We’re not necessarily looking to break technology news, but we are looking to put it all into greater context for you. Right now we’re hearing:

Understanding The News: Your LOS Should Help You Sound The Compliance Alarm

*Your LOS Should Help You Sound The Compliance Alarm*
**New Integration Launches**

***Do you fear compliance? Your LOS should help. For example, LOS LendingQB has completed an integration with ComplianceEase, a provider of mortgage compliance and risk management solutions. LendingQB integrated ComplianceEase’s ComplianceAnalyzer product with its LOS. The solution automatically runs continuous real-time audits throughout the origination lifecycle of the loan to ensure compliance with federal, state, and municipal consumer credit regulations.

****Using this unique integration, lenders can conduct compliance audits as early as the point-of-sale (POS), thus catching and addressing compliance issues much sooner in the origination process to save time and money. Most systems initiate compliance audits closer to the loan closing process, rather than at the POS where loan officers work. What’s more, LendingQB and ComplianceEase have enhanced the integration so that audits automatically run behind the scenes in real-time up until the point the loan closes. While most mortgage compliance checks must be initiated manually, this integration is automatic and requires no human intervention.

****Also unique to the integration is that it’s completely transparent to users working in LendingQB’s Web-based LOS platform. Whether it’s a loan officer, processor, compliance officer or closing agent, employees never have to leave the application they are accustomed to using. As a result, the lending workflow remains seamless and disruptions and manual interventions are eliminated.

****“At LendingQB, we are ultra-focused on making the lending workflow truly seamless to eliminate manual touch points and the need to jump to another application to complete various tasks,” said Binh Dang, president of LendingQB. “We’re very selective about our integration partners; we wanted to take full advantage of the Web services that ComplianceEase developed so we could achieve absolute transparency. With this integration, a user doesn’t need to remember to run checks because ComplianceAnalyzer is always running in the background. We invested significant development resources to achieve this level of integration.”

****“These days, it’s not common for mortgage lenders to implement compliance checks continuously throughout the origination process,” said Jason Roth, senior vice president of ComplianceEase. “The integration that we developed with LendingQB takes compliance assurance to a new level. The audits are seamless within the LOS, performed much earlier in the origination process, and constantly executed without the need for users to think about them.”

Understand The News: Providing A Richer Servicing Dataset

*Providing A Richer Servicing Dataset*
**CoreLogic Steps Up**

***PROGRESS in Lending has been told that CoreLogic, a provider of information, analytics and business services, is now incorporating anonymized servicer stop advance data into its private-label Residential Mortgage-Backed Securities (RMBS) dataset. This trustee-submitted data will be provided free of charge to both existing and new RMBS data clients.

****The supplemental stop advance data will be at the loan-level rather than aggregated. This will enable investors to make more precise projections of future cash flows and default risks by allowing insight into the characteristics of the loans that have stopped cash flowing for principal, interest or both.

****With this information an investor’s or servicer’s modelers can better assess the risks of current holdings and can infer different levels of loss-mitigation activity, such as servicer transfers. Users can incorporate all data they receive into a standardized, usable format that allows them to run CoreLogic analytics or their own proprietary analytics.

****“The private-label market has been looking for this level of insight for some time,” said Ben Graboske, senior vice president, Real Estate and Financial Services, Data and Analytics Segment at CoreLogic. “The challenge has always been about finding adequate information at the loan level. With these latest enhancements we provide another level of granularity and transparency to assist our clients with their decision-making.”

****The stop advance data is available at the loan level with history dating back to January 2009. Investors and servicers can now perform modeling, historical trending and time series analysis against the non-agency RMBS data with the stop advance data incorporated, into the core product offering. The combination of the non-agency RMBS dataset, along with supplemental data for loan modifications and now servicer stop advances, offers issuing and investment firms the most comprehensive repository of mortgage securities data. Leveraging this information, users can run regression tests on proprietary models referencing actual results as a comparison.

Understanding The News: eLynx Gets Kudos

*eLynx Gets Kudos*
**Receives Award**

***eLynx has been recognized for the second consecutive year as one of the best places to work in the Greater Cincinnati and Northern Kentucky region by the Cincinnati Enquirer. The list of Top Workplaces award winners, was published on Sunday, June 17. Here’s why they won:

****“Creating a positive working environment for our employees is an important goal of ours. The Top Workplaces award, especially now that we’ve earned it for the second consecutive year, gives us valuable feedback on how we are performing against that goal,” said Sharon Matthews, eLynx president and CEO. “This award is particularly gratifying because it is solely based on feedback from our employees. I’m very pleased to see that our people continue to enjoy working at eLynx, and I appreciate the time they took to provide their candid feedback. This energizes me to make our company even stronger.”

****The Top Workplace program is sponsored by the Cincinnati Enquirer and is administered annually by an independent company each spring. According to the Enquirer, a majority of the employees in each company must participate in the survey for a company to be considered. This year, 127 companies qualified for consideration.

Understanding The News: Is Ellie Mae Preparing For Another Acquisition?

*Is Ellie Mae Preparing For Another Acquisition?*
**Selling Shares**

***Ellie Mae intends to offer, subject to market and other conditions, 3,000,000 shares of its common stock. In addition, Ellie Mae expects to grant the underwriters a 30-day option to purchase an additional 465,245 shares of common stock to cover over-allotments, if any. Certain of Ellie Mae’s directors and executive officers also intend to offer 101,638 shares of common stock. Ellie Mae intends to use the net proceeds from this offering for working capital and general corporate purposes, which may include the acquisition of, or investment in, technologies, solutions or businesses that complement the company’s business.

