Mortgage technology

Web-based LOS Avista Solutions has integrated with verification service company Kroll Factual Data. This integration was done at the request of joint clients to allow Avista Solutions' customers to pull credit through Kroll without leaving the Avista Agile LOS. The Avista Agile platform lets users create loan applications online through the system or import applications from external loan origination software. The consumer website portal allows lenders to provide their customers online loan application, status updates, loan officer webpages and online disclosure. Now Avista users will have access to Kroll's credit service, which provides reports in both PDF and text file formats.

CoreLogic Credco has launched Instant Merge LQ and ENCORE LQ to help lenders be compliant with Fannie Mae Loan Quality Initiative requirements. Instant Merge LQ and ENCORE LQ were created to help lenders satisfy requirements under the new Fannie Mae LQI, an initiative designed to help lenders avoid loan buybacks. LQI, which went into effect June 1, 2010, requires lenders to proactively verify identity and disclose the status of all borrower debts immediately prior to pre-funding of the loan, including open and closed tradelines, public records filings or any new inquiries on the credit file. Credco's Instant Merge LQ is a solution for lenders to satisfy prefunding credit refreshes, while ENCORE LQ enables lenders to check credit, identity verification, property data, occupancy status and exclusionary list screening. Both generate a reporting solution for underwriter review.

Origination technology provider Calyx Software has launched MyCalyx.com, a self-service Web portal for users. MyCalyx was designed to simplify Calyx account management with Web access and greater administrative control over Calyx accounts. With MyCalyx customers can install upgrades to Calyx online. Each user is assigned a login and password to download new products and updates. Customers also now have greater control over seat assignments and can make changes online instead of uninstalling and reinstalling CD applications.

CoreLogic has launched Partner InfoNet, a program for sharing revenue with multiple listing service organizations. Through the effort, an MLS licenses its listing data for use in a variety of new risk management products for mortgage lenders, servicers and the capital markets. Until now, MLS organizations have lacked a safe and easy way to generate additional value for their members by applying their listing data outside of the real estate transaction. At the same time, lenders have lacked access to critical listing information that would help make better and faster lending decisions. The Partner InfoNet addresses both these issues by combining CoreLogic MarketLinx licensed MLS data with CoreLogic property data assets to create enhanced risk management products for lenders. CoreLogic provides data and analytics solutions to the mortgage community.

Freddie Mac and Fannie Mae have selected Veros Real Estate Solutions as a technology vendor for their Uniform Collateral Data Portal. The portal will support electronic appraisal data delivery to the government-sponsored enterprises as part of the Uniform Mortgage Data Program, launched this spring. The GSEs have said that to enhance their collateral risk management, they will require seller-servicers to submit full appraisal reports in electronic data format prior to loan delivery to either Fannie Mae or Freddie Mac, effective April 2011. UCDP will serve as a centralized portal for these submissions.

FIS will acquire Compliance Coach Inc., a vendor that provides risk assessment software, e-learning and tools tied to lending compliance matters. The transaction is expected to close within the next 30 days. Terms of the deal were not announced. This acquisition is a strategic move by FIS to enhance its overall compliance strategy. FIS will assume ownership of Compliance Coach's flagship products including Regulatory University, Compliance Risk Indicator and Compliance Pal. These solutions currently support approximately 1,500 clients, including seven of the top 10 depositories within the financial services industry.

The Federal Housing Finance Agency has launched a major new initiative by Freddie Mac and Fannie Mae to improve the consistency and quality of data for appraisals and other loan information, said the government entity on its website, which has both GSEs mandating the use of MISMO Version 3.0 data standards. "FHFA directed the enterprises to undertake the development of the standards to provide greater uniformity in the data they collect," said FHFA acting director Edward DeMarco. "This initiative is a major step toward meeting industry requests for uniformity in appraisal and loan data. Improvements in data quality will benefit all mortgage market participants and strengthen the housing finance system." The GSEs have now gone forward to standardize mortgage lending using MISMO as the backbone of all loan delivery to both GSEs. Specifically, Freddie Mac and Fannie Mae have developed the Uniform Loan Delivery Data Specification, which defines the Uniform Loan Delivery Dataset and the common GSE approach to single-family loan delivery data requirements for all mortgages that will be delivered to either GSE on or after Sept. 1, 2011.

Experian has expanded CreditHorizons for Securities, which delivers Experian's consumer credit information for nonagency mortgage-backed security deals, to offer the ability to link consumer credit data to Lewtan's private-label deal library, ABSNet Loan. This capability expands the CreditHorizons for Securities offering to a broader base of nonagency residential mortgage-backed securities investors. By linking consumer credit data to loan-level data, CreditHorizons for Securities provides an additional set of influences that helps investors better predict delinquency and default probabilities, obtain more granular data about the underlying collateral and understand how consumer trends impact their RMBS portfolios. Using a proprietary matching algorithm developed by Experian's credit and industry experts, Experian has achieved a high consumer-to-loan match rate in linking to Lewtan's data.

