Mortgage technology

AllRegs, an information provider for the mortgage lending industry based in Eagan, Minn., has announced the acquisition of Lender E-Source, a Web-based purveyor of mortgage lending product and underwriting guidelines.The terms of the transaction were not disclosed. Lender E-Source provides solutions that allow lenders to manage constantly changing loan product and underwriting guidelines through a searchable, automatically managed loan guideline library. "Lender E-Source's LoanLibrary is a perfect complement to our Single-Family Lending Package of GSE and governmental guidelines, as well as our state and federal compliance products," said Glenn Ford, founder, chairman, and chief executive officer of AllRegs. Derek Long, the founder of Lender E-Source, will join AllRegs as senior vice president of content and delivery. AllRegs can be found on the Web at http://www.allregs.com.

A pilot program aimed at the nation's estimated 6.8 million non-owners with "thin" credit files is being tested in the nation's capital, where an alliance of public and private entities have pledged $200 million to get the initiative started.Under the R-Home program, consumers who are often unable to qualify for financing under traditional underwriting guidelines or are steered toward high-price loans will be qualified using an innovative automated program powered by Anthem, First American Corp.'s alternative credit-evaluation model. CitiMortgage will buy loans generated by nonprofit and private-sector participants and sell them on the secondary market, but retain the servicing rights. Borrowers will be counseled before the purchase, and counseling will be made available afterwards if they have trouble making payments. If problems persist longer than 60 days, the Neighborhood Housing Services of America says it will repurchase the loans and work "personally and patiently" with borrowers to get them back on track. "We see this as a model of how all borrowers should be supported, not just low-income borrowers," said Mary Lee Widener, president of NHSA.

Livonia, Mich.-based Flagstar Bank has gone live with mortgage closings using electronic signatures, and was preparing to sell its first e-mortgage the afternoon of Oct. 4.The most common misconception about e-closings is that the e-signed closing requires additional hardware, but Flagstar is doing a click-sign that can be done with an everyday computer mouse. Beyond the benefits that go along with e-signing itself, as part of post-closing, Flagstar automatically pre-populates the necessary data to answer all needed post-closing questions. Most of those questions are cleared automatically by the data transfer itself and come up with a "cleared" message to the post-closer. This eliminates the need for manual post-closing and mitigates the chance of buybacks by the investor. Flagstar says it is committed to e-mortgages as a business philosophy and will start small, but quickly ramp up to doing heavy e-closing production.

Ellie Mae has announced that Encompass Banker Edition is now available as a hosted system., enabling mortgage bankers and brokers-becoming-bankers to leverage the software on a pay-as-you-go model without having to maintain it in-house.As a hosted system, Encompass Banker Edition allows mortgage bankers to take advantage of Encompass without expending the cost and time associated with deploying and maintaining the software and the necessary computer servers. Moreover, the Encompass Anywhere platform is also being upgraded to offer improved streaming technology, Ellie Mae said. "Bankers, and brokers considering becoming bankers, are ideal candidates for the Encompass Anywhere platform," said Jonathan Corr, chief strategy officer of Ellie Mae. "With Encompass Banker Edition's hosted solution, companies get the same high-quality solution that Banker Edition provides, but with the convenience and lower up-front cost of a software-as-a-service model." Ellie Mae, based in Dublin, Calif., can be found online at http://www.elliemae.com.

The Mortgage Bankers Association has established a new residential technology forum dedicated to identifying and discussing issues pertinent to residential software and service providers.The Residential Technology Providers Forum is intended to provide a broader membership opportunity for technology providers than the current Residential Technology Software and Services Subcommittee, which will cease to exist, the MBA said. Enrollment for the forum will be open through Oct. 12 and is limited to one representative per company, or one per division of larger conglomerate companies. The association can be found online at http://www.mortgagebankers.org.

The Office of Thrift Supervision has closed NetBank in Alpharetta, Ga., after the $2.5 billion thrift sustained "significant losses" in its mortgage banking business and was unsuccessful in completing a private sale.NetBank, which opened as an Internet bank in 1997, is still solvent, but the OTS said the depository had no remaining prospects for raising capital or achieving profitability. "While the institution continued to operate in excess of minimum capital standards, the actions taken to address these problems were unsuccessful and it became clear that high operating expenses combined with continuing losses were jeopardizing the institution's viability," the regulator said. As the receiver, the Federal Deposit Insurance Corp. has arranged for ING Bank, Wilmington, Del., to assume the insured deposits. The Internet bank had $109 million in uninsured deposits, and those depositors will become creditors of the receivership. Meanwhile, EverBank, Jacksonville, Fla., has agreed to purchase $700 million in mortgages and the FDIC will retain $1.1 billion in assets. The FDIC says it expects the bank failure to cost the Deposit Insurance Fund $110 million.

