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"Outsourcing is an alternative that must be fully integrated with organizational culture, strategy, disciplines, measurements and capabilities--it is neither a panacea for success nor a formula for national decline."  --Mark Dangelo.

Businesses Want More Streamlined Wire Transfer Systems
McAfee, Jamie
Small and large companies want a more streamlined process for making wire transfer payments and favor a single remittance information standard. Wire transfer volume has the potential to grow significantly if parties involved in the wire transfer process work together to overcome current inefficiencies, according to findings of a study by New York-based The Clearing House Payments Co. and the Federal Reserve Banks.

However, without changes, customers could be less likely to adopt wire as a replacement for checks, even for payments that would benefit from wire's immediacy and finality, the report cautioned.

"Business-to-Business Wire Transfer Payments: Customer Preferences and Opportunities for Financial Institutions," also found that institutions are willing to pay more for payments that include remittance information, since this information would streamline their accounts payable and receivable operations.

"This research breaks new ground by identifying what corporations would like to see in their wire payments to make their internal processes more efficient and less costly, and confirms that corporations are willing to pay more to have remittance information included with wire payments," said Hank Farrar, senior vice president of CHIPS for The Clearing House Payments Co. "The research shows that wire transfer volume can grow significantly, but only if all parties in the wire transfer process work together now."

According to the study, respondents said that more than 80 percent of their payments (by volume) are still made by check. One of the challenges companies face is that most accounting and bank-provided cash management systems do not work together, making process automation and straight-though-processing of wire transfer payments difficult to achieve.

A consensus exists among users of wire payments that there is a need to create a common standard for sending and receiving remittance information with the payment, the findings said. Ninety-four percent of respondents said it is "valuable" to include remittance information with the wire payment; 65 percent said it is "very valuable."

The study also found that 58 percent of respondents said they are willing to pay an additional amount for wires that include remittance information. On average, respondents indicated that they'd be willing to pay $1.67 additional for payments that include remittance information. Thirty-two percent of respondents are willing to pay at least an additional $3.

The Clearing House and the Federal Reserve Banks conducted the research from February through August.
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The Realities of Mortgage Outsourcing Beyond 2006
Dangelo, Mark
(Mark Dangelo is an independent advisor and consultant within the mortgage and real estate industries an a regular contributor to MBA Tech NewsLink. He can be reached at mark@mpdangelo.com. His books, articles and podcasts can be found at www.innovative-relevance.com.) 

Once portrayed solely for its economic savings, the use of outsourcing within the mortgage industry has matured to recognize the use of captive facilities, competency compartmentalization and a ubiquitous need for improved sourcing and delivery efficiencies.

From the lessons learned over the past 10 years, several generic axioms are now accepted:

1. 50-65 percent of the costs of the back-office and sourcing functions for mortgage processing (non-servicing) are directly attributable to labor.

2. 15-30 percent can be claimed to be costs associated with varying regulations, compliance needs or costs of doing business in a given locale.

3. 10-20 percent of the origination costs for sourcing is as a result of technologies, on-going improvements or general infrastructure maintenance.

4. Four to seven percent of the total budgeted yearly cost of business unit or "transaction costs" need to be allocated to the administration of an outsourcing contract and not the one to three percent typically touted by outsourcing firms.

Additionally, the size of the transactions executed with outsourcers has dramatically shrunk as companies seek "best-in-class" solutions that can be combined together for greater efficiencies and reduced cycle times. Forward thinking organizations are recognizing the need for cooperation with vendors and the use of strategic or transformation outsourcing to achieve sustainable gains with less retribution. This is not to say the contracts, SLA, OLA or JPA (joint performance agreements) are less important, but these are being complemented with KPI's (key performance indicators), continuous measurements (into the corporate dashboards and scorecards) and transparency of operation.

While some independent advisors continually advocate lower cost for vendor selection, there is a growing realization that price is no longer the determining factor for deals. Pragmatism and partnership are becoming the norm based on collaborative vendor and client responsibilities, continuous improvements and on-going and required organizational transformations (i.e., organizations don't stay the same so why should a contract deal?).

