Technology

Losses from mortgage fraud will reach $2.5 billion in 2008 and comparable losses will continue for several years thereafter, according to new research from TowerGroup, Needham, Mass. The report says the substantial rise in mortgage fraud over the past 10 years is an important factor in mortgage credit woes, though falling home prices and poor mortgage underwriting have been given most of the blame in recent months. TowerGroup anticipates that lenders will respond by deploying technology to assist in the detection and prevention of mortgage fraud and that their annual spending on such tools will reach several hundred million dollars in the next few years. The research and advisory company can be found on the Web at http://www.towergroup.com.

First American eAppraiseIT, Poway, Calif., has announced the introduction of a valuation tool that it says offers quick, low-cost, accurate values for credit decisions, loss mitigation, portfolio analysis, and quality assurance. The standard Data Assist report verifies a property's legal address and ownership and includes three closed-sale comparables from the subject property's market area, the company said. Data Assist with Listings offers the same information, plus three current listings that are similar to the subject property. "Many lenders are now looking for more alternatives [to automated valuation models]," said Michael Fosser, senior vice president of business development for eAppraiseIT. "Data Assist can provide a high level of confidence without adding significant cost or delay to these transactions." The company can be found online at http://www.eappraiseit.com.

Interthinx Inc., Agoura Hills, Calif., has expanded its PredProtect product to allow for loan-level regulatory compliance in order to respond to regional differences in limits for "mini-jumbo" conforming loans. The tool handles loans between $417,000 and $729,000 in California, Colorado, Hawaii, Maryland, New Jersey, New York, Virginia, and Washington, D.C., without waiting for system enhancements or upgrades, the company said. "The new 'mini-jumbo category was introduced to allow consumers to qualify for loans that could be purchased by Fannie Mae and Freddie Mac," said Roger Fendelman, vice president of compliance for Interthinx. "However, since the limits can vary by county or metropolitan statistical abstract, lenders have been faced with challenges to make sure that this new class of loans complies with the maze of existing federal, state, and local consumer protection laws, including anti-predatory-lending laws." Interthinx can be found on the Web at http://www.interthinx.com.

Compliance Coach Inc., San Diego, has launched Web-based software that enables compliance with a federal regulation that imposes new responsibilities on businesses to prevent consumer identity theft. The new FACT Act Identity Theft Red Flags Rule requires affected entities to perform a risk assessment and take steps to implement a written Identity Theft Prevention Program by Nov. 1, 2008. Failure to comply can lead to a civil money penalty for each violation, regulatory enforcement action, or private plaintiff lawsuits. Companies are required, among other things, to identify all accounts covered by the rule; perform a risk assessment of each covered account; identify "red flags" that may indicate identity theft; develop a written program; provide training to appropriate employees; and provide a compliance status report at least annually. CompliancePal walks the user through a series of questions to help users meet the requirements. The company can be found on the Web at http://www.compliancecoach.com.

Ellie Mae is bringing together electronic document management and online retail lending with its new CenterWise offering. CenterWise provides unlimited electronic document management, including all state and local disclosures, delivery and archiving, along with a scalable WebCenter website and secure online business center that enables greater e-collaboration. The goal is to allow users to extend their enterprise software to their business partners, prospects and customers in real-time over the Web, said Dublin, Calif.-based Ellie Mae at the MBA Tech Show.

Wolters Kluwer Financial Services has sought to make the closing process for first mortgage and home equity faster with its new Simplified Mortgage tool, which reduces the recordable mortgage document into two smaller, easier to understand pieces. At the MBA Tech Show WKFS pointed out that this application reduces the recordable instrument into a two- to three-page document that contains all information required to create a valid lien and fully compliant recording document based on each state's requirements. The second piece is a non-recordable supplement that outlines a loan's standard covenants between the lender and the borrower. This tool allows for a simpler closing in which less paper is required and a portion of the recordable instrument can be presented to the borrower online before the actual closing for e-signing.

At the MBA Tech Show, Fannie Mae has contributed a new patent to MISMO under the MISMO Intellectual Rights Policy so that it may be used by the industry on a royalty-free basis. The SMART Doc specification was originally licensed to MISMO in 2002 by Fannie Mae. This new patent defines processes for validating the view and data sections of a SMART Doc with automated systems. The process enables true "lights-out" post closing and certification.

Newport Beach, Calif.-based DRI Management Systems has planned to launch RINCON, a Web-enabled default management application. At the MBA Tech Show DRI talked about how RINCON helps servicers better manage defaults by using Web services to offer easy deployment, a more robust workflow, letters, forms and spreadsheets embedded in the workflow, automated connection between third parties, an exception-based setup to allow for a more automated process and an upgraded loss mitigation decisioning model. This Web-enabled version of the company's The Default Solution product will be available in early 2009.

Lydian has integrated with NYLX to help lenders increase overall loan quality. The partnership connects Lydian Data Services and Lydian Technology Group's clients with NYLX's point-of-sale technology, equipping clients with a front-end solution that offers real-time pricing and product selection, as well as customer-facing Web portals. On the other end, NYLX customers now connect to Lydian's Mortgage Connectivity Hub to seamlessly connect to lending platforms, package loans for processing or delivery to a wholesaler, and leverage Lydian's BPO capabilities. The partnership also offers a two-way data exchange to allow for more efficient integration and e-collaboration. The deal was forged at the MBA Technology Show.

Rapid Reporting's DirectCheck product will be providing instant verification of Social Security numbers direct from the Social Security Administration for the first time in the mortgage industry. By adding immediate Social Security number verification to the other real-time components of DirectCheck, the industry now has a stronger, better way to reduce fraud at origination, noted Rapid Reporting at the MBA Technology Show in Dallas. The application's users get instant delivery by just entering the borrower's name, Social Security number and date of birth. This coincides with the SSA's new real-time program to begin in October that will allow for the seamless transfer of data back via an XML Web service interface.