Mortgage technology

Fannie Mae, Freddie Mac, and the Mortgage Bankers Association of America will guarantee up to $8 million in loans to the Mortgage Electronic Registration Systems Inc., a McLean, Va., enterprise that is cooperatively owned by member firms.MERS is trying to jump-start an electronic registry for tracking ownership of mortgage loans and servicing rights. The recapitalization plan, which also includes support from participating lenders, was necessary because MERS backers underestimated how long it would take the industry to implement the electronic registry.

Tuttle & Co., a risk management and software provider based in Mill Valley, Calif., has released a new version of its Loan Officer Plus, a point-of-sale origination softwareprogram for both prime and subprime single-family residential loans.Loan Officer Plus can connect to credit reporting agencies and automated underwriting systems, and is also available on compact disc. The software is a management system and a pre-underwriting system for a loan officer, and can be used to collect and send information to the loan processor electronically, eliminating double entry. The new features in version 4.2 include the guidelines for Fannie Mae and Freddie Mac 97% LTV loans. The program can also help banks fulfill Community Reinvestment Act requirements by allowing them to target lenders by borrower income or geographic location.

Fair, Isaac and Co. has created a special portfolio model to help lenders overcome the shortage of data available to create scoring models.The model is based on the experience of approximately 196,000 borrowers. The California-based company's special portfolio model "rank orders the likelihood of someone becoming a 'bad' payer based on experiences across the board from A loans to C+ loans, and includes high-LTV loans of over 100%," Sally Relova, Fair Isaac's project manager for analytic R&D, told MortgageWire. She said the special portfolio models are unique because they include a database of good and bad loans. Many lenders find it "very difficult to get enough bad loans," Ms. Relova said. "Most portfolios are pretty clean, so lenders cannot develop custom scorecards because their portfolios are too limited." Without a full range of loans, "you cannot create a good model," she said.

Fannie Mae and Finet Holdings Corp. have received the 1998 Computerworld Smithsonian Award in the finance, insurance, and real estate category for their efforts to develop mortgage-related Internet technology.Fannie Mae was recognized for creating its HomePath.com website and developing Desktop Underwriter, its automated underwriting system. Finet was cited for combining its iQualify.com website with Fannie Mae's DU and its Web technology to offer online access to mortgage information, multiple lenders, and loan approvals. Fannie Mae said Monument Mortgage, a Finet subsidiary, was the first of its approved lenders to integrate DU into its Internet channel to offer underwriting recommendations at the point of sale from its website, iQualify. The website is hyperlinked to Fannie Mae's HomePath.com, which is designed to enable consumers to determine whether they are ready for homeownership. Fannie Mae and Finet were nominated for the award by Sun Microsystems Inc. and Sybase Inc. The Computerworld Smithsonian Awards, founded in 1989, recognize leadership in the innovative use of information technology in a variety of fields.

The Mortgage Bankers Association of America and a group of 15 major mortgage industry firms have announced that they are creating an office to test the mortgage industry's readiness for the year 2000.The testing program will allow mortgage industry companies meeting certain eligibility requirements to test their systems for year-2000 readiness with their trading partners. The companies estimate that they will spend upwards of $500 million in the testing effort, said Joe McCartin, chairman of the MBA committee on the year-2000 issue and an official with G.E. Capital Mortgage Services. Startup costs for the program will be provided by the MBA, Fannie Mae, and Freddie Mac. The announcement was made at the MBA's Servicing Conference in San Francisco.

Wells Fargo online is now offering home equity credit decision-making in real time.Unlike some online or telephone services that take days to process a response, this new service will enable consumers to receive an answer within seconds of submitting a loan application, according to the San Francisco-based Wells Fargo. "People usually have big plans for their loan, such as education, home improvement, or debt consolidation," said Colin Walsh, vice president of U.S. Equity at Wells Fargo. "We want to help our customers reach their goals as quickly as possible."

A just-released collection module for Interlinq's MortgageWare Loan Servicing version 2.0 has been shown at the 12th annual MortgageWare Users' Group conference in Bellevue, Wash. The module enables lenders to track delinquent borrowers and bring servicing in-house at a per-loan annual cost of less than $4.The Kirkland, Wash.-based Interlinq has also developed an interface to Fannie Mae's MortgageLinks that will allow users to connect to their choice of credit bureaus, order credit reports, and autopopulate the liabilities into an application. Another Interlinq product, MortgageWare InvestorLinq, works with MortgageWare MarketLinq to help manage secondary marketing risk.