Mortgage technology

InsideValuation, a real estate valuation company based in Reno, Nev., has announced a partnership with International Financing Engineering Group, Rockville, Md., that has created a ZIP code-level mortgage default projection. The two companies offer combined access to millions of recent loan histories and "a large quantity" of subprime loan default information, according to InsideValuation. "This product presently allows mortgage risk managers to determine the relative safety of loans based on econometric and demographic variables relating to property location, such as median home price, median household income, affordability, unemployment, and rent-versus-price ratios," the company said. InsideValuation can be found online at http://www.insidevaluation.com.

BMC Software Investments Inc., an investment firm based in Hot Springs, Ark., has announced the acquisition of Loan-Score Decisioning Systems LLC, an Irvine, Calif.-based provider of automated underwriting systems. The terms of the deal were not disclosed. Loan-Score's products include an enterprise-class AU system, a product/pricing engine, a PDA-based pre-qual application, a bulk pricing application, and point-of-sale Web portals for all lending channels and product types, BMC said. The company said it plans to develop new offerings, expand Loan-Score's infrastructure, and hire additional development staff. "What has happened to the mortgage industry over the past year is unprecedented," said William McCord, chief executive officer of BMC Software Investments and chairman of Loan-Score. "Several AUS vendors have already closed their doors and a number of others are in trouble, which creates an opportunity for Loan-Score to dominate the AU space given the right investment partner." Loan-Score can be found online at http://www.loan-score.com.

TSS Software Corp., a software provider to the settlement services industry, has announced enhancements to its flagship product, TitleExpress. Among the enhancements are integrations with Calyx's Point loan origination system, reporting for United General Title Insurance Co., and the addition of iOrderOpen. TSS said the enhancements were all driven by customer requests. Versions 6.0 and higher of Calyx Software's Point will allow mortgage brokers to export data directly from Calyx to title companies using TitleExpress and iOrderExpress as the connection engines, TSS said. The addition of the iOrderOpen interface facilitates the automated submittal of orders and the conversion of external data sources into TitleExpress. TSS can be found online at http://www.iwanttss.com, and Calyx can be found at http://www.calyxsoftware.com.

ICBA Mortgage, the mortgage corporation of the Independent Community Bankers of America, and its partner Taylor, Bean Whitaker Mortgage Corp. have unveiled their newest product offering for community banks: Complete Mortgage Solutions. CMS gives ICBA member banks access to "consultative services that deliver a comprehensive blueprint for mortgage success -- from operational workflow, staffing, and training to technology, marketing, and mortgage products," said Terry Jorde, chairman of ICBA Mortgage and president and chief executive of CountryBank USA, Cando, N.D. Steve Reukhaus, CMS project manager at Taylor Bean, said the new product "can help community bankers streamline their mortgage operations, improve efficiencies, and explore new possibilities for growth and profitability." ICBA Mortgage can be found online at http://www.icbamortgage.com, and Taylor Bean can be found at http://www.taylorbean.com.

REO Sentinel, Jacksonville, Fla., has announced the introduction of a technology that offers "an inexpensive but high-value solution" to the problem of monitoring and maintaining presale and real-estate-owned properties. Rich Rollins, chief executive officer of the company, said the device, also called REO Sentinel, was developed in conjunction with loan servicers and a property inspection and preservation company. "For the first time, lenders and their property preservation managers can have real-time views into what is occurring in every defaulted property they are trying to market thanks to a small, patented device installed in each house," Mr. Rollins said. ".... [REO Sentinel] can detect many types of gases, the presence of smoke and high humidity conditions, and even takes a photo of anyone entering the property." The company can be found online at http://www.reosentinel.com.

