the idea that judges are throwing out e-signed mortgage documents in foreclosure cases.That simply isn’t the case, explains Kim Weaver, vice president of product management at Wisconsin-based Fiserv Lending Solutions.There are over 200,000 e-notes, which I know is a drop in the bucket compared to the millions of mortgage loans originated every year. But still, I do know that there are loans secured by electronically signed promissory notes that have unfortunately gone into foreclosure or other reconciliation and no, that has not been an issue. I think that’s because of the care the mortgage industry took to put in place the right kind of documents, the right kind of systems and most importantly, the right kinds of checks and balances.To combat the misconception, e-mortgage advocates continue to mount an aggressive education campaign to explain to lenders, servicers and the legal community about the benefits of e-mortgages.You can read those stories and more in the February edition of Mortgage Technology magazine.In late February, the servicing industry will converge on Dallas for the Mortgage Bankers Association annual National Mortgage Servicing Conference and Expo.Scheduled to appear are key regulators from the Department of Housing and Urban Development and the Federal Housing Finance Agency, as well as executives from Fannie Mae and Freddie Mac and the nation’s largest servicing shops.The event will feature specialized tracks focusing on loss mitigation, foreclosure and bankruptcy, regulatory reform and business operations. I will be there, along with other members of our editorial team, so please reach out and let us know if you’re attending.Thanks for watching. For more on the latest daily news and commentary from the mortgage industry, visit Mortgage-Technology.com and NationalMortgageNews.com, sign up for our free e-mail newsletters and check out the latest editions of our print publications.In this video get a sneak peak at the February edition of Mortgage Technology magazine and the special report on mortgage servicing. Also, a preview of what the servicing industry will be talking about at the upcoming MBA conference.

MortgageDashboard has launched an online community to promote communication among the customers of its loan origination system products.