Mortgage technology

The foreclosure crisis has enhanced the need for accurate asset valuations at the secondary market level and data transparency from loan origination to the servicing of securitized loans.

When it comes to traditional technologies in default servicing, the word "transparent" always ends up being paired with some unpleasant descriptives: "Difficult to understand," "Hard to find information" or "More excessive than what I am looking for" are the few words that usually follow the word transparent.

Let's suppose for a moment you needed to buy groceries for your family, but were short on money. Then, by sheer luck, a friendly man approaches you with an envelope. Inside, he says, there's enough money to buy all the milk, eggs and produce your family needs for a week. Now suppose the supermarket is several blocks away, on foot. Before you start off, do you look in the envelope to see how much money you have to work with?

Regulatory changes continue to largely drive automation for those on the production side, especially when it comes to documents, according to executives at DocMagic Inc., Carson, Calif., which does business as Document Systems Inc.

In recent months industry vendors and financial services executives —especially mortgage lenders and servicers —have shared a renewed focus on technology evaluation and selection.

There's more evidence that the paperless mortgage, an idea that has been heralded and debated for at least the last 15 years, has a ways to go yet before reaching a 50% market penetration.

Tustin, Calif.-based Veri-tax LLC, which provides tax verification and fraud management solutions, has been acquired by private investment firm Blue Horizon Capital for an undisclosed sum. The acquisition will provide additional capital and resources to support Veri-tax's growth initiatives.

For lenders who are concerned about "subpar" appraisal quality, it's important to have a technology platform in place to manage multiple AMCs and compare the work of different outsource vendors in order to determine which ones are the best to use.

Now that the industry has moved to a full-doc environment, application misrepresentation is happening on the back end of the business where "it's like doing new origination" and there is the most room for potential fraud in documentation.

Real estate property valuations are repeatedly called the cornerstone of the mortgage transaction and more so in a volatile marketplace where the REO inventory keeps growing and home prices are volatile at best.

Borrower credit scores and ways to assess risk are a priority and expected to become increasingly more important to the financial services industry.A provider of analytics and decision management technology, FICO of Minneapolis reports over 2,500 banks and financial institutions have adopted its FICO 8 Score, used for consumer credit risk assessment inquiries.

In the first half of this year, DocuTech Corp., a compliance services and document technology firm, has added 25 new clients."We are experiencing one of the most trying times in the history of the mortgage industry with regard to meeting regulatory demands and managing numerous operational challenges," said Scott K. Stucky, chief operating officer of Idaho Falls, Idaho-based DocuTech.

Dorado Corp. has received a Notice of Allowance from the U.S. Patent and Trademark Office for the method it created for processing a loan application (including mortgages). The notice means the government is likely to issue a patent.

Download the August 2010 issue of Mortgage Technology magazine. In this issue:

Independent private equity firm Monitor Clipper Partners has invested "an undisclosed amount" in Denver-based Mortgage Cadence, a provider of enterprise lending solutions, loss mitigation technology and document services.

A study based on borrowers' cognitive psychology reactions may change what mortgage documents will look like three years from now.In a classic case where science plays "the devil's advocate" for the mortgage industry, a couple of academics are researching the fluid relationship between borrowers and their mortgages to see where it might be improved.

So-called paperless mortgages still have a long ways to go, but the number of people who believe they could be a few years away from a 50% penetration of the market has grown in the last two years, according to a survey on the topic that is done roughly every other year.

It was 30 years ago that Lester Dominick founded MortgageFlex Systems Inc. And to prepare for the future, the company is moving into a new environmental-friendly headquarters in Jacksonville, Fla.

Technology provider Genpact Limited of Bermuda has been awarded a seven-year contract to provide services support to MERSCORP, Inc., the mortgage industry's electronic loan registry system.

In its first quarterly report as an independent company, CoreLogic, Santa Ana, Calif., had net income of $24 million, down from $29 million in the first quarter and $70 million one year prior.