Technology

Suitability standards could open up lenders to a fair-housing can of worms, a compliance expert said Monday at the SourceMedia Fraud and Risk Conference in Las Vegas.According to Gary Lacefield, who spent a decade as a senior civil rights analyst and supervisor of lending investigations at the Department of Housing and Urban Development, lenders will "need to be very cautious" if legislators and regulators impose true suitability standards on the mortgage business. "If we do away with automated underwriting," he asked, "how are we going to protect ourselves from frivolous charges of discrimination?" Mr. Lacefield, who left HUD in 1999 after personally supervising or conducting more than 1,600 investigations, said automated underwriting was created in large measure in the mid-1990s to protect lenders from charges of bias. And it worked. Once computer systems started spitting out loan approvals based solely on lenders' underwriting criteria, without being touched by humans and their inherent biases, they all but wiped out fair-housing cases against lenders, he said. But if suitability standards are imposed as a response to abusive lending practices, Mr. Lacefield, who is now director of compliance at WR Starkey Mortgage, Plano, Texas, said automated underwriting would be little more than an exercise in futility. "If we take out the specificity provided by automated underwriting, we leave ourselves wide open to allegations of discriminatory behavior," he warned.

Motivity Solutions, a Denver-based mortgage technology provider, has announced the launch of LenderBuilt, a technology co-development venture designed to help mortgage bankers upgrade their technology platforms and business performance with limited investment of resources."We are seeking leading mortgage bankers to co-develop Movation [an enterprise lending system] in an actual production environment," said Todd Sherman, Motivity's president and chief operating officer. Tyler Sherman, Motivity's chief executive officer, said, "Lenders with a long-term vision realize that now is the time to step back and completely re-evaluate their technology needs, then map out a strategic vision for the future." Movation is being developed in phases, with each module available as a stand-alone product. More information on the co-development initiative can be found online at http://www.lenderbuilt.com.

Mt. Arlington, N.J.-based NYLX has launched NYLX Exchange, a real-time information source on aggregated loan origination activity in the United States.NYLX is a provider of point-of-sale product eligibility and loan pricing technology systems. The new tool provides market information resulting from billions of dollars worth of originations that pass through the NYLX system each day. Furthermore, the exchange offers an information source for lenders, investors, and originators along with competitive information on the products and investors that are generating activity. The company said NYLX Exchange gathers and evaluates NYLX members' aggregate activity, providing originators, lenders, and secondary-market professionals with easily accessed real-time insight into origination activity, including daily market activity, the most active investors, the most active loan products, competitive intelligence, and specific investor information. Users can even find out critical competitive information on how other companies and mortgage products are trading. The company can be found on the Web at http://www.nylx.com.

Renan Levy has been named president and chief operating officer of Intellidyn Corp., a Boston-based provider of direct response marketing and multichannel database marketing systems.Intellidyn said Mr. Levy worked most recently with n2N Commerce developing advanced electronic commerce systems for large e-retailers including The Limited. He was previously a partner at Halo Group International, and COO and chief executive officer of KaBloom. Intellidyn CEO Peter Harvey touted Mr. Levy's "strong background in business analytics and intelligence practices, and vast experience within the retail, e-commerce, online services, and multichannel contact center industries." The company can be found on the Web at http://www.intellidyn.com.

NYLX, a Mt. Arlington, N.J.-based provider of mortgage technology, has announced the launch of LoanBook, which it calls the industry's first pricing engine specifically designed to help lenders achieve the highest profits on each loan they sell to secondary-market investors.LoanBook continually monitors loans in process, compares them against available loan programs, and automatically alerts the secondary manager of pricing improvements, the company said. "LoanBook is the first pricing engine that leads secondary managers to revenue that would otherwise be left on the table," said John Alexander, president of NYLX. "Lenders get higher profits without adding more volume, more staff, or increasing costs to the borrower." A Web-based subscription service, LoanBook searches its preloaded database of approved investor programs, locates the program with the optimal yield based on each loan's unique criteria, and notifies the secondary manager when loans reach a specific profit threshold based on dollar revenue or yield spread, the company said. NYLX can be found online at http://www.nylx.com.

