Mortgage technology

Lenders Asset Management Corp. has launched LAMCO Vendor Management Process, which evaluates, scores and ranks LAMCO-endorsed vendors.LAMCO is an REO management company. LAMCO qualifies new vendors and manages ongoing service provider relationships using the elements of TQRDCEB, a framework developed by Hewlett Packard Co. Vendors are evaluated on technology, quality, responsiveness, delivery, cost, environment and business impact using a scorecard system based on a weighted strength ranking. Service providers are selected as a LAMCO vendor based on their performance within the TQRDCEB system and are routinely evaluated on the same scale to measure performance, identify areas of improvement and promote an environment where the status quo is challenged.

The Independent Community Bankers of America has expanded its preferred service provider program with Wolters Kluwer Financial Services to include the company's RESPA and Regulation GG Tool Kits, as well as the company's suite of Regulation CC products. Wolters Kluwer Financial Services introduced all three solutions to financial institutions in 2009 to help them address regulatory changes. Under the terms of the expanded ICBA preferred service provider relationship, Wolters Kluwer Financial Services will provide ICBA community bank members with access to the company's RESPA tool kit, Regulation CC solutions and Regulation GG tool kit.

Columbia, S.C.-based origination vendor Avista Solutions said it has updated its Avista Agile suite of products such that it is compliant with the changes to the Real Estate Settlement Procedures Act that go into effect on Jan. 1, 2010. The updates are available for retail, wholesale or correspondent lending channels. At the heart of the RESPA change is the consumer concern that the initial transaction outlined in the Good Faith Estimate can change by the time the loan is closed, with unexpected fees showing up on the HUD-1 Settlement Statement. The new rules require that the documents be consistent, and if there are changes, they be supported by specific documented changes in the circumstances of the loan. Avista Solutions provides side-by-side comparison screens for users to check for variances between the GFE and HUD-1. All changes of circumstance can be tracked and are available for review.

As mortgage brokers feel the pinch, Mortgage Options of America Inc., a full service mortgage broker, has managed to save more than $20,000 in operating costs while reducing its loan fees more than 15% by automating. Specializing in first and second mortgages, debt consolidation and refinancing, MOA is licensed in Florida, Maine, Massachusetts and New Hampshire. Because the majority of its employees work on the road, the company needed total transparency, which it was not receiving from its previous system. This spurred the company's decision to switch to Xetus' XetusOne Loan Origination System. Prior to utilizing XetusOne, MOA had costly server needs, a T1 fiber optic line, and had to devote a lot of time backing up files and updating software. MOA credits a lot of its success to its strategic plan to automate.

More smaller banks and credit unions are adopting online, integrated point-of-sale technology to grow in the current down market. For example, Louisiana Federal Credit Union of LaPlace, La., decided that offering an online mortgage application would not only enable the organization's two-person mortgage team to increase their application volume, but would also help LFCU become a bigger player in the local mortgage market. As a result from 2004 to 2009, LFCU has used Mortgagebot's PowerSite technology to triple its annual mortgage volume without having to add staff. Similarly, Illini Bank, a $248-million-asset commercial bank with 12 locations near Springfield, Ill., had actually exited the mortgage business until realizing that a lack of mortgage products was costing them business to competitors. The bank implemented PowerSite Consumer as its direct-to-consumer mortgage website - enabling self-serve borrowers to quickly apply for mortgages online. Illini Bank has benefited significantly from its online solution, citing an average annual increase in application volume of 71% over the last three years.

Zillow Mortgage Marketplace is launching its first distribution deal with online real estate brokerage Redfin. Visitors to Redfin's website can now fill out a mini loan request form on the "Financing Your Home" page of the site. This brings potential borrowers to Zillow Mortgage Marketplace, where they can complete the Zillow Loan Request Form and instantly get custom quotes - all anonymously - from Zillow's network of thousands of lenders. Once borrowers submit a loan request, they receive, on average, 22 custom quotes from lenders nationwide. After comparing quotes, borrowers decide which lenders to contact, responding lenders don't call the borrower.