DocMagic Inc. has filed an amended complaint against Ellie Mae that expands the initial charges the former company levied against the latter. The amended complaint was filed in United States District Court (San Francisco) and is Case No. 3:09-CV-4017-MHP. Back in August 2009, DocMagic filed two lawsuits against Ellie Mae: one in Federal Court for antitrust violations, intentional interference with contractual relationships, interference with prospective economic advantage and unfair competition; and one in San Francisco Superior Court seeking a permanent injunction against Ellie Mae arising out of Ellie Mae's alleged misuse of DocMagic's proprietary information in connection with the Ellie Mae Docs system. At the urging of the federal court judge, the parties have since agreed to consolidate the state case claims into federal court and to dismiss the state case without prejudice. The amended complaint sets forth 14 federal and state claims, expanding on the allegations and claims initially made against Ellie Mae. The amendments include expansion of antitrust allegations and claims, including explanation of market definitions, monopoly leveraging, attempted monopolization, refusal to deal, and denial of access to essential facility (all federal violations of Section 2 of the Sherman Act). Charges of unfair competition and false advertising; copyright infringement; and trade secret misappropriation were also included in the amended complaint. DocMagic is also seeking a declaratory judgment that DocMagic did not infringe upon Ellie Mae's copyrights and that Ellie Mae has no claim to the ownership of its client's loan data. When asked to respond to the amended complaint advancing the lawsuit Ellie Mae said that it had no comment.

Valligent, a provider of appraisal review services, has introduced V-Cert, a new product which moves the quality control function to the front of the origination process. Jeremy McCarty, chief executive and chief valuation strategist of the Roseville, Calif.-based company, said one of the reasons he is attending the Mortgage Bankers Association trade show in New York is to meet with Wall Street investors and rating agencies to get them familiar with this concept. Issues over collateral are a major source for the lack of confidence in the market from an investor standpoint, he said. Doing the review before the loan closes will let secondary market purchasers know that if they buy a loan that eventually goes bad, at least the valuation was done properly. The V-Cert review includes an USPAP-compliant desk review, a fraud and foreclosure risk analysis and a value determination.

Calyx Software has expanded The Calyx Network with an interface update that provides links to new compliance, fraud prevention and verification vendors. The Calyx Network allows users of the Calyx Point LOS application to connect directly with lenders and mortgage service providers, automating data exchange. The May update contains a new connection to three new mortgage service providers including fraud detection and compliance vendor Interthinx Inc., product and pricing vendor Mortgage Pricing System and verification services T Transcript Processing. The Calyx Network interface update is automatically installed into Point versions 7.0 and higher when users open their software and connect to the Internet.

Fidelity National Information Services, which manages the largest residential servicing bureau in the nation, confirmed that buyout talks with Blackstone Group and two of its partners have ended. A leveraged buyout for the payment processing company could have reached $15 billion. The consortium bidding for FNIS pulled out because of a disagreement over price, according to combined press reports. FNIS' servicing platform has a market share approaching 70%, according to past research conducted by National Mortgage News and MortgageStats.com. The publicly traded FNIS, which was spun off by Fidelity National Financial, the title insurance giant, saw its share price fall 5% Tuesday to $27.50.

Clayton Holdings LLC, a risk analytics firm, said it has adopted new Fannie Mae promulgated quality control standards into its product offerings. The Shelton, Conn.-based Clayton said Fannie's requirements (mandated in lender letter LL-2010-03) requires GSE originators to create "written operational work flow procedures" and increases both post- and pre-closing work. Among the new chores, lenders must confirm ten basic data elements prior to closing.

Shares of Fidelity National Information Services rose for the second day in a row as rumors continued to circulate that the mortgage technology giant is in talks with the Blackstone Group LP concerning a buyout. In trading late Friday, FNIS' share price was relatively flat after soaring more than 15% Thursday-a day in which the Dow fell by almost 1,000 points before recovering. To date, Fidelity and Blackstone have declined to comment. Greg Smith, a managing director at Duncan-Williams Inc. who follows the sector, said he is "not overly surprised" that Fidelity would be an acquisition target, given "prior leveraged buyout interest" in the industry. For example, Kohlberg Kravis Roberts & Co. bought Fidelity competitor First Data Corp. for about $29 billion in 2007. First Data and its rivals have several features that are attractive to private-equity investors, including a "high degree of recurring revenue, strong free cash flow and relatively low valuations," Smith said. "I think you have all of that with FIS today." Last week Fidelity reported its first-quarter revenue surged 57.4% from the year earlier, to $1.25 billion, fueled by higher demand for its technology and its 2009 purchase of competitor Metavante Inc.