First Florida Financial Group LLC, Fort Myers, Fla., has launched a program under CashToolBox.com aimed at helping builders and Realtors sell more properties by enabling borrowers to get a mortgage approval through the use of equity in their owned properties, or a relative's. Eddie Hoskins, president and chief executive officer of First Florida, said CashToolBox.com lends 125% LTV Pre-Closing Cash against a property's equity by using Mortgage Approval Tools such as the Credit Score Optimizer, Down Payment Assistance Gifter, Cash Reserves Booster, and Debt-to-Income Reducer. "When they generate needed cash and apply their 'tools' to un-approvable mortgage loan applications, in many cases they're able to get a loan approval and closing that had seemed impossible," Mr. Hoskins said. The company can be found online at http://www.cashtoolbox.com.

Home values continued to decline in the fourth quarter, falling 3.5% on a quarterly basis and 3.0% on a year-over-year basis, according to Zillow.com, an online real estate community based in Seattle. Zillow's quarterly home value report, which has been expanded to cover 125 metropolitan areas, found that home values stood at a Zindex home value indicator of $224,890, representing the median estimated valuation of all homes in an area. "With consecutive declines over the past five quarters, we haven't seen the housing market bottom yet, and it may very well get worse before things get better," said Stan Humphries, Zillow's vice president of data and analytics. "Even many markets that have been largely insulated from recent declines, like some in the Pacific Northwest, reported notable value declines in the fourth quarter." Zillow can be found online at http://www.zillow.com.

AllRegs, an information provider for the mortgage lending industry, has announced that its Ask the Expert--Legal Content Support Services will be offered through Smith Dollar PC, a mortgage banking law firm based in Santa Rosa, Calif. Eligible AllRegs subscribers will have unlimited access to Smith Dollar attorneys who can offer clarification on federal and state laws and regulations that reside in AllRegs' Information Service, AllRegs said. Smith Dollar is a California law firm that represents lenders and secondary-market investors in matters relating to mortgage fraud, lender liability, and regulatory compliance. AllRegs said Legal Content Support Service was created to help mortgage companies clarify the numerous changes in federal, state, and other regulations that affect the mortgage business.

The National Association of Mortgage Brokers has rolled out a trio of six-hour online professional training programs designed to help its members earn their Lending Integrity Seal of Approval. NAMB requires all members to meet the requirements to earn the seal by 2009. TrainingPro, Hunt Valley, Md., developed the courses. "These new classes reinforce NAMB's ongoing commitment to the highest level of professional ethics," said NAMB president George Hanzimanolis. "By making the classes available online, TrainingPro has made the high standards of the Lending Integrity Seal attainable for all brokers and originators." All three courses have a two-hours ethics component. Course 1 also discusses fair lending and consumer privacy, Course 2 covers FHA lending and Course 3 talks about recent industry developments and mortgage fraud. "Now, more than ever, it is essential that mortgage brokers, originators and other financial professionals have the continuing education they need to serve their customers," said Chris Nickerson, chief executive of TrainingPro. For more information about NAMB and the Lending Seal of Approval, visit http://www.namb.org/ and http://www.lendingintegrity.org/.

While many see the shrinking lender and vendor market as a bad sign, Scott Cooley, president of Cooley Consulting, told the 11th annual SourceMedia Mortgage Technology Conference that industry consolidation presents great opportunities for buyers with a long-term view to enter the market. Mr. Cooley warned that there are signs that a technology vendor isn't doing well. "They get real quiet: no updates, newsletters, their website is stagnant, etc.," he said. "Their support personnel are mostly gone. Press releases and joint venture announcements disappear. There's poor communications with compliance updates. Sales/collection calls get more aggressive. And finally, rumors start to circulate." But Mr. Cooley said times like these are good for companies looking to enter the mortgage market. "Yes, every lender is shedding licenses, and vendors are dropping like flies, but the best time to invest is when everyone else won't," he declared. "When you're at the bottom, there's no place to go but up. Times like these are rare: VC firms are starting to swarm, and technology vendors are hungry for sales." Silicon Valley, Calif.-based Cooley Consulting can be found on the Web at http://www.scooley.com.

