Technology

VantageScore, the credit scoring algorithm developed by the three major credit repositories, has been integrated in Standard & Poor's Rating Services' Levels 6.6 mortgage analytical model. Levels analyzes a loan, or a pool of loans, and assigns a risk grade; it also determines foreclosure frequency, loss severity and credit enhancements required for securitization. A spokesman for VantageScore Solutions, the Stamford, Conn.-based company that holds the intellectual property rights to the algorithm, said that with S&P's approval, mortgage loans that were scored using VantageScore can now be included in pools analyzed by Levels. S&P managing director David Goldstein said VantageScore would provide banks greater flexibility by allowing Levels to be used as a risk management tool to monitor their mortgage loan portfolio. Previously, Fitch Ratings incorporated VantageScore into ResiLogic 2.1, its quantitative model that provides credit risk analysis at the individual loan and pool level for residential mortgage loans.

Retreat Capital Management, Inc., a third-party arbitration services company in Lake Forest, Calif., is collaborating with Ellie Mae to make its mortgage loan modification services available to more than 120,000 mortgage professionals using the Encompass Mortgage Management Solution. Users may either directly upload borrower information through their Encompass systems, or fax the information to RCM. Retreat Capital uses an advanced rules-based loss mitigation technology platform that interfaces with the lender's servicing system. Once a mortgage is submitted, the technology matches that loan against all available loss mitigation options to determine the most suitable solution. At that point, one of the company's negotiation specialists contacts the borrower to present the available options. Once a resolution is reached, Retreat Capital handles all of the required paperwork and closing activities. "In this market, lenders are in dire need of loss mitigation and foreclosure prevention services, but unfortunately, there's such an influx of activity that they don't always have the time to develop a workable solution on their own," said Arvin Wijay, CEO of Retreat Capital Management.

To improve visibility into the hidden risk of many of the mortgage assets currently plaguing the financial system and capital markets, TransUnion has developed a new solution called TransUnion Consumer Risk Indicators. This solution, developed in cooperation with First American CoreLogic, a member of The First American Corporation family of companies, makes available previously missing information for mortgage secondary market risk analysis and modeling. The TransUnion Consumer Risk Indicators for RMBS (residential mortgage-backed securities) and whole loans bring current and historical loan-level consumer credit information to the mortgage industry for risk analysis. This includes hard-to-find information such as complete adjustable-rate mortgage exposure (beyond the loan in question) and the consumer's capacity to pay. This data is already proven to predict risk and consumer behavior for numerous lending products such as mortgages, auto loans and credit cards, but has previously been unavailable for mortgage-backed securities. The TransUnion Consumer Risk Indicators for RMBS incorporate proprietary matching algorithms jointly developed between First American CoreLogic and TransUnion. These algorithms link individual loans within non-agency mortgage-backed securities to the consumer credit information of the specific borrowers of those loans.

At a time when loan servicers are being inundated with questions on borrower loan status, loan modifications and other customer service issues, ISGN Corp., a global mortgage solutions company, has released its Customer Service Portal System that provides borrowers, lenders, investors and attorneys with self-service 24/7 access to active and inactive loan data. The portal includes data such as tax and insurance information, escrow analyses and year-end, current and historical loan data, regardless of the servicing system used. The Customer Service Portal can integrate into any loan servicing system platform, and can be private labeled for any lender or servicer. The system utilizes secure Internet technology to ensure data safety and confidentiality, and automatically collects and displays updates of borrower information, directly from the company's servicing application.

The key to successful loan modifications is a more robust data exchange and feedback between all parties involved before and after the modification, the president of Consumer Credit Counseling Service of Atlanta said during a foreclosure panel at the SourceMedia Mortgage Servicing Conference in Dallas. Suzanne Boas sees a developing trend in the fact that more and more servicers are now interested in consistent data feedback between counseling agencies and servicers, a step that helps loss mitigators ensure data transparency for all parties including investors. "We need more information on how the loan is performing after the modification," she said, adding industry interest to that end is growing. A more robust data exchange between foreclosure counselors like CCCS who are directly involved in achieving a loan modification agreement and servicers has proven to benefit borrowers as much as servicer efficiency in loss mitigation, she said. Following that path CCCS is expanding its Early Resolution Counseling Portal platform it has pilot tested in partnership with Bank of America and Wells Fargo. Another eight counseling agencies are joining CCCS into the program, which helps reduce processing and approval time for workouts on BoA and Wells Fargo loans. After counseling is completed the portal (created by Computer Sciences Corp.) analyzes the data servicers have included in the portal's database for counselor's review. It screens specific lender and investor requirements, so by the time a counseling session ends the borrower is presented with accurate workout options. If an agreement is reached it is immediately sent to the servicer for a quick decision.