First American Corp., Santa Ana, Calif., has received consents from more than half of the holders of its 7.55% senior debentures due 2028 to amend the indenture, clearing another hurdle for the division of its information solutions and financial services businesses into separately traded public companies. The company needed the approval to make the change, as well as the previously received approval of holders of two other debt issues to make a similar change, so the split would not conflict with the terms of those indentures. The separation remains scheduled to take place on June 1. First American extended its tender offers to purchase the 7.55% senior debentures, its 5.70% senior notes due 2014, its 8.50% capital securities due 2012 and the 7.55% trust certificates issued by the Preferred Plus Trust Series Far-1 due 2028 to May 12 at 5 p.m., Eastern Time. Over 99% of the 5.70% senior notes have been tendered for purchase so far, along with 65% of the capital securities, 40% of the 7.55% senior debentures and 48% of the Preferred Plus certificates.

CUSO Prime Alliance, Tukwila, Wash., has acquired Dexma, a provider of online mortgage lending technology to more than 1,400 institutions. The combined company will be known as Prime Alliance Solutions. Joe Brancucci, CEO of Prime Alliance, noted that Dexma, Edina, Minn., helped create Prime Alliance, lending a certain amount of irony to the deal. "It is like a child is swallowing up one of its parents," he told Credit Union Journal, a sister publication to National Mortgage News. "I think it's a good move for a lot of reasons. We were ahead of our time in 2001, but today there are lots of opportunities." Financial terms of the deal were not disclosed. According to Brancucci, Prime Alliance has worked closely with Dexma over the past decade in creating new solutions for mortgage lending, especially to credit unions. He said the acquisition will allow the CUSO to take ownership of the technology Dexma produces. "We've always been part of the dialog, and have driven the development of a lot of aspects, but this takes the relationship to a new level." Prime Alliance and Dexma co-developed the Mortgage Lending Suite, which includes retail lending, third-party lending, loan fulfillment and secondary market centers. The two said they combine to handle 35% of credit union mortgage originations. Dexma's clients include U.S. Bank Home Mortgage, Weichert Financial Services and MetLife Home Loans. Since inception, more than 6 million loans have been processed on the Dexma platform, totaling approximately $1.1 trillion in loan volume.

ComplianceEase technology has been adapted to help originators keep compliant in the face of California's new high-cost lending law. ComplianceEase's ComplianceAnalyzer tool has been updated to enable lenders, brokers, and regulators to identify, in seconds, whether a loan falls under the new "higher-priced" category. Simultaneously, and on a single report, the system includes tests for the various federal statutes that can also place California lending licenses at risk under the new law. Under the new law, starting July in California there will be a new category of loans called "higher-priced mortgage loans." If a loan meets the attributes and thresholds that place it in the "higher-priced" category, originators face prohibitions regarding making "deceptive" or "misleading" statements about the loan to borrowers. Since it will be possible for civil penalties to be as high as $10,000 and directly assessed against individuals, lenders and brokers will need to know whether each loan they originate will be subject to the new restrictions and may make decisions about whether or not they decide to continue originating the new category of loans. California's restrictions in this area follow a growing trend among states to create a "higher-priced" category that is intended to subject a larger quantity of loans to additional restrictions. So far seven other states have created similar loan categories with increased restrictions.

A risk analysis firm said it is helping mortgage professionals access tax return amendment data that more common industry tax form verification efforts do not include in order to head off a growing fraud concern. The National Credit-Reporting System Inc. (NCS)/Credit Central, Egg Harbor, NJ, said it has added to its report that summarizes tax return transcripts a summary of the IRS's Record of Account transcript. The IRS Tax Return Transcript more commonly used by the industry does not provide information on amendments to returns, said Cecil Bowman, an NCS senior vice president and former IRS senior manager. The company instead recommends data from the Record of Account transcript that does include this information along with taxpayer identification number verification.

Mortgage software provider Ellie Mae filed to go public Monday morning after posting $38 million of revenues in 2009 and a profit of $1.7 million. The company offers no estimates on how much stock it will sell-or at what price-but notes in its IPO filing that its privately held shares have an estimated value of $47.2 million or $4.69 a share. The firm has entertained buyout offers over the past few years, but never completed a sale. The Pleasanton, Calif.-based company, known for its Encompass software, lost money in 2008 and earned a meager profit in 2007. In its S-1 filing with the Securities and Exchange Commission, the 13-year old firm says its Ellie Mae electronic network connects 55,000 mortgage professionals to lenders and service providers. In 2009, roughly 2.8 million of loans were initiated over its network-or about 20% of the market. Discussing the risks of its business, Ellie Mae cautions about "extreme turmoil" in the residential business, noting that its future performance hinges on attracting more customers to Encompass. Goldman Sachs & Co. is listed as the lead underwriter of the offering.

Chicago Bancorp, a retail mortgage banking company, has hired Jeffrey Walker as the new president of Chicago Bancorp Direct, its direct-to-consumer lending platform. Most recently he was with CitiMortgage Inc. where he was the managing director/executive vice president of national sales and lending. In his new role, Walker will be responsible for expanding the company's national footprint through Internet lending, call centers, and strategic partner relationships. He will be based in Chicago and assume his new responsibilities with the firm on May 1.