Rahul Merchant, Fannie Mae's chief information officer, told attendees at the 11th Annual SourceMedia Mortgage Technology Conference in Orlando, Fla., that a variety of market factors will prompt lenders to look closer at certain types of technology. "Today there are lower earnings and capital scarcity, but there's also a need to operate in real time with better analytics, make productivity improvements, prevent security threats, and improve infrastructure," he said. So what impact will this have on information technology budgets? "In 2008, IT budgets are likely to grow slightly, but slower than in recent years," Mr. Merchant answered. "The Corporate Executive Board's CIO survey estimates that IT budgets will grow by 3.5% (1.5% above inflation). Further, Gartner projects a 3% increase over 2006." He predicted that lenders will be looking hard at technology to improve credit risk management, improve decisions through more precise and timely business information, implement early warning reports and credit loss metrics, make productivity/infrastructure improvements, and look toward architectural simplification. "Lenders still have to look to enable business growth," Mr. Merchant concluded. "So, they'll allocate a greater share of IT budget to business growth investments and innovation."

A common theme expressed by many at the 11th Annual SourceMedia Mortgage Technology Conference was that lenders in the current down market need to use technology to reinvent the way mortgages are done. "Now is the time to re-examine your business model," said Chris Jabbal, former chief information officer at Washington Mutual. "From there, lenders have to decide how they can support that business model and apply technology to be more efficient. One big focus in the market today is a shift to automating the back end by doing more concrete disclosures on 100% of loans." Joe Dahleen, senior vice president in the strategy recovery group at online lender SRGi, added: "Now is a great time for lenders to look closely at the process and change it, using automation to be ready for the new mortgage market that will emerge after this downturn subsides. We have to think differently about how we lend, to improve the process for everyone involved."

TVC Capital, a San Diego-based private equity fund focused on software acquisitions and investments, has acquired Del Mar DataTrac from Fiserv just two years after Fiserv originally acquired the product. Interestingly, Jeb Spencer, managing partner at TVC, served as Del Mar's executive chairman from 2003 to 2005, during which time the company's customer base more than tripled. Veteran company employee Rob Katz has rejoined Del Mar and will help lead the ownership transition. Details of the transaction were not disclosed. Fiserv will now focus more on its core business, which prompted the sale. "This divestiture further demonstrates Fiserv's focus on its core financial and insurance businesses and its Fiserv 2.0 goals of helping clients to achieve best-in-class status," said Tom Warsop, president of Fiserv's Financial Institutions Group. With over 15 years of industry presence, Del Mar DataTrac has been a provider of back-office lending solutions. Del Mar serves over 300 mortgage banking firms throughout the United States.

Ellie Mae, a Dublin, Calif.-based provider of software for the mortgage industry, has announced the release of Encompass Banker Edition 3.0 and Encompass Custom Edition 3.0. Custom Edition offers "extensive configurability" in a loan origination system, and Banker Edition is "a complete end-to-end business solution" designed for small to midsize correspondent mortgage lenders, mortgage bankers, community bankers, credit unions, and brokers interested in becoming bankers, Ellie Mae said. Most of the system enhancements will benefit both editions of Encompass. "Now, mortgage bankers can service loans prior to selling loans on the secondary market, track their profitability on trades, and configure notifications that alert them of key servicing activities, such as when statements must be sent out, when accounts go past due, and when they're scheduled to make upcoming disbursements," said Jonathan Corr, chief strategy officer for Ellie Mae. The company can be found online at http://www.elliemae.com.

Vienna, Va.-based VirPack, has released VirPack Vault, a hosted Web-based document management and electronic loan delivery platform designed to satisfy the needs of lenders and brokers from origination through post closing and investor delivery. VirPack Vault supports electronic delivery of credit, closed, trailing and all portions of a loan file to over a dozen investors and due-diligence providers. VirPack electronic deliveries are fully indexed and conform to each investor's imaging specifications, facilitating purchase review and eliminating non-indexed (blob) electronic delivery delays. The VirPack Vault platform is the product of the recent partnership between VirPack and Critical Technologies, a records-management company specializing in the mortgage industry. VirPack can be found on the Web at http://www.virpack.com.