Dorado Corp., San Mateo, Calif., said that Dave Parker has been promoted to vice president, business development. In his new role, Mr. Parker will oversee all aspects of Dorado's business development efforts including technology and value-added reseller partnerships. He previously served as director of business development. In prior roles, he has served as director, sales platform development at Wells Fargo and chief executive officer at Praxis Technology Group. Before Wells Fargo, Mr. Parker served as chief operating officer at MortgageHub.

Tree.com Inc. has entered into a limited extension of its $50 million mortgage warehouse line at its LendingTree Loans operation in Irvine, Calif. One of its warehouse line providers, PNC Bank, had previously said it was exiting the warehouse business and existing lines would expire at the end of their current terms. The Tree.com facility had an original term running through Dec. 29, 2009 and is now available for funding newly originated agency and FHA loans through March 31, 2010. Matt Packey, Tree.com's CFO, stated, "This brief extension, coupled with our two other warehouse lines, enables us to maintain flexibility as we evaluate our longer-term needs and options with respect to our warehouse capacity requirements."

The volume of requests for conforming loans submitted online to Zillow's Mortgage Marketplace last week dropped 26% from the prior week. Last week 63% of requests were for purchase loans, 35% were for refinances and 2% were for home equity loans, according to Zillow. The week previous to last Zillow said 55% of requests were for purchase loans, 43% of requests were for refis and 2% were for home equity product.

Document preparation vendor DocuTech has partnered with LOS Wipro Gallagher Solutions to more tightly integrate compliant documents into the lender's origination platform. The integration enables lenders to generate compliant documents and disclosures from any Web connection. NetOxygen Cirrus is WGS' Web-based LOS that enables lenders to take advantage of a streamlined service to enter, monitor and maintain loans through a scalable platform hosted by WGS. The integration with DocuTech's ConformX allows for the streamlined deployment of a more end-to end, enterprise wide LOS. This integration also provides users with internal compliance and document services, including support for disclosures.

International Document Services Inc., Salt Lake City, Utah, expects state mandated high-cost audits to become a more time-consuming concern for mortgage lenders in 2010. State-specific high-cost regulations should be a source of concern for lenders, according to IDS president Curt Doman. The company is advising lenders to test their ability to provide evidence that meets and satisfies state-specific requirements.

The closure of ISGN Solutions Inc.'s acquisition of Fiserv Inc.'s loan fulfillment services business is helping the former company move forward with its larger plans to reorganize, according to an ISGN spokeswoman. The deal, slated to close in November, took slightly longer simply because of holiday season delays, the spokeswoman told NMN. The company's larger reorganization refocuses servicing and origination functions for marketing purposes, she said. This was done to mirror the organization structure of the lending industry, the company serves, according to the spokeswoman.

Origination vendor Ellie Mae has acquired compliance provider Mavent for an undisclosed sum, National Mortgage News has learned. "In terms of what's going on in the industry, it was an opportunity that came along and fits strategically with what we think our clients need," Jonathan Corr, chief strategy officer at Ellie Mae told NMN. Employees from both companies will be merged. Mavent president Lou Pizante initially will stay to oversee the transition, but his future with the company is not decided, said Mr. Corr. "We're integrating the two organizations. Lou will work through the transition." Mavent analyzes electronic mortgage loan data to determine whether a mortgage transaction complies with over 330 federal and state consumer protection laws related to mortgage lending.

Automated underwriting and pricing engine provider PriceMyLoan and advisory firm Mortgage Capital Trading are introducing an interface that links their technologies and allows for pipeline hedging. The Automated Loan Pipeline Hedges and Analysis interface feeds loan pricing data from the former's AU and pricing engine into the latter's proprietary hedging model. The interface is designed to automatically update the hedging model when a lender locks in a rate.

