MISMO Version 3.0, scheduled for release in the first quarter of next year, is interoperable and compatible with other standards, including XML, XML Schema, SOAP and Xling, said Greg Alvord, senior vice president of technology at Optimal Blue LLC, Plano, Texas and chairman of MISMO’s Architecture Committee.

“Changes to the model are immediately available to all of us in these formats because they are all subsets of the same tree,” Alvord said.

Tim Anderson, president of SigniaDocs, Jacksonville, Fla., said in general, only 10-20 percent of mortgages sold to the secondary market are audited before purchase—results he called “terrible.”

“That’s 80 percent of mortgages that never really were vetted,” Anderson said. “That’s what we are learning now because everybody is finding a reason now for [lenders] to be buying loans back.”

Anderson likens SmartDocs® adoption—data and document validated and checked to mortgage document—to a video camera scanning a crime scene to prevent fraud.

“Every one of those loans can be electronically audited,” Anderson said. “It’s going to reduce fraud, it’s going to reduce risk and it’s going to reduce a lot of this stuff if [lenders] go electronic…When you can audit and underwrite 100 percent of the loan pool, you have eliminated a lot of these issues we are now experiencing in debt because we are processing dumb paper and dumb images.”

Fannie Mae, Freddie Mac and GMAC now purchase electronic notes; the MERS registry supports an electronic mortgage process, Anderson said. The MERS eRregistry consists of nearly 35,000 eNotes, an 85 percent increase since its first year. Additionally, more large counties adopting eRecordings; Anderson noted that the 625 largest counties in the U.S. represent nearly 80 percent of all transactions.

Alvord said the industry is closing gaps among origination, secondary marketing and servicing by including data generated during origination. “We have the unified loan definition across all three former silos of information,” he said. “We are including the ability to include the loan as originated to any downstream process.”

MISMO version 3.0 would give lenders an ability to generate new messages as subsets of the model for lenders to establish new messages, including combining first and second trusts together, and communicate with an organization. 

“These standards are very general and allow for interpretation,” Alvord said. “We are generating a set of information that will communicate to our organizations how real estate finance should be using the standard in order to maintain its interoperability.”

Moving to MISMO version 3.0 also allows multilingual communication by switching from “attributes” to “elements.” “That is an Internet way to be able to say, ‘this is written in English, this is written in Spanish,’” Alvord said.
(Back To Top)

ConformX’s user interface provides lenders with more automation and fewer screens to complete closing documents. The upgrade pulls data directly from a lender’s loan origination system and runs data integrity, high-cost checks and predatory lending checks on the loan. DocuTech’s legal compliance staff automatically updates the program with new regulations, eliminating time-consuming document maintenance.

MRG Forms Alliance with ComplianceEase
MRG Document Technologies, Dallas, a provider of compliance and documentation services for the financial industry, announced integration with San Francisco-based ComplianceEase, a provider of risk management services for the residential mortgage industry, to provide automated compliance auditing for closing documents prepared by MRG.

ComplianceEase’s automated compliance system, ComplianceAnalyzer, is accessible through MRG’s document preparation system, MIRACLE ONLINE. The integration enables lenders using MRG to immediately access all ComplianceEase tests and reports online. Audit results for possible compliance issues are available in both summary and detail formats.

United Lender Services Selects Salient for Outsourced Title Processing
Salient Business Solutions, Gurgaon, India/New York, a provider of business process outsourcing services, announced that Pittsburgh-based United Lender Services selected Salient as its third-party title processing provider.

In early 2008, United General Title Insurance Co. sold its operating assets to United Lender Services. This transition led ULS Corp. to migrate to a new operating platform using different technology. ULS Corp. entered a pilot with Salient.

RamQuest Launches Problem Resolution Team
RamQuest Software Inc., Plano, Texas, introduced a specialized team designated for advanced problem resolution. RamQuest/Rx offers RamQuest customers a team of dedicated, high-level specialists. 

RamQuest customers can tailor products to meet specific business needs through configuration, adoption and implementation of the tools within the suite. RamQuest/Rx consists of specialists led by Randy Hamilton, a four-year RamQuest veteran.

Salient Releases Salient Clear 2 Close
Salient Business Solutions, Gurgaon, India and New York, a provider of business process outsourcing services, released Salient Clear 2 Close, a Web-based loan processing and tracking portal.

The portal enables Salient to provide its customers with transparency and accountability regarding loans outsourced to Salient for processing. It allows loan officers to submit a loan, check and print the status of all their loans and immediately address pending issues.

Timios Launches Settlement Service
Timios Inc., Westlake Village, Calif., a nationwide provider of title insurance and settlement services, launched its products and services nationwide. Founded by a group of settlement services veterans, the company operates as a national title agent.

Timios uses a centralized processing and fulfillment model with one company-wide operating system. Combined with direct integrations with its lender customers. The company is licensed in 25 states and anticipates being licensed in 35 states by the end of 2008.