Mortgage Settlement Network LLC, Pittsburgh, Pa. has acquired Mortgage Lenders Service Connection, a vendor management company headquartered in Cranberry Township, Pa. MSLC was owned by Ronald Wellman and was established in 2004. The financial terms of the deal were not disclosed. All MLSC employees will be retained and moving into the MSNi offices. MSNi is a national vendor management company. In addition to offering traditional title, closing and appraisal services nationally, MSNi also offers other solutions to assist lenders to streamline their operations and also generate additional revenue sources. Further, MSNi offers lenders an e-closing program that enables lenders to close loans electronically and then sell them to Fannie Mae on a flow basis. In addition, MSNi offers a commercial loan settlement services package of services: appraisal, title, closing, survey, EPA reports, all bundled together. The company can be found on the Web at http://www.msnillc.com.

Ron Duff of Fiserv Lending Solutions and Nancee Gorenstein of Mortgage Guaranty Insurance Corp. have been re-elected chair and vice chair of the Governance Committee of the Mortgage Industry Standards Maintenance Organization.The organization said it plans to focus on standards advancement, greater outreach to the industry, and an increased number of MXCompliance certifications. The Governance Committee is elected from a cross-section of the real estate finance industry and provides oversight for MISMO's administration and policy development. The committee consists of representatives from 22 subscriber organizations that serve staggered two-year terms. MISMO is a not-for-profit subsidiary of the Mortgage Bankers Association that develops data transfer protocols for the residential and commercial real estate finance industry. It can be found online at http://www.mismo.org.

Veros Real Estate Solutions, Santa Ana, Calif., has released the results of its quarterly forecasting of the nation's real estate markets, predicting the five hottest and coldest markets for the next 12 months. According to Veros, the five strongest markets in its coverage area over the next 12 months will be: Wichita, Kan., with a 4% appreciation rate; and, all with a 3% rate, Raleigh/Cary, N.C.; Sioux Falls, S.D.; Fargo, N.D.; and Tulsa, Okla. The weakest markets are forecast to be: Riverside/San Bernardino, Calif., down 15%; Modesto, Calif., down 15%; Palm Bay/Melbourne/Titusville, Fla., down 14%; Cape Coral/Ft. Myers, Fla., down 13%; and Sacramento/Roseville, Calif., down 12%. Veros, a risk management and collateral valuation services vendor, can be found on the Web at http://www.veros.com.

The Chinese affiliate of First American Corp., Santa Ana, Calif., has launched a website, the first of its kind in China. First Title (Beijing) Real Estate Guaranty Co. Ltd. is the first entirely foreign-owned real estate guaranty company in the country. "We want to integrate the real estate finance service chain in China," said Edward Ma, assistant vice president of information operations for First Title (Beijing). "Our website, backed by a specialized service team and partnership with leading industry practitioners such as Kblcw.com, Moneyschool.msn.com.cn, Kooxoo.com, and Pinggu.Soufun.com, provides loan product information to our clients in a timely manner." The website will serve as a one-stop, self-service platform for end-users by providing real estate purchasers and owners with the most up-to-date information on mortgage product options -- the Chinese version of escrow and other services for residential and commercial property transactions. The website is located at http://www.zhongyian.com.

Mortgage technology vendors are in for a rough ride, according to the 2007 Mortech study. Statistics show that lenders increased technology spending by approximately 8% over the past three to five years, said Mortech publisher Jeff Lebowitz. His projections before the credit crisis were that those same lenders would reduce tech spending by 2.0%-2.5% in 2008, but "with the demise and distress of major mortgage technology spenders" Mortech now projects that the decline could be 10% or more. "We have never seen the industry technology budgets being at such risk," said Mr. Lebowitz. "Most mortgage technology suppliers are pretty small -- under $50 million in revenues. Mortgage technology providers will have to be pretty resourceful to weather this storm." The 2007 study, based on a scientific sample of 330 lenders of all sizes, is now in its 20th year.