Fannie Mae is raising its minimum credit score to 620 from 580 and lowering its maximum debt-to-income ratio to 45% to reduce future defaults. These underwriting changes go into effect the weekend of Dec. 12 as part of an update to Desktop Underwriter - Fannie's automated underwriting system. "The adjustments reflect careful analysis of a borrower's ability to repay their mortgage obligation over the life of the loan," said Fannie spokesman Brian Faith. Fannie claims that borrowers with credit scores below 620 are generally nine times more likely to become seriously delinquent than other borrowers. In modifying loans, "we have seen too many borrowers where their other consumer debt has jeopardized their success at homeownership," Mr. Faith said. He noted that none of these changes apply to Fannie's Refi Plus program, which provides a streamlined refinancing option for existing Fannie borrowers that have loan-to-value ratios greater than 80% and up to 125%.

Phoenix-based CCG Catalyst now offers contract negotiation services to financial institutions for vendors such as loan origination systems, servicing and online banking providers. As banks seek ways to cut costs, many are looking to contract negotiations with their existing vendors as a way to streamline operating expenses. In the case of contracts that were signed during prosperous times in the industry, institutions are looking at renewals in regards to their decreased budgets and investigating whether they are receiving enough value from their investment. CCG Catalyst has found significant savings for institutions that enter into early renewal talks with their vendors. The service also helps to assess if an organization has gone too far with concession requests so a vendor no longer views the business as profitable.

CredStar, a credit information provider for credit unions and the mortgage lenders, has been cleared to sell to its customer base the Encore report from First American Credco. Encore, CredStar said, is a consumer reporting solution that delivers Fair Credit Reporting Act-compliant risk analysis for critical elements of the mortgage application and servicing processes. CredStar is also part of the First American family. Encore gives users a "decisionable" view of the consumer and lending transaction, including applicant credit risk, identity verification, applicant income and employment verification, subject property and market data. Encore searches public, private and proprietary data sources covering 99% of the population, over 100 million active loans and more than 600 million consumer data records. A customizable rules-based analysis of the data is provided, along with recommended actions.

Experian, Costa Mesa, Calif., has created a suite of "ability to pay" products for use by mortgage lenders and brokers, among other credit grantors. Ability for a borrower to repay the mortgage loan is one of the hot button topics coming out of the mortgage crisis. The first product, Income Insight, provides an estimate of a borrower's individual income utilizing verified income data and proprietary credit bureau attributes. This product complies with the Fair Credit Reporting Act and the Equal Credit Opportunity Act, Experian said. The company targets customers while considering the complete financial picture, it improves risk-management efforts by including modeled debt-to-income ratios and it aims to accurately segment defaulted borrowers to maximize collection processes. Income View is a Web-based tax verification service that provides clients with what it said is reliable IRS 4506-T processing and prompt access to applicants' verified income via the Internal Revenue Service.

Equifax Inc. has acquired Rapid Reporting Verification Co., a privately held fraud detection firm, for $72.5 million in cash. The publicly traded Equifax said having Rapid Reporting in its stable will enhance its ability to provide lenders with "improved products, quality and services to help them better control fraud." RRVC is a specialist in IRS tax transcript information and social security number authentication services. Based in Fort Worth, Texas, Rapid Reporting products include IncomeChek, which provides IRS verification of income tax information, and DirectChek, which provides Social Security Administration verification of social security numbers and also meets USA Patriot Act compliance requirements.

Tree Inc., which operates the LendingTree.com website, saw its third quarter revenues fall 17% sequentially but was able to add a $75 million warehouse line of credit. The publicly traded mortgage bank/lead generator lost $7.4 million in the third quarter, compared to a slight profit in 2Q. In the year ago quarter it lost $22.6 million. According to its earnings statement, the company was hurt by what it called "unanticipated items" including $4.2 million in loan loss settlement requests and additional legal costs associated with a lawsuit. Even though the company lost money in the period, revenue at its lending operation — its largest segment by that measure — increased 21% from a year earlier, but fell 34% from the previous quarter to $24.1 million. The company said the decrease was primarily driven by higher interest rates, which led to a 31% drop in loan production, to $620.2 million. Its new warehouse lender is JPMorgan Chase & Co.