Technology

A Senate appropriations subcommittee has approved new funding for the Federal Housing Administration to hire additional staff and update its aging information systems as part of the Department of Housing and Urban Development budget for fiscal year 2010. "It provides funds to start modernizing its technology systems in order to track its mortgages and obligations, which — I regret to tell you — it cannot do right now," said Sen. Christopher Bond, R-Mo. Sen. Bond also expressed concerns about the rapid growth of the FHA program and the lack of staff and expertise to manage the FHA single-family program effectively. "It may be at the edge of a meltdown," he warned. Sen. Richard Shelby, R-Ala., expressed similar concerns. "If we don't watch out we could have another Fannie Mae or Freddie Mac," Sen. Shelby said at a subcommittee markup of the HUD appropriations bill.

A private equity investment appears to have saved and maintained the ongoing operation of loan origination system provider MortgageDashboard, which last week said it had lost its funding and was planning to shut down. On its website, the company said, "MortgageDashboard has been purchased by a private equity group and will continue to operate with no interruption to service." Specifically, Catalizador Private Equity Group has acquired a majority interest in MortgageDashboard. The deal consists of a buyout of both major shareholders and a private equity group. MortgageDashboard's new funding will be used to fuel a new leadership team, finalize development on MortgageDashboard's new mortgage banking software solution and to sustain daily operations for its client base.

MortgageDashboard, an Austin, Texas-based loan origination software firm, lost funding unexpectedly and is out of business. The company's head of marketing confirmed the company was forced to close its doors yesterday. One Maryland lender told National Mortgage News that he received an e-mail from the company saying it would be closing. "They gave us seven days to get our files in order," he said. "It's too bad. It's a wonderful program." Since 2001 MortgageDashboard's claim to fame was that it operated a Web-based on-demand system that allowed users to pay as they go. Jordan Brown, president of MarketWise Advisors, a mergers and acquisition consulting firm, said he is not surprised by the development. "I've looked at least 30 loan origination systems [firms] looking for a buyer. It's a tough market for an LOS. I suspect more will go out of business going forward." Mr. Brown predicted that the more prominent LOS firms will find refuge and eventually be bought.

Fiserv Inc. is updating its Loan Servicing Platform to make it more fully compatible with recent guidelines from the U.S. Treasury Department on home loan modifications. "From its inception the Fiserv platform was the first loan servicing system that was fully capable of supporting the Making Home Affordable modification program," the company said. But now, "in addition, several enhancements are underway, including additional deferred principal functionality, enhanced ability to gather personal financial information, and an [Home Affordable Modification Program]-specific screen to present a full picture of the modified loan," Fiserv said Wednesday. The Fiserv platform offers integrated default management tools that allow servicers to track and study loans being modified with the aim of helping servicers formulate best-option workout scenarios based on operational business rules while meeting HAMP guidelines.

First American Corp.'s proposed acquisition of the minority stake outstanding of First Advantage Corp. will simplify the legal and organizational structure of the two companies and aid in the proposed split of the former's financial services and information solutions businesses, according to a report from Fitch Ratings. Santa Ana, Calif.-based FAF, which already controls 74% of the equity in First Advantage, has made an offer to purchase the remaining 26% at $14.04 per share. In late morning trading on June 29, the Poway, Calif.-based provider of risk mitigation and business solutions was trading at $14.85 per share, after going above the $15 mark at one point. It was back in January 2008 that FAF first announced the split, similar to one already accomplished by rival Fidelity National Financial. However in July 2008, it put the split on hold, blaming market conditions. In a statement, Parker S. Kennedy, FAF chairman and chief executive indicated that the company was still committed to the split plan, saying "we believe this transaction will boost the financial strength of First American as we continue to prepare for the separation of our information solutions and financial services businesses." In its report, Fitch said the information solutions business has been a "shock absorber" for FAF during the real estate downturn, but took no ratings actions on the title company. It views the transaction as ratings neutral because it is an all-stock deal.

Irvine, Calif.-based Loan-Score Decisioning Systems has completed the necessary integration for lenders to connect to the Federal Housing Administration's TOTAL Scorecard platform directly from its automated underwriting system. Specifically, lenders that are using Loan-Score's product and pricing engine and AUS are able to able to instantly return decisions to loan officers or brokers electronically with this integration. In order to attain results from TOTAL Scorecard, lenders must use an AUS to connect to the system. Because Loan-Score is now an FHA integrated AUS, their clients' end users are able to hit TOTAL Scorecard for instant decisioning.

A Fitch Solutions/Portsmouth Financial Systems desktop application that offers loan-level analytics for the U.S. structured finance market will start with a focus on subprime, alternative-A and prime credit residential mortgage-backed securities. Michael Megliola, chief executive officer of Portsmouth Financial Systems, Portsmouth, N.H., said the application differs from others offered in the market because it offers "more granular structured finance analytics at the loan, bond and deal level." Users can define the parameters for the analytics in the application, which is called Deal View. These can include, for example, a comparison of prepayment and default rates for arbitrary loan pools, or interactive yield tables on a collection of loans, the companies said. They plan to add more asset classes to the application going forward.

The Federal Reserve Bank of New York has chosen commercial real estate information and technology provider Trepp LLC as collateral monitor for commercial mortgage-backed securities as part of the Term Asset-Backed Securities Lending Facility. TALF's monthly subscription window for new issue CMBS was set to open for the first time Tuesday afternoon. At press time midday Tuesday Trepp senior vice president Andy Liebman and Tom Sink said to their knowledge there was nothing pending for it, but they were already at work on aspects of the program that are being finalized, and said next month they anticipate the program will be underway for both new issue and legacy CMBS. Trepp said in its role as monitor it would assist the New York Fed in providing valuation, modeling, analytics and reporting as well as advise on matters involving newly issued and "legacy" CMBS in the program. The New York-based company said it would not establish policies or make decisions for the New York Fed, including decisions on whether to reject a CMBS as collateral for a TALF loan or exclude loans from mortgage pools. Trepp said it would use the analytics and forecasting services of its subcontractor and sister company, the Boston-based Property and Portfolio Research, in conjunction with its work as a TALF CMBS collateral monitor.

Southern California-based REOTrans has launched the RT Certified Agent Program, an online training regimen that educates agents in the REO-sales process. REOTrans has been providing basic training on the use of the workstation free of charge at various industry meetings, but the sessions were constantly overbooked, so the company decided to create an online series of courses. The company offers three levels of certification.

LendingSpace, the developer of web-based loan origination software for reverse and forward mortgages, has named Jeffrey Osheka president. Mr. Osheka has over 20 years in the industry working for companies such as Lydian, Decade Systems, Ultraprise/GHR and Fidelity Mortgage Funding. As president of LendingSpace, Mr. Osheka is responsible for directing the company's current growth, with an emphasis on the rapidly expanding reverse mortgage market.