Citing the subprime mortgage crisis, MortgageBrokers.com Holdings Inc., Toronto, has announced the suspension of plans to enter the U.S. mortgage market.The company said it would suspend the plans "until such time as the full economic effect of the current market turmoil is known." MortgageBrokers.com said the U.S. downturn will prevent it from reaching previous revenue projections for this year, and that the fallout from the crisis has affected the performance of its Canadian operations. The company reported that it had increased its national sales force of mortgage agents from 247 to 307 in the third quarter, but that the ramp-up of newly recruited agents "has been slower than expected." The mortgage brand and technology firm can be found online at http://www.mortgagebrokers.com.

ISGN Technologies Ltd., has acquired Inuva, an India-based provider of information processing, business process outsourcing, and application software consulting.ISGN, a provider of end-to-end technology systems and services to the mortgage industry, is part of the K.K. Birla Group, an Indian industrial group. The acquisition adds mortgage-specific knowledge process outsourcing capabilities and further supports ISGN's strategy of providing a full line of services and solutions for the U.S. mortgage industry. Based in Kolkata, India, Inuva offers KPO services such as loan production and post-closing, title closing and settlement, mortgage servicing, and secondary-market services. With more than 300 mortgage industry professionals, Inuva uses a hybrid onsite-offshore model with delivery centers in Bangalore, Delhi, and Miami, Fla. The companies can be found on the Web at http://www.isgn.com and http://www.inuva.com.

Fast Home Auction, Tampa, Fla., has launched an auction website that enables real estate professionals to buy and sell defaulted and foreclosed properties across the country "with the ease of the familiar online merchandise auction concept."Fast Home Auction president James Case said asset managers of real estate owned have traditionally posted properties on their own websites, but most people don't know how to find them. "Online auctions present an efficient mechanism for buyers to acquire foreclosed property from the REO asset managers," Mr. Case said. FastHomeAuction.com uses e-mail notification to allow potential bidders to receive notices of forthcoming auctions in areas they specify. "The site makes it easy to list and bid on properties for sale using the online format we've become so familiar with over the years," Mr. Case said. The auction website can be found at http://www.fasthomeauction.com.

Citadel Investment Group -- which recently bought subprime lender ResMae -- has agreed to pump $2.5 billion in cash into E*Trade Financial, a company that has been struggling under the weight of huge mortgage writedowns.The New York-based E*Trade revealed the cash infusion plan Thursday morning, noting that its chief executive officer, Mitchell Caplan, had resigned from the company. A few weeks ago E*Trade's share price crumbled after a stock analyst said there was a 15% chance the online financial services firm would go bankrupt. (E*Trade denied the claim.) E*Trade, which has $12.8 billion in mortgage-backed bonds on its balance sheet, lost $58 million in the third quarter. The company can be found online at http://www.investor.etrade.com.

Responding to the "swift shift in investor appetites for conforming and government loans," Loan-Score Decisioning Systems LLC, Irvine, Calif., has announced the integration of its automated underwriting platform with Fannie Mae's Desktop Underwriter.The company said the integration offers instant and accurate determination of "product eligibility, pricing, and complex underwriting for all types of loan products." Particularly noteworthy, the company said, is that the DU integration also allows lenders to access the Federal Housing Administration's AU system, TOTAL Mortgage Scorecard for the underwriting of FHA loans. Because Loan-Score's AUS retrieves and stores the actual DU findings data, along with the unique Fannie Mae Casefile ID, Loan-Score said its clients are enabled to sell to Fannie Mae-approved seller-servicers. The system is offered as a stand-alone platform or as components. Loan-Score can be found online at http://www.loan-score.com.