Technology

While it has always been difficult to get a handle on the size of the mortgage fraud problem, a new report by a leading provider of fraud detection products indicates that the incidence of the crime may be much greater than anyone thinks. Analysts at Interthinx, Agoura Hills, Calif., say they found more than 42,000 mortgage applications in the second half of last year that contained significant misrepresentations of the borrowers' incomes. In total, the loans were worth nearly $11 billion. "I have no idea how many of the loans were funded, but I hope none of them," Ann Fulmer, the company's vice president of industry relations, said at the Mortgage Bankers Association's National Fraud Issues Conference in Chicago, where the six-month analysis was released. The questionable loans were discovered by Interthinx' income alert program, which warns clients that a borrower has submitted multiple loan applications and his income has jumped by at least 15% over a prescribed period. "Fraud is like water -- it always seeks the lowest level," Ms. Fulmer said. "That's why it is finding ways around the barriers lenders set up to uncover them." The company can be found on the Web at http://www.interthinx.com.

After 20 years with what is now Wolters Kluwer Financial Services, Roger Gudobba has joined Compliance Systems Inc., Grand Rapids, Mich., as the company's chief strategy officer. Mr. Gudobba was most recently a senior principal with Wolters Kluwer, where he was instrumental in developing and maintaining business relationships. In addition, he was a key contributor to the success of VMP Mortgage Forms, now part of Wolters Kluwer Financial. In 2004, Mr. Gudobba was the recipient of Mortgage Technology magazine's Steve Fraser Award. Compliance Systems, an automated document compliance provider, can be found on the Web at http://www.comliancesystems.com.

First American Credco, a Poway, Calif.-based provider of specialty credit reports to the mortgage and consumer finance industries, has launched Connect Web services technology to enable smoother integrations. Connect provides a secure electronic interface to a wide range of new products available from First American Credco, including identity validation, compliance, and consumer credit solutions. One of the most notable additions available on the Connect interface is the electronic automation of Anthem, First American Credco¹s nontraditional mortgage credit report and scoring system for loan applicants having little or no traditional credit history. The company, which is part of First Advantage Corp., can be found on the Web at http://www.facredco.com.

InsideValuation, a real estate valuation company based in Reno, Nev., has announced a partnership with International Financing Engineering Group, Rockville, Md., that has created a ZIP code-level mortgage default projection. The two companies offer combined access to millions of recent loan histories and "a large quantity" of subprime loan default information, according to InsideValuation. "This product presently allows mortgage risk managers to determine the relative safety of loans based on econometric and demographic variables relating to property location, such as median home price, median household income, affordability, unemployment, and rent-versus-price ratios," the company said. InsideValuation can be found online at http://www.insidevaluation.com.

BMC Software Investments Inc., an investment firm based in Hot Springs, Ark., has announced the acquisition of Loan-Score Decisioning Systems LLC, an Irvine, Calif.-based provider of automated underwriting systems. The terms of the deal were not disclosed. Loan-Score's products include an enterprise-class AU system, a product/pricing engine, a PDA-based pre-qual application, a bulk pricing application, and point-of-sale Web portals for all lending channels and product types, BMC said. The company said it plans to develop new offerings, expand Loan-Score's infrastructure, and hire additional development staff. "What has happened to the mortgage industry over the past year is unprecedented," said William McCord, chief executive officer of BMC Software Investments and chairman of Loan-Score. "Several AUS vendors have already closed their doors and a number of others are in trouble, which creates an opportunity for Loan-Score to dominate the AU space given the right investment partner." Loan-Score can be found online at http://www.loan-score.com.

TSS Software Corp., a software provider to the settlement services industry, has announced enhancements to its flagship product, TitleExpress. Among the enhancements are integrations with Calyx's Point loan origination system, reporting for United General Title Insurance Co., and the addition of iOrderOpen. TSS said the enhancements were all driven by customer requests. Versions 6.0 and higher of Calyx Software's Point will allow mortgage brokers to export data directly from Calyx to title companies using TitleExpress and iOrderExpress as the connection engines, TSS said. The addition of the iOrderOpen interface facilitates the automated submittal of orders and the conversion of external data sources into TitleExpress. TSS can be found online at http://www.iwanttss.com, and Calyx can be found at http://www.calyxsoftware.com.

ICBA Mortgage, the mortgage corporation of the Independent Community Bankers of America, and its partner Taylor, Bean Whitaker Mortgage Corp. have unveiled their newest product offering for community banks: Complete Mortgage Solutions. CMS gives ICBA member banks access to "consultative services that deliver a comprehensive blueprint for mortgage success -- from operational workflow, staffing, and training to technology, marketing, and mortgage products," said Terry Jorde, chairman of ICBA Mortgage and president and chief executive of CountryBank USA, Cando, N.D. Steve Reukhaus, CMS project manager at Taylor Bean, said the new product "can help community bankers streamline their mortgage operations, improve efficiencies, and explore new possibilities for growth and profitability." ICBA Mortgage can be found online at http://www.icbamortgage.com, and Taylor Bean can be found at http://www.taylorbean.com.

REO Sentinel, Jacksonville, Fla., has announced the introduction of a technology that offers "an inexpensive but high-value solution" to the problem of monitoring and maintaining presale and real-estate-owned properties. Rich Rollins, chief executive officer of the company, said the device, also called REO Sentinel, was developed in conjunction with loan servicers and a property inspection and preservation company. "For the first time, lenders and their property preservation managers can have real-time views into what is occurring in every defaulted property they are trying to market thanks to a small, patented device installed in each house," Mr. Rollins said. ".... [REO Sentinel] can detect many types of gases, the presence of smoke and high humidity conditions, and even takes a photo of anyone entering the property." The company can be found online at http://www.reosentinel.com.

First Florida Financial Group LLC, Fort Myers, Fla., has launched a program under CashToolBox.com aimed at helping builders and Realtors sell more properties by enabling borrowers to get a mortgage approval through the use of equity in their owned properties, or a relative's. Eddie Hoskins, president and chief executive officer of First Florida, said CashToolBox.com lends 125% LTV Pre-Closing Cash against a property's equity by using Mortgage Approval Tools such as the Credit Score Optimizer, Down Payment Assistance Gifter, Cash Reserves Booster, and Debt-to-Income Reducer. "When they generate needed cash and apply their 'tools' to un-approvable mortgage loan applications, in many cases they're able to get a loan approval and closing that had seemed impossible," Mr. Hoskins said. The company can be found online at http://www.cashtoolbox.com.

Home values continued to decline in the fourth quarter, falling 3.5% on a quarterly basis and 3.0% on a year-over-year basis, according to Zillow.com, an online real estate community based in Seattle. Zillow's quarterly home value report, which has been expanded to cover 125 metropolitan areas, found that home values stood at a Zindex home value indicator of $224,890, representing the median estimated valuation of all homes in an area. "With consecutive declines over the past five quarters, we haven't seen the housing market bottom yet, and it may very well get worse before things get better," said Stan Humphries, Zillow's vice president of data and analytics. "Even many markets that have been largely insulated from recent declines, like some in the Pacific Northwest, reported notable value declines in the fourth quarter." Zillow can be found online at http://www.zillow.com.