Lend America Launches H4H Outreach Program
Lend America, Melville, N.Y., launched a specialized Hope for Homeowners Outreach Program to enable institutional investors, such as Wall Street banks, hedge funds and other first lien holders to recapture principal from non-performing residential mortgage portfolios while helping homeowners avoid foreclosure. 

The company, which is licensed to do business in more than 40 states, is finalizing a structure transaction assignment for a major financial institution to help refinance as much as $1 billion of their portfolio of residential mortgages under the new H4H Program and is in negotiations with several others.

AARMR, ComplianceEase Partner
ComplianceEase, San Francisco, a provider of mortgage risk management services, announced that the Board of Directors of the American Association of Residential Mortgage Regulators approved adoption of examination automation services for its members, selecting ComplianceAnalyzer and RegulatorConnect to provide mortgage lending oversight.

ComplianceEase’s technology platform will enable state-regulated mortgage brokers, lenders and servicers to electronically transfer loan information to regulators, reducing dependence on paper files. The examinations will use ComplianceAnalyzer’s compliance reviews, which are also readily available to licensees through more than 30 mortgage technology platforms.
(Back To Top)

Robert Smallwood, vice president in Love Funding’s Cleveland office, originated the transaction and secured financing through the HUD 232/223(f) loan program. Terms of the loan, which was funded with the issuance of GNMA Securities, include a 6.27 percent interest rate and 35-year amortization.

Governor’s Village, a 32,487-square-foot assisted living facility, contains 32 assisted living units and 16 memory care units. The borrower, Lawton, Mich.-based NaviGroup, owns and operates the majority of Governor’s Village.
 
The transaction represents the third loan Love Funding closed for NaviGroup. Love Funding previously secured more than $5.4 million in financing for Governor’s Pointe Assisted Living Facility in Mentor, Ohio, and White Oaks Assisted Living and Dementia in Lawton, Mich.
(Back To Top)

The award, announced here during MBA’s 95th Annual Convention and Expo, was presented to Lira for his “outstanding dedication and prominent service” to MISMO.

"MISMO is very fortunate to have so many hard working and dedicated volunteers who contribute their time and expertise year after year," said Harry Gardner, president of MISMO and vice president of industry technology. "Over the years Abdias Lira has been deeply involved with the SMART Doc® specification and guidance, and has led the development of the new SMART Doc Version 3 specification that will be released in 2009. Abdias has also been a key leader of the MISMO Version 3.0 architecture development process and the increasingly relevant eRecording and eNotarization specifications and guidance.”

Lira joined Wolters Kluwer’s VMP unit in 2001. Since then he has played a key role in design and development of the company’s mortgage compliance products. Prior to joining Wolters Kluwer, Lira ran his own software company in Brazil for nearly 13 years, where he developed systems for electronic document creation and processing for a range of clients. He is a member of the MISMO Governance Committee; vice chair of the eMortgage Workgroup and an active participant in several other MISMO workgroups.  

The Staff Appreciation Award recipient is selected by the MISMO staff, based on a host of criteria. MISMO presents two staff appreciation awards annually, one to a residential participant at the MBA Annual Convention & Expo and one to a commercial participant at the MBA CREF/Multifamily Housing Convention & Expo.
(Back To Top)

The Photo Gallery includes images from nearly every event at the Annual Convention, including ribbon-cutting ceremonies; shots of interviews by media outlets such as CNBC with MBA officers and staff; general sessions; and “atmosphere” that gives the Annual Convention its unique flavor.

To view the Photo Gallery, visit http://picasaweb.google.com/MortgageBankersAssociation/
MBAS95thAnnualConventionExpo2008PhotoGallery?authkey=XALDO5ykCi0#.
(Back To Top)

The conference, Rise to the Challenge—Reporting Accurately in Volatile Markets, targets both residential and commercial/multifamily real estate finance professionals.

Upheaval in the mortgage markets, combined with changes in accounting and disclosure requirements, have created unprecedented financial reporting challenges for mortgage companies. MBA’s Accounting, Tax and Financial Analysis Conference 2008 offers a unique opportunity for mortgage finance professionals to share perspectives on the proper implementation of accounting and tax rules as well as prudent financial analysis and risk management. It also provides the opportunity to earn up to 16 CPE credits.

Register Now; Make Hotel Accommodations
Register online at www.mortgagebankers.org/conferences or call (800) 793-6222 (option 3) Monday–Friday, 9:00 a.m.–5:00 p.m. ET. You can also link directly to the registration form at http://www.mortgagebankers.org/files/conferences/pdf/M2902004_registrationform.pdf.

Accommodations are at the Mandalay Bay Resort and Casino, Las Vegas. Phone (702) 632-7777 or (877) 632-7800. Rates are $149/night standard. Cutoff date for this special rate is Nov. 10.