****Ellie Mae will not receive any proceeds from the sale of common stock by the selling stockholders. William Blair & Company, L.L.C. and JMP Securities LLC are acting as joint book-running managers of the offering. Needham & Company, LLC, Oppenheimer & Co. Inc., D.A. Davidson & Co. and Wunderlich Securities, Inc. are acting as co-managers of the offering.

****Ellie Mae has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and the applicable prospectus supplement and other documents Ellie Mae has filed or will file with the SEC for more complete information about Ellie Mae and the offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov.

****Alternatively, a copy of the prospectus may be obtained from the offices of William Blair & Company at 222 West Adams Street, Chicago, IL 60606; Attention: Prospectus Department or by email at prospectus@williamblair.com or by phone at (800) 621-0687 or JMP Securities LLC at 600 Montgomery Street, Suite 1100, San Francisco, CA 94111 or by email at ccornell@jmpsecurities.com or by phone at (415) 835-8985.

Understanding The News: How Long Does It Take To Close A Loan?

*How Long Does It Take To Close A Loan?*
**New Research Sheds Light on Cycle Times**

***Ellie Mae released its Origination Insight Report for May 2012. The report draws its data and insights from a sampling of the significant volume of loan applications—more than 20% of all originations in the United States—that flow through Ellie Mae’s Encompass360 mortgage management software and Ellie Mae Network. Here’s the scoop on cycle times, volume, and much more:

****“In May, the average loan-to-value (LTV) for closed loans broke the 80% mark for the first time since our tracking began in August 2011,” said Jonathan Corr, chief operating officer of Ellie Mae. “The increase appeared to be driven by an easing of LTVs on conventional refinances (the average LTV was 72% in May compared to 69% in April). Last month, closed conventional refinances with LTVs of 95%-plus jumped to 11%, up from 7.1% in April and 3.6% in March, which may be a sign that HARP 2.0 is helping more borrowers.”

****To get a meaningful view of lender “pull-through,” Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (i.e., the February applications) to calculate a closing rate for May. Ellie Mae found that 47.2% of all applications closed in May compared to 48.1% in April (see full report).

****“As you’d expect in the Spring sales season, the percentage of purchase loans increased to 46%, their highest level of the year,” noted Corr. “Credit scores for closed loans decreased slightly to 744 in May, with the biggest drop in FHA refinances, where the average credit score declined to 713 in May from April’s average of 720.

****“The combination of record-low interest rates, flexible HARP 2.0 refinances and a growing perception that housing prices finally may have bottomed are all creating increased demand—and slightly longer waits—for mortgages,” said Corr. “In May, the average loan closed in 46 days, one day longer than in April; and the average refinance also took one day longer, or 48 days, to close.”

Understanding The News: Success Stories Still Exist

*Success Stories Still Exist*
**Vendor Serves A Unique Need**

***We are all used to bad news, but some providers have good news to share, as well. For example, Orion Financial Group, a provider of mortgage assignment, lien release and document retrieval services, announces a 29.4 percent year-over-year increase in the number of transactions performed for lenders, servicers and investors. Orion attributes the growth to its ability to quickly and accurately provide document services, as well as to greater demand for those services by mortgage servicers, credit unions, and lenders as delinquency and foreclosure levels remain elevated.

****“The business of properly creating, recording and tracking mortgage documents has become increasingly important as the mortgage market continues to experience delinquencies and foreclosures well above historical ranges,” said Mike Wileman, president and chief executive officer of Orion. Problems with documentation often become apparent when a loan goes through a modification or foreclosure process, Wileman explained. “That’s when insufficient or improperly prepared documents, such as missing loan assignments, and unrecorded mortgages and title policies, typically become evident,” he said.

****Finding and correcting missing or inaccurate documentation can stall foreclosures, and delay or prohibit lenders from selling off loans to a third party. Investors also need to be vigilant with regard to documentation issues when they make loan purchases, Wileman said. “Missing mortgage documentation, such as proof of clear title to the property, can make it very difficult for loan investors to buy and sell mortgages,” he said.

****With mortgage delinquency rates and foreclosure levels expected to remain relatively high, Wileman anticipates that Orion will see continued growth in transactions for the foreseeable future.

****“The industry now realizes that accurate documentation needs to be a priority. Too often in the past, it was an afterthought. We are now repairing those items that were neglected previously, and going forward, we are proactively addressing potential issues with documents, as opposed to reacting after problems arise,” Wileman said.

****Orion distinguishes itself from other document services providers with its technology used to perform vital services such as tracking title chains, and securing lien releases and title assignments. Through its proprietary technology management system, DocPro, Orion creates documents at a rate 50 to 75 percent faster than the industry average, empowering its clients to handle significant document recording volume.

****“Orion has a proven capability to provide very necessary services in today’s market, such as cleaning up chain of titles and preparing and recording documents,” Wileman said. “Lenders and investors recognize that they must address issues associated with documentation sooner rather than later to protect their investments and to create an improved return on investment (ROI),” Wileman said.

****By ensuring that lender and investor documents are in order, Orion also helps its clients meet compliance requirements and avoid costly litigation, he added.

Understanding The News: Blurring The Lines Between Technology And Manual Processes

*Blurring The Lines Between Technology And Manual Processes*
**Improving The Appraisal Space**

***As the process becomes more automated, manual processes are blurring and being replaced. For example, InHouse, a provider of appraisal technology for