So as the mortgage industry begins a painful retrenchment, outsourcing will take on a much different role from the back office and into the boardroom with increased acceptance and visibility. As I've said countless times in publications and my books, outsourcing is an alternative that must be fully integrated with organizational culture, strategy, disciplines, measurements and capabilities-it is neither a panacea for success nor a formula for national decline. It is about determining the proper mix and value for your organization regardless of what you think the "other guy" is doing.

(The views expressed here do not necessarily reflect the views or policies of the Mortgage Bankers Association. MBA NewsLink welcomes your contributions. Articles and inquiries should be submitted to Mike Sorohan, editor, at msorohan@mortgagebankers.org.)
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Case Study: Second Federal Savings & Loan Shifts Technology Gears
MBA Staff

WHO:
Second Federal Savings & Loan, Cicero, Ill., with 2,000 loan customers and $260 million in assets.

Mortgage Builder Software Inc., Southfield, Mich., a provider of mortgage banking software services.

PROBLEM:
After a "traumatic" and frustrating installation attempt by another vendor of a loan origination technology system, Second Federal came to the conclusion that its experience was a classic case of over- promising and under-delivering.

"The package that the first vendor demonstrated and sold us was not really what we got," said Octavio Valle, network administrator for Second Federal. "The installation process took much longer than promised and communicating with them became difficult. There were also security issues. The bottom line is, we needed a system that would function properly for us based on our business practices that could be installed quickly and efficiently."

SOLUTION:
Second Federal contracted with Mortgage Builder to implement a new loan origination technology system. Valle said the system went up quickly and efficiently, in contrast to the previous vendor.

"Mortgage Builder quickly accessed our needs.  Their programming staff walked me through the installation and continued to support and coach me though the entire implementation process," said Valle. "The speed of implementation from install to training to live date was incredible. We communicate much better with Mortgage Builder than with our previous vendor and, if we have questions, we have the same technical contact every time."

RESULTS:
"The system does everything we need and more," said Joan Batcha, chief lending officer for Second Federal. "The functionality for anyone with Internet access to securely upload a loan file has proved to be our biggest competitive advantage."

"In light of their last experience, our goal was to get Second Federal up and running on our system as quickly and smoothly as possible," said Keven Smith, president of Mortgage Builder Software. "We are pleased that we have been able to provide them with the technological efficiencies and improved workflow that they had been seeking all along and we will be here to support them over the long haul."

(Has your company solved a work challenge through technology? MBA Tech NewsLink accepts case studies that document challenges, steps taken to address those challenges and documented results. Submit inquiries to Mike Sorohan, editor, at msorohan@mortgagebankers.org. Case studies published in MBA Tech NewsLink do not connote endorsement of any particular product, technology or process and are presented for information purposes as a benefit to MBA members.)
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Lawrence Earns MISMO Staff Appreciation Award
Waugaman, Angela

CHICAGO--Denise Lawrence, senior business analyst of compliance with Livonia, Mich.-based Dynatek Inc., received the Staff Appreciation Award from MISMO, a not-for-profit subsidiary of the Mortgage Bankers Association. The award, presented at MBA's 93rd Annual Convention & Expo here, recognized Lawrence's "dedicated and prominent service to MISMO."

Doug Duncan, president of MISMO and chief economist & senior vice president of research and business development at MBA, said Lawrence has been instrumental in the continuing success of MISMO.

"MISMO is extremely fortunate to have many hard working volunteers striving toward its success and it's our pleasure to recognize those individuals," Duncan said. "Given all that Denise has accomplished on our behalf and on behalf of the industry, she truly deserves this award."

Lawrence brings 21 years of experience in the mortgage industry. During that time she held positions as a processor, closer, loan officer, branch manager, regional underwriter, compliance officer and vice president of operations. Past activities in the mortgage industry included chairman of the Local MBA Education Committee and member of the State MBA Education Committee. 

Lawrence has been the lead compliance officer for Dynatek for more than 10 years. She has the responsibility of monitoring all compliance changes in the industry while keeping Dynatek's software within tolerance, which requires working directly with MBA, FHA, Washington attorneys, Fannie Mae, and Freddie Mac.  She has the designations of Direct Endorsement Underwriter Chums # under 500 and VA Approved Automatic Underwriter.