LenderLive Network Inc., a Denver-based company that provides business process outsourcing and technology, said it has launched the first large-scale Home Affordable Modification Program campaign with one of the nation's top four servicers. It did not identify the servicer it was working with. HMP is part of the recently passed Making Home Affordable program, which will allow up to nine million Americans to refinance or modify their home loans. With this campaign, LenderLive plans to manage all of the inbound and outgoing documents required under HMP, including certain fulfillment processes. "At launch, we anticipate processing nearly 2,000 transactions per day," said Rick Seehausen, chief executive of LenderLive Network. The company has another five servicers in the queue for which they are preparing to initiate services.

Fannie Mae said its refinancing volume totaled $77 billion in March, up from $41 billion in the previous month, as borrowers took advantage of lower mortgage rates and a new flexible refinancing program. The mortgage giant it has not seen this level of activity since refinancing boom of 2003. "We anticipate that volumes will increase even more as millions of additional homeowners become eligible to refinance" under the Home Affordable Refinance initiative, according to Fannie executive vice president Tom Lund. Under that initiative, Fannie and Freddie Mac are expected to use flexible underwriting to refinance mortgages they already own or guarantee. Borrowers with loan-to-value ratios between 80% and 105% can refinance at current market rates under this initiative. Mortgage insurance requirements have been waived on those refinancing transactions. Existing insurance policies will be transferred to the new loan, however. Lenders and brokers can use Fannie's Desktop Underwriter to process those refinancing applications.

RealtyTrac, Irvine, Calif., is launching a new service called RealtyTrac Renter Alert, which gives tenants advance notice when the property they are renting enters into default or is about to be foreclosed by a lender.Over 30% of homes where the mortgagor has defaulted or the property has gone into foreclosure are not owned by the occupant. Thus, hundreds of thousands of renters are at risk of being evicted, even though many have never missed a rent payment. The new monitoring service sends e-mail alerts to subscribers warning them immediately of any foreclosure activity on a specific property.

Docu Prep Inc. and Xerox Mortgage Services have integrated their joint services to enable lenders to incrementally implement full electronic processes. Docu Prep's EESS (short for Entire Electronic Signature Solution) provides e-disclosure, e-signature, e-modifications, e-closing, and e-vault services. This technology combines with the BlitzDocs collaborative network allowing lenders to enter the electronic world where they want to and gradually expand out to doing full e-closings. The service can be used for something as simple as allowing the borrower to e-sign a disclosure or it can allow the lender to open the electronic signing room as 'view only' to closing agents or attorneys, and makes a seamless transfer to the e-vaulting services, including MERS.

Integrated Asset Services LLC, a Denver-based default management and residential collateral valuation services provider, has rolled out a new product, called the "Conditioned Valuation Model." The company describes a CVM as a cost-effective tool that allows the integration of automated property analytics with human observation, adding that it falls out on the continuum between an automated valuation model and a broker price opinion. A CVM delivers a real-time, 360-degree view of the condition of the property, the neighborhood, the condition-adjusted value and market price trends. "Traditionally, the industry has had the choice of a more expensive human-based solution or faster and riskier automated solutions. But the current mortgage industry requires these two valuation approaches interact intelligently and at the right price point," said Dave McCarthy, chief executive of IAS. A CVM costs half the price of a standard BPO. The executive said CVM was designed to help avoid AVM failure to disclose supporting data and valuation methodologies that result in questionable property valuations. The CVM uses a valuation formula that integrates property data from IntelliReal, IAS' technology partner, to provide real estate intelligence, analysis, current neighborhood sales data and active listings. The data is then combined with a hands-on inspection performed by a third-party property inspection firm, including photos on the subject property and its neighborhood condition, occupancy status, and conditions that impact value.