For more information, visit the conference web site, http://events.mortgagebankers.org/accounting2008/default.html.
(Back To Top)

Edward Hill, senior vice president of government relations at Bank of America, Charlotte, N.C., said new thinking on Capitol Hill debunks the belief that everyone should be a homeowner.

“For the first time, we are seeing members of Congress and other policymakers saying that not everyone needs to own a home,” Hill said here yesterday at the Mortgage Bankers Association’s 95th Annual Convention & Expo. “The idea of homeownership was a powerful and popular message, but now we are hearing people like [Rep.] Barney Frank [D-Mass.] saying ‘maybe not.’ It will be a big challenge going forward—changes that could potentially prevent people from getting mortgages.”

Francis Creighton, vice president and chief lobbyist at MBA, said implementation of the recently passed Housing and Economic Recovery Act of 2008 creates state-level changes as well.

“The S.A.F.E. Licensing Mortgage Act at the state level is one of the issues in HERA,” Creighton said. “Smart legislators will try to tack on more legislation to these types of vehicles. Everyone is preparing for changes.”
 
Hill said advocacy has also become more difficult since Fannie Mae and Freddie Mac were placed into conservatorship. Under the terms of the conservatorship, both government-sponsored enterprises dismantled their lobbying operations. “They are not going to be out there talking anymore,” Hill noted.

Hill said mergers and acquisitions among large financial institutions have contributed to a loss of presence on the Hill. “Larger banks such as Bank of America might have 100 issues before the government,” he said. “But a company such as Countrywide, which has a narrower focus, will have a single-minded focused issue. Large diversified firms like to think they are effective, but there is a lack of focus and they talk to the same committee over and over about many different issues. It’s a consolidation challenge.”

Jason Cole, executive director of federal affairs of UBS Americas Inc., New York, said restructuring is inevitable, along with a new wave of regulation. He and Hill said bankruptcy provisions—measures strongly and successfully opposed thus far by MBA—appear “inevitable,” and that they could be included in a future economic stimulus bill in planning stages.

“From a macro perspective, there has been talk about doing stimulus legislation,” Hill said. “It’s hard to tell though, with two weeks leading up to the election.”

Cole commended partnerships among associations for advocacy, especially on the bankruptcy issue. “The joint trade association effort with MBA and others has been successful on the issue of bankruptcy,” he said. “All of them worked together and no one has tripped over themselves. There was good information sharing. If not, we would have been crammed down nine months ago.”

Cole said he hopes that Congress “runs out the clock” for the remainder of the year on bankruptcy. “If we can have demonstrable evidence of foreclosures going down, rate of work outs go up, we can convince them [policymakers] otherwise,” he said.
(Back To Top)

“This is a fiasco from the standpoint of risk management. Obviously risk management has failed,” said Adam Schneider, partner at Deloitte Consulting, New York. “The crisis has emphasized the reality of systemic risk and the need to throw out the old [ways] and come up with the new thing—a new regulatory approach, a new risk management approach, much less modeling, much more thinking.” 

Schneider said 25 countries, including the United States, are enacting reforms as a result of the credit crunch. Despite these reforms, any new capital raised will not be sufficient to match asset writedowns.

“[Financial institutions] are broken,” Schneider said. “At least one major institution that in the last year has wrote off more money than they ever made. You can’t survive if you write off everything you’ve ever made as a public company.”

MBA created a flow chart of TARP to illustrate distribution of capital into financial institutions. Guidelines for targeting and purchasing assets—$350 billion of the program—include mark-to-market accounting provisions and other issues on which Treasury will report remain to be resolved.

TARP will help get “some of the artery-clogging cholesterol out of the system” despite some implementation provisions that remain in discussion, Schneider said. He said major write-offs took place at the end of September with more to come.

“You would think that we’re done by now, but we don’t seem to be,” Schneider said. “So, financial repair is number one.”

With consolidation among major banks in September—Bank of America acquiring Merrill Lynch; Wells Fargo’s acquisition of Wachovia; and Chase's acquiring WaMu—fewer banks will also be larger banks. “It will feel like Canada in some degree,” Schneider said.
 
Tim Ryan, CMB, senior director of mortgages with J.D. Power and Associates, Westlake, Calif., said after delinquencies, customer retention will depend on how a financial institution treats an individual. “Clearly, the challenged group has a much lower satisfaction level,” he said.
(Back To Top)

MBA Chief Economist Jay Brinkmann will provide an economic/housing outlook for the industry, looking at both the short-term and long term. Brinkmann will be joined by Glenn Schultz, managing director of Wachovia Mortgage Corp., Charlotte, N.C.

For more information, visit the Conference web site, http://events.mortgagebankers.org/95th_annual/default.html. MBA NewsLink will provide coverage.
(Back To Top)