In addition, Lawrence has participated in defining data standards for the industry through MISMO. Within MISMO, she is the chair of the Origination workgroup and designated representative in the Core Data workgroup and Council of Chairs. She is a recognized expert in the field of mortgage origination.

The Staff Appreciation Award recipient is selected by the MISMO staff, based on a host of criteria, and is ratified by the MISMO Board of Directors. MISMO presents two staff appreciation awards, one to a residential participant at the MBA Annual Convention & Expo and one to a commercial participant at the MBA Commercial Real Estate Finance/Multifamily Housing (CREF) Convention & Expo.

MISMO, a not-for-profit subsidiary of MBA, develops data transfer protocols that span the $12 trillion residential and commercial real estate finance industry. MISMO coordinates the development and maintenance of Internet-based Extensible Markup Language (XML) real estate finance specifications and electronic mortgage guidelines through a voluntary, open and vendor-neutral process, and its workgroups include more than 1,000 individual participants from more than 165 subscribing organizations representing all sectors of the residential and commercial industry: lenders, originators, servicers, investors, government-sponsored enterprises, technology vendors, multiservice providers, credit reporting agencies, insurance firms, tax services and law firms. For more information on MISMO, visit www.mismo.org.
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MBA Elects New RESTECH Leadership, Tech Software Committee Membership
Waugaman, Angela

CHICAGO--The Mortgage Bankers Association announced the appointment of Allan Lubitz, senior vice president with Option One Mortgage Corp., Irvine, Calif., as chairman of its Residential Technology Steering Committee (RESTECH). Chris Burckhardt, CIO of Pulte Mortgage, Englewood, Colo., was named vice chairman. 

RESTECH is the technology steering committee for MBA's residential members, responsible for identifying various issues and making recommendations for policies and initiatives involving technology to MBA's Residential Board of Governors (RESBOG). RESTECH is composed of eight representatives from MBA member companies of all sizes.

"I am honored to welcome Allan and Chris to the RESTECH leadership," said Robert Story Jr., CMB, RESBOG chairman and president of Seattle Financial Group in Seattle. "I have seen the many contributions they have made to the association and I look forward to working closely with them over the next year."

Additionally, RESTECH's Residential Technology Software and Services Subcommittee has been assembled for 2006-2007. This subcommittee was initiated last year and helps improve communication between the residential vendor community and the MBA and its leadership. The mission of this subcommittee is to provide a forum for discussion and escalation of new issues as seen by the residential technology software and services provider community, and for vetting industry issues that RESTECH (or other committee) is currently discussing, where a software or service provider consensus is desired. 

Members of this Subcommittee include:

--Tim Anderson, vice president of eMortgage Services with Stewart Transaction Solutions, Jacksonville, Fla.;
--Mike Bixby, president of Bixby Consulting Inc., Hialeah, Fla.;
--Michael Brady, CIO at Lending Tree Inc., Charlotte, N.C.;
--Brian Fitzpatrick, president of Lydian Technology Group, Jacksonville, Fla.;
--Mike Fleck, system development manager with AIG United Guaranty, Greensboro, N.C.;
--Mick Goldstein, executive vice president and chief security officer at RealEC Technologies, Santa Ana, Calif.;
--Roger Gudobba, senior principal of strategic business development at Wolters Kluwer Financial Services, Troy, Mich.;
--Diana Helander, group business development manager of worldwide standards with Adobe Systems, McLean, Va.;
--Phil Huff, president and CEO of eLynx Ltd., Cincinnati;
--Roy Martin, vice president of sales and marketing with Xetus Corp., Mountain View, Calif.;
--Terry Van Bibber, president of Safedocs Inc., Walnut Creek, Calif.;
--Prashant Kothari, president of String Information Services, Washington, D.C.; and
--Chetan Patel, executive vice president of MortgageHub, Conshohocken, Pa.

The co-chairs and RESTECH liaisons for this subcommittee are:

--David Walton, vice president of software engineering and CIO at Fiserv Lending Solutions-UniFi Products, Plantation, Fla.; and
--Ruth Thompson, CIO with Desert Document Services Inc., Tempe, Ariz.
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Tech Briefs
MBA Staff
ComplianceEase, San Francisco, announced availability of ComplianceAnalyzer Plus, which combines an automated compliance system, ComplianceAnalyzer, with a loan-level insurance-backed warranty, AssureCert. ComplianceAnalyzer Plus is an integrated suite of regulatory compliance protection, mitigation and indemnification.