Intellidyn Corp., a Hingham, Mass.-based marketing firm, has announced that it now enables clients to identify and target refinance offers to homeowners currently in the market who had originated with lenders that no longer exist."Years of business intelligence data show that typically 50% to 60% of refinance borrowers return to their prior lender for refinancing," said Intellidyn president and chief executive officer Peter Harvey. "But now more than 130 of those lenders have 'imploded' and disappeared from the landscape. Identifying these homeowners, then targeting them with appropriate offers when they are in-market to refinance again creates a mini-boom-type niche that won't last very long. By enabling our clients to capture this opportunity in a timely manner, Intellidyn is providing a critical survival mechanism to bolster lenders facing a challenging fourth quarter." Intellidyn can be found on the Web at http://www.intellidyn.com.

Peter Muriungi has been named senior vice president at EMC Mortgage, Lewisville, Texas, and he will head the company's Financial Analytics and Structured Transactions (F.A.S.T.) and business information teams.Since joining EMC in 1999, Mr. Muriungi has been involved with the development and deployment of default risk models, deal performance analytics, and other valuation models as part of the F.A.S.T. and business information groups. EMC, a subsidiary of Bear Stearns, developed the F.A.S.T. system.

ARC Systems of Austin, Texas -- which offers loan underwriting and related software to mortgage bankers -- is considering selling the company, or what its president calls "our intellectual property."Company chief executive and founder Ed Jones said the technology provider has not yet hired an investment banker to represent it. "We're a clean company," he said. "We have no debt." Founded in 1984, ARC flourished during the subprime boom as lenders and investors bought its software to analyze nonconforming loans. Over the past year, some of its mortgage banking clients have either exited the nonprime niche or filed for bankruptcy protection. LendTech is one of its software products. The company can be found online at http://www.arcsystems.com.

Axis Financial, a Seattle-based company that bills itself as a one-stop shop for construction loans, has announced the launch of a new website.Tyler Simmonds, a principal partner in the company, said the Pacific Northwest and the Inland Empire are still growing, contributing to the company's expansion. "You will find that most mortgage brokers and loan officers don't understand the construction process, and shy away from these transactions," he said. Axis Financial's new website can be found online at http://www.wefundconstruction.com.

San Francisco-based Compass Analytics LLC has announced the release of its Mortgage Servicing Rights Analytics to provide loan-level and aggregated modeling capabilities for mortgage servicers and servicing investors.The MSR Analytics, developed with input from Denver-based MountainView Servicing Group, will be released as a fully integrated part of Compass's mortgage analytics platform CompassPoint. The system will include both static and option-adjusted spread valuations and will allow analysts to use loan-level adjusters on all models, include integration to industry-standard prepayment models, integrate accounting functionality, and include speed-enhancing parallel processing. According to the announcement, the MSR Analytics will be available for hosted and installation implementations. A specific MSR Trading option will also be available. The company can be found online at http://www.compass-analytics.com.

L2C, an Atlanta-based credit scoring company specializing in helping lenders reach the "underbanked" market, has announced the release of a new version of its Link2Credit Score customized for the mortgage industry.The mortgage-specific score was launched to provide a more accurate risk assessment tool for evaluating underbanked applicants, the company said. "In the wake of the subprime meltdown in the mortgage space, lenders are reluctant to extend loans to consumers with thin credit, even though many of these prospects are actually low-risk," said Mike Mondelli, president of L2C. "By using our mortgage-specific version of Link2Credit to identify these low-risk consumers, mortgage lenders are finding a new, relatively untapped market that can boost profitability without incurring the risk posed by subprime borrowers." The company can be found online at http://www.l2cinc.com.

The Mortgage Asset Research Institute, a Reston, Va.-based service of ChoicePoint, has announced the release of what it calls the first phase of a series of enhancements to its Mortgage Industry Data Exchange antifraud database.The redesigned MIDEX 2.5 offers new features to assist the mortgage industry in identifying individuals associated with mortgage fraud. "A new user interface has been developed to help users access and categorize information more quickly," MARI said. "Additionally, the search logic has been improved to return results that are most relevant to queries." MARI can be found on the Web at http://www.mari-inc.com.

Citing declining market conditions, Portellus Inc., Irvine, Calif., has announced plans to wind down its mortgage technology business unit and sell the unit's supporting technology assets.Portellus said, however, that arrangements have been made to preserve the company's multipurpose business rules management system, which will continue to be sold via licensing agreements into other vertical markets. "After assessing the market's technology buying landscape over the next 18 to 24 months, Portellus elected to discontinue its mortgage business and instead focus efforts on more promising BRMS prospects," the company said. Portellus said it is divesting itself of its mortgage technology operations and plans to hold an auction for its intellectual property and other assets. Portellus' mortgage technology framework includes: a Web-based loan origination system; a product and pricing engine; an automated underwriting system; an integration services hub; and point-of-sale portals for the broker, retail, and correspondent lending channels. The company can be found online at http://www.portellus.com.

