Technology

Freddie Mac has made a $100,000 commitment to the Mortgage Bankers Association's Year 2000 testing plan, the MBA has announced.The MBA Year 2000 Inter-System Readiness Test Plan is a multimillion-dollar voluntary program under which firms will test their systems with those of trading partners in a Year 2000 business environment. "At Freddie Mac, we've made Year 2000 readiness our top corporate priority," said James Cotton, Freddie Mac's vice president of Year 2000 Primary Markets. "We believe that the MBA Inter-System Readiness Test is an important and necessary step toward ensuring readiness for us and the mortgage finance industry." The plan, developed by the MBA Year 2000 Inter-Industry Test Subgroup, has also received $100,000 commitments from Alltel, Fannie Mae, and First American Real Estate Services. It will include test transactions relating to 15 critical business functions in origination, secondary marketing, and servicing, the MBA said. The test is scheduled to begin early next year.

Wells Fargo and BankAmerica are now offering borrowers Internet access to home equity loans.So far Wells Fargo has approved 1,600 applicants, totaling $10 million. Eventually, the San Francisco-based banks are expected to expand the service to mortgages, credit cards, and other loans. Wells Fargo reports that 28% of its home equity loans made through the Internet were to non-bank customers, compared with 20% through the bank's branches. "Customers don't care if they have an existing relationship as long as the bank is willing to lend them money," says Karen Shapiro, senior vice president and online channel manager at BankAmerica. Wells Fargo's website address is http://wellsfargo.com/home, and BankAmerica's is http://www.bofa.com.

GE Capital Mortgage Insurance Company, Raleigh N.C., announces several Internet applications designed for its lender and servicer customers.GE Mortgage Insurance Connect (www.gemiconnect.com) provides its Excel lenders with the ability to receive new commitments in a paperless environment. GE Mortgage Insurance Connest's Certiprint feature allows lenders and servicers to print mortgage insurance certificates or commitments for new and existing loans. The company reports that is processes 1,000 transactions per day on Certilink, including servicing transfers, claims, loan status reporting, account maintenance and billing. Certilink is used by more than 200 servicers.

James Noack, president of Monument Mortgage, a Finet company based in Walnut Creek, Calif., has resigned from his post but will remain a consultant to the company.The company said Mr. Noack plans to concentrate on unspecified entrepreneurial opportunities. Mr. Noack was instrumental in the development of Iqualify, an Internet site that offers borrowers the chance to receive an automated underwriting decision.

HomeShark Inc., a San Francisco-based online discount mortgage broker and national home listings service, will close its third round of financing next week, MortgageWire has learned.The $20 million round will be co-led by industry leaders Weiss, Peck & Greer Venture Partners and Hyperion Partners. HomeShark's website address is http://www.homeshark.com.

The announcement of management changes at LendingTree, the Internet lender based in Charlotte, N.C., has fueled rumors that the company is positioning itself for a possible IPO.LendingTree's chief executive officer, Doug Lebda, told MortgageWire that the company faces no funding problems, but he termed all financial options "viable" and did not quibble with rumors that a funding deal could come as early as the next 12-18 months. Mitchell York has been named president of LendingTree and Gene Lockhart, a former CEO of Mastercard International, has joined LendingTree's board of directors. Mr. York will be responsible for LendingTree's day-to-day operations. Prior to joining LendingTree, Mr. York was a vice president at CMP Media Inc., a technology publisher and media company. Mr. Lebda, who founded LendingTree, assumed the CEO post in connection with the other management changes. He said he will now focus on the strategic growth of the company, including increasing the number of lenders that list their products on the site. LendingTree's website address is http://www.lendingtree.com.

Online mortgage broker E-Loan, Palo Alto, Calif., has been selected by Bank Rate Monitor to provide additional mortgage qualification services to its website.The co-branded mortgage center will offer consumers access to a larger number of national and regional lenders, E-Loan said. By linking to the center from Bank Rate Monitor's home page (http://www.bankrate.com), consumers can access E-Loan's personalized features to help them decide on the best mortgage financing option and then complete the entire loan transaction online, E-Loan said. E-Loan's website address is http://www.eloan.com.

E-Loan, NetNoir--The Black Network, and the Los Angeles Urban League have announced a pilot program aimed at promoting home ownership and computer access among African Americans in Los Angeles.The program, Black Homes Online, will help people take advantage of Community Reinvestment Act mortgage loans. E-Loan, an online mortgage broker, has set up a CRA mortgage center at the pilot's website (http://www.blackhomes.com). People who apply for and obtain a CRA loan through the site will receive a free IBM computer and free Internet access for a year through NetNoir. Those who do not have access to a computer can take advantage of the program by using any one of three centers provided by the Los Angeles Urban League for program applicants. E-Loan's website address is http://www.eloan.com.

Alltel has donated $100,000 to the Mortgage Bankers Association of America's year-2000 readiness testing program.The contribution by the Jacksonville, Fla.-based software company will sponsor a portion of the MBA's Y2K testing that will facilitate coordination among third parties. "Coordinating the Y2K industry test is the best way to leverage resources and help protect our industry," said MBA executive vice president Paul Reid in lauding Alltel's commitment. The MBA's Year 2000 Industry-Wide Readiness Testing grew out of a subgroup of its Year 2000 Technology Committee. The subgroup is chaired by Lauren Meadows, Alltel's vice president of application development for its Mortgage Servicing Package. Alltel's website address is http://www.alltel.com.

Consolidation will continue in the mortgage banking industry, and low profit margins, high leverage, and growing subprime originations will weaken a "relatively stable" credit profile overall for conventional mortgage bankers, according to Moody's Investors Service.In a new industry outlook report, the rating agency said it does not expect near-term downgrades in the industry "primarily due to improved risk management techniques and strong efforts to sustain healthy liquidity." Moody's said the "overwhelming influence" of Fannie Mae and Freddie Mac is "likely to intensify" as their automated technologies become standard and they expand their presence in the alternative-A and subprime markets. The report noted that much of the consolidation in the past two years has been incidental to commercial banking mergers, but said Moody's believes it will continue "irrespective of what happens" in the commercial banking industry. "Greater competition among mortgage originators, the costs of new technologies, and scale economies in servicing and securitization, make it increasingly difficult for smaller mortgage banks to survive as independent entities," Moody's said. The Moody's website address is http://www.moodys.com.