Through ComplianceAnalyzer Plus, each eligible loan is integrated with AssureCert's warranty protection coverage. This warranty protection is scalable at the loan level up to $250,000 per loan and is transferable from the lender to the secondary market investor. AssureCert's warranty plans also provide ComplianceAnalyzer Plus users and their investors with a five-year extended protection term that is backed by an AM Best A- (Excellent) or better-rated insurer.

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eLynx Ltd., Cincinnati, a portfolio company of American Capital Strategies Ltd., and a provider of Web services for lenders and insurance companies, and Goodmail Systems Inc., Mountain View, Calif., announced a partnership to automatically include CertifiedEmail functionality in the eLynx e-services platform including electronic document delivery, electronic signature and integrated paper fulfillment.

Currently working with 17 of the top 20 U.S. lenders within a customer base of more than 500 clients, eLynx's e-services platform uses e-mail to deliver links to Web sites where consumers can securely obtain their mortgage and insurance documents in a paperless manner. Goodmail provides accredited volume e-mail senders with the CertifiedEmail technology imprinting outgoing e-mail messages with cryptographically secure tokens that are recognized by participating mailbox providers such as AOL and Yahoo! When such mailbox providers receive CertifiedEmail, they automatically route messages to the server-level inbox, past content and volume filters, rendering links and images active by default. 

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Gallagher Financial Systems Inc., Brentwood, Tenn., announced release of NetOxygen Migrator, a change management platform.

NetOxygen Migrator, part of GFS' Enterprise Manager suite of .NET tools, allows administrators to respond to their customers' unique needs. For example, administrators, with proper security and using NetOxygen's tools, can respond to market demands by adding or modifying new products, pricing and workflow processing rules.
 
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Advectis Inc., Atlanta, a provider of electronic mortgage document collaboration services, announced that three companies have selected BlitzDocs Collaboration Suite for electronic document submission, image-based underwriting and electronic loan delivery: Wisconsin-based GN Mortgage, Massachusetts-based East West Mortgage and California-based Wholesale Lending Online.

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XSell LLC, Jacksonville, Fla., a provider of customer retention and cross-sell services to the financial services industry, announced a partnership with Houston-based TeleVoice, a provider of automated voice response systems, to offer the XSell Customer Service Marketing platform to its IVR (interactive voice response) customers.

With this partnership, TeleVoice can offer its financial institution clients a platform that provides them with the ability to target inbound callers for retention and cross-sell opportunities when they initiate contact with the institution through the IVR. The XSell Customer Service Marketing platform enables creation and presentation of personalized and customized product offers based on the characteristics and attributes of both the customer and product offers and can be easily integrated with a number of IVR platforms.

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VisionCore, Irvine, Calif., a wholly owned business unit of CoreLogic, Sacramento, Calif., a provider of mortgage risk assessment and fraud prevention services, announced the launch of its next-generation mortgage suite. The company's offerings connect the retail, wholesale and correspondent lending community through the use of advanced customer portals, automated underwriting, pricing and third party risk and approval tools. 

The VisionCore suite integrates loan submission, loan product and pricing selection, automated underwriting and broker sign-up and management in one Web-based portal. The portal can be customized and enables collaboration through a variety of online tools.
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MBA Legal Issues in Mortgage Technology Conference Nov. 15-17
Murray, Michael
The Mortgage Bankers Association's 2006 Legal Issues in Mortgage Technology Conference will take place November 15-17, at the Arizona Biltmore Resort & Spa in Phoenix.

The conference includes panels focusing on data security, consumer privacy, fraud detection and identity thefty as well as updates on legal and regulatory issues that can have a profound effect on business.

Attendees can hear current developments on MISMO and eMortgages, eRecording and eNotarization, listen to a GSE Update and learn more about the Mortgage Electronic Registry System (MERS) eRegistry or HMDA data, fair lending and emerging markets at the conference.

Participants at the conference can dig deeper into topics or ask informal questions to indsutry experts at Round Table discussions. In addition, hear the experience of other industry participants directly involved in a particular implementation or business process.

The conference provides a forum for feedback and opportunities to network with colleague in throughout the event.

Early registration ends November 1 . Register online at http://store.mortgagebankers.org or call (800) 793-6222.Click here for more information. 

Note: The Legal Issues in Mortgage Technology Conference is intended to satisfy CLE course requirement upon approval by applicable state bar licensing entities.
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Research DataNotes Examines Energy Prices, Delinquencies
Stokes, Aleis

Research DataNotes, an analysis tool provided by the Mortgage Bankers Association's research and economics staff, provides insight and analysis into some of the most important topics affecting the real estate finance industry. Research DataNotes is produced, at a minimum, on a quarterly basis, covering a residential, commercial/multifamily or benchmarking issue and will be available on MBA's Web site, www.mortgagebankers.org.

The second residential edition of Research DataNotes, Energy Prices and Delinquency Rates, reviews factors that influence the relationship between energy prices and delinquency rates.

Why should energy prices impact mortgage delinquencies? According to the DataNote, in winter conventional wisdom suggests that homeowners are more likely to skip their mortgage payment in order to pay the heating bill. Recognizing that the winter of 2005-2006 was quite mild, spending for fuels for transportation and for home heating has represented a diminishing but still significant share of consumer expenditures over time.

The DataNote also presents the results from MBA's Q1 2006 National Delinquency Survey as well as data on energy price trends.

To download the new edition of Research DataNotes, go to http://mortgagebankers.org/files/Bulletin/InternalResource/45838_.pdf.
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MBA Tech NewsLink Reprints Available
MBA Staff
Articles appearing in MBA Tech NewsLink are available as reprints for a nominal fee. Reprints are done on quality paper or can be sent electronically as a .PDF file. Reprints can be distributed to your employees, to illustrate presentations or for other communication purposes.

For reprint information on stories in MBA Tech NewsLink, contact Bob Thornton at (800) 394-5157, ext. 28.
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17 Earn Certified Mortgage Technologist Designation
Stokes, Aleis

CHICAGO--CampusMBA, the education arm of the Mortgage Bankers Association, awarded the Certified Mortgage Technologist (CMT) designation to 17 mortgage industry professionals in a ceremony held here at the association's 93rd Annual Convention & Expo.

"The CMT designation represents expertise in technology and the mortgage industry," said Allan Lubitz, senior vice president and CIO of Option One Mortgage Corp., Irvine, Calif., and chairman of MBA's Residential Technology Committee (ResTech). "I commend CMT designees for their dedication and professionalism."  

This year's CMTs include:

--Shelley Boland, head of technology with Macquarie Mortgages USA Inc., Memphis, Tenn.;
--Jo Ann Crook, product executive with Fidelity Information Services, Jacksonville, Fla.;
--Doug Doedens, vice president of enterprise technology architecture with First American Title Insurance Co., Santa Ana, Calif.;
--Dave Donovan, technology strategy manager with Fidelity National Information Services, Jacksonville, Fla.;
--Sue Ellingson, marketing director with Netupdate Inc., Bellevue, Wash.;
--Doug Horton, vice president and IS channel leader with LandAmerica, Glen Allen, Va.;
--John Jenkins, director of business systems with HSBC Mortgage Services, Charlotte, N.C.
--Clint Johnson, vice president with SunTrust Mortgage Inc., Richmond, Va.;
--Chris King, president of CRMnow, Aliso Viejo, Calif.;
--Erik Krogh, first vice president with IndyMac Bank, Pasadena, Calif.;
--Robert Lux, vice president of enterprise application services with GMAC Residential Holding Corp., Horsham, Pa.;
--Robert Murray, vice president of enterprise technology architecture with First American Title Insurance Co., Santa Ana, Calif.;
--James Owens, vice president of information management consulting with Fidelity National Financial, Jacksonville, Fla.;
--Thomas Parker, senior manager with E*Trade Bank, Laguna Niguel, Calif.;
--Timothy Rush, sales & business development with First American SMS, Orange, Calif.;
--Joan White, systems analyst with AIG United Guaranty, Greensboro, N.C.; and
--David Williamson, executive vice president and director of mortgage consulting with LendingLogix, McKinney, Texas.

The CMT designation is presented to information technology professionals, including managers and executives, in recognition of their industry experience, professional education, and their knowledge of the unique technological needs of the real estate finance industry. The first class graduated in 2004 and to date 52 people have received the designation.

To be eligible for designation consideration, candidates must meet rigorous standards. CMT candidates must amass 150 points earned through a combination of professional experience; secondary education; continuing education through MBA-sponsored events and CampusMBA courses; and participation in MBA at the local, state and/or national level. They must have a minimum of two years industry experience, have a technology background and be in a technology leadership position within the residential or commercial real estate finance industry.

After meeting the specific requirements, candidates then submit a thesis on a specific initiative, implementation, or conversion in which they actively participated, and pass a two part oral presentation and exam conducted by a panel of industry experts. Designees must meet continuing education requirements every two years to remain in active status.

To learn more or enroll in the Certified Mortgage Technologist designation program, visit Professional Designations at www.campusmba.org or call (202) 557-2763.

For more information on CampusMBA, winner of the 2004 Best Virtual Corporate University/Best Use of Technology CUBIC Award, visit www.campusmba.org or call (800) 348-8653.
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Tech People in the News
MBA Staff

MortgageHub Hires Demster, Whitson
MortgageHub, Conshohocken, Pa., hired David Demster as president of the mortgage products division and Mike Whitson as senior partner in the services division. 

Demster, a 25-year industry veteran, is responsible for overseeing and managing the company's mortgage technology products, including the company's web-based wholesale, correspondent and retail lending systems; its product, pricing and decisioning engines; and the company's warehouse lending solution, among others.

Prior to joining MortgageHub, Demster served as vice president of the mortgage business unit of Fair Isaac Corp. Before that, his positions included leadership roles with London Bridge Group, CheckFree Corp., SSI and Fannie Mae. 

Whitson will manage and develop the company's service offerings, with a focus on strategy consulting and contracting services for the mortgage industry. His background includes positions as general partner/strategic operations planner for telecommunications consulting firm Canopy Partners, and vice president of information technologies and customer support for WSNET. Prior to these positions, Whitson worked for several organizations, including Stearman Technology Group, Global Interactive, Resnet Communications and Lodgenet Entertainment. 

Resolve Technology Appoints Rubinstein
Resolve Technology, Boston, appointed David Rubinstein as chief operating officer. He will oversee all aspects of Resolve's customer service, operations and financial functions.

Rubinstein has 25 years of software and services experience. Prior to Resolve he was COO with Invoke Solutions Inc. where he was responsible for the turnaround and re-engineering of Invoke's software service for direct and channel customers. Previously he was senior vice president of global service operations for Parametric Technology Corp.

Maimone Joins Valocity
Valocity, Memphis, Tenn., named Mark Maimone senior vice president and director of business development. He will lead the company's strategic sales and marketing growth initiatives. 

Maimone has more than 25 years of experience in sales and management. Previously, he was a vice president of sales at Premier Appraisals in Alpharetta, Ga., which was acquired by LandAmerica OneStop.
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Putting the Brakes on AVM Risk
Johnson, Allen

(Allen Johnson is vice president of sales and marketing with Credit Plus Inc., Salisbury, Md., a provider of credit information. For more information, call 800-258-3488, or visit the company's Web site at www.creditplus.com.)

Take a look at any busy highway: drivers zooming from place to place, dodging in and out of traffic as if getting there fast is the most important goal. The quest for speed seems to accelerate through every area of modern life, whether it's a busy commuter hurrying from errand to errand, a computer operator wishing her software would download faster, or a potential homeowner waiting to close his loan.

It's especially true in the fast-paced mortgage industry where ever-advancing technology has given us a world of automated systems and online transactions that allow pre-approvals in minutes, appraisals in hours and complete mortgage transactions in just weeks instead of months.

With all that speed comes a level of risk, of course. For zooming cars it's the increased potential for serious accidents and injuries. In the high-speed mortgage environment, technology such as automated valuation models (AVMs) has delivered the speed, but along with it, the potential risk of losses for the lender.

How do we mitigate the risk? Just as automobile insurance helps lower the financial risk of driving a car, a different kind of 'insurance' can reduce the risk factor for mortgage lenders driven by the need to provide faster, more streamlined services. For example, the Warranted AVM now offered by Credit Plus is designed to help lenders meet these challenges and reduce the risk.

Managing risk through AVMs
As mortgage professionals search for improved ways to offer a more streamlined process, Warranted AVMs provide a promising solution. While standard AVMs have effectively eliminated the slow turn-around times and high cost of traditional appraisals, the warranted product goes a step further. The typical AVM determines property valuation by collecting and analyzing data from public and proprietary sources, including demographics, sales prices, property characteristics, price trends and assessments. Results generally have been accurate; however there's always been an element of risk that lenders are sometimes unwilling to take. Driven by the industry's need for a cost-effective way to deliver more speed with less risk, Credit Plus offers the Warranted AVM, one of the few systems in the industry covering losses up to and including foreclosure.

It's a simple process: When an AVM is ordered, coverage eligibility is determined based on the lender's guidelines. If the loan qualifies, the lender pays the warranty fee when the loan is closed and funded. If it fails to qualify, only the AVM fee needs to be paid.

If any concerns come up after the loan closes, and if overvaluation is likely, a manual appraisal is requested for comparison. When a loan is overvalued enough to justify a claim, the lender submits it and any overvaluation will be covered, plus costs as outlined in the lender's agreement, which may include foreclosure costs depending upon contract terms. The system covers all widely accepted AVM models, including cascading products that integrate multiple AVMs results.

Better decision-making tool
The Warranted AVM offers benefits to lenders, mortgage brokers and borrowers. For lenders, determining the right loans to fund can be a difficult task. The warranted product offers an efficient tool that makes the decision easier by simplifying verification of loan value. Lenders also benefit from the accelerated lending process and increased production--and the ability to steer clear of financial risk. The reduced risk allows lenders to increase the variety of loans that can be appraised via automated valuation, which in turn, benefits brokers and borrowers. Other major benefits for brokers include the faster delivery and lower costs.

Additional benefits include:

 Unlimited flexibility - Offers lenders an exceptional level of customization for criteria such as property type, LTV, FICO, loss limit, loan value, lien position, terms, loan type, variance ceiling, AVM cascading models and other variable factors to ensure the maximum level of protection.

 Greater confidence in valuation - Advanced technology standardizes confidence scores across multiple AVM models providing increased assurance of accurate results.

 More objective valuation - Computer-generated results cannot be influenced by any comments or opinions.

 Reduced loan processing cost - Saves on appraisal costs, plus the warranty is not paid if the loan doesn't fund.

 Comprehensive coverage - Including losses due to overvaluation and other related costs, even up to foreclosure.

In today's mortgage environment, there's no sign that anyone wants to slow down in the race for an ever-faster, more streamlined loan process; however, we can put the brakes on the risk involved. For lenders and mortgage brokers that makes this a good time to think about taking the smart route to faster appraisals, lower costs and reduced risk. Warranted AVMs offer the highest level of protection--at a low cost and with minimal documentation--which gives you a competitive edge in a very competitive environment.

(The views expressed in Tech Forum do not necessarily reflect the views or policies of the Mortgage Bankers Association. MBA Tech NewsLink welcomes your contributions. Articles and inquiries should be submitted to Mike Sorohan, editor, at msorohan@mortgagebankers.org.)
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About MBA Tech Newslink
 
Publisher: Cheryl Crispen, Senior Vice President - Communications and Marketing
Director of Online Publications: Mike Sorohan MSorohan@mortgagebankers.org
Deputy Editor: Michael Murray MMurray@mortgagebankers.org
Senior Staff Writer: Vijay Palaparty 202/557/2904 VPalaparty@mortgagebankers.org
Advertising Opportunities: Bill Farmakis 203/834-8832 bill@jlfarmakis.com

Any reprints or other use of these articles in whole or in substantial part, in any medium, requires advance written permission from the Mortgage Bankers Association. For reprint information on stories in MBA Tech Newslink, please contact Joanna Vulakh at 1-800-394-5157 x25.

MBA Tech Newslink, a weekly electronic publication, is a member benefit free to employees of MBA member companies, and available by paid subscription to non-members. For membership information, visit MBA's website at http://www.mortgagebankers.org/AboutMBA/membership

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