Rochester, N.Y.-based Xerox Corp. plans to buy e-collaboration vendor Advectis, Atlanta, for $32 million.Xerox’s expertise in document outsourcing and related services is what led the company to Advectis, a privately owned business. Advectis' Web-based BlitzDocs Collaboration Suite helps lenders, brokers, and investors manage the process needed to underwrite, audit, collaborate, deliver and archive loan documents electronically. "We're looking to help clients reduce costs and transform their business by offering a better experience for both end-users and operations," said John Kelly, president of Xerox Global Services North America. "Xerox's expertise in automating document processes is an ideal fit with Advectis' BlitzDocs paperless solution for mortgages." Xerox's all-cash purchase of Advectis also includes an additional performance-based supplement to the sale price. The acquisition is expected to close in the next 30 days. All Advectis employees will be retained. Xerox's document technology and services portfolio includes consulting and outsourcing services, records management, digital imaging, e-discovery for litigation support, and managed services in more than 160 countries.

MISMO, the not-for-profit data standards subsidiary of the Mortgage Bankers Association, has relaunched its website, touting updated content, search options, navigation, and design features.MISMO said the new features include: an updated search engine; more-intuitive navigation; updated content on MISMO (the Mortgage Industry Standards Maintenance Organization) and technology issues; a new user login system that allows MISMO to use the MBA's single sign-on capability for all MBA websites; and the ability to sign up for multiple listserves simultaneously. MISMO can be found online at http://www.mismo.org.

The mortgage market will continue to undergo a reshuffling over the next year, and "innovation and execution" will be the keys to success, according to Fiserv president and chief executive Jeff Yabuki.Speaking at the company's annual client conference in Nashville, Tenn., Mr. Yabuki said alternative-A, subprime, and nonconventional borrowers are not going to go away, but how mortgage lenders lend to them will have to change. He joked that Fiserv launched its 2.0 effort last year just in time for the industry to go through lending 2.0. Existing conditions will cause the emergence of new leaders and the disappearance of old ones as the market corrects, he said. The keys to ensuring that a lending institution emerges as a leader will be "innovation and execution," Mr. Yabuki said. Fiserv intends to give lenders more control to define their business practices by introducing new scripting functionality, embracing open architecture, and helping them consolidate into one unified system. Lenders that execute well over the next year will be the next leaders, Mr. Yabuki predicted. "Everything is going to be fine," he said in talking about the health of the mortgage industry in the long term. Mr. Yabuki advised lenders to just "get back to work."

BearingPoint Inc., a management and technology consulting firm based in McLean, Va., has announced tools aimed at helping lenders manage growing portfolio risks before they result in loan defaults and foreclosures.BearingPoint's Credit Navigation Tools provide capabilities to help evaluate portfolio risk and manage and improve lending processes, the company said. "The industry is demanding tighter control of their loans through improvements to what has largely been an inexact process," said Christopher Formant, executive vice president of BearingPoint's Global Financial Services. "To help manage the immediate needs of banks and lenders, we can put a set of tools in place that will help deliver cost and process improvements in the context of the current crisis." The company can be found online at http://www.bearingpoint.com.

Enterprise lending software vendor Mortgage Cadence Inc., Denver, has added Michael Hammond to its executive team as chief marketing officer.Mr. Hammond has nearly 15 years of experience in brand building, product launches, and developing marketing and sales strategies. Before joining Mortgage Cadence, he worked as vice president of business strategy for Martopia, a mortgage marketing and public relations firm. Mr. Hammond previously worked for nine years as director of sales and marketing for loan origination system vendor Dynatek. In addition, Mr. Hammond is one of only 50 individuals to earn the Certified Mortgage Technologist designation from the Mortgage Bankers Association. Mortgage Cadence can be found on the Web at http://www.mortgagecadence.com.

Financial Industry Computer Systems Inc., Dallas, has added a new mortgage insurance interface to its residential mortgage loan origination system, Loan Producer.The mortgage insurance interface enables lenders to quickly and easily submit data to receive mortgage insurance commitments and updates for primary insurance request, FICS said. The interface is designed to provide lenders using the Loan Producer system with a means to send mortgage insurance applications directly from Loan Producer to any MI provider that offers a Web service that complies with the Mortgage Insurance Application Request and Response requirements of the Mortgage Industry Standards and Maintenance Organization. Mortgage insurance providers will then automatically process the request and send status updates, along with the commitment and certificate of insurance, back to Loan Producer. FICS can be found on the Web at http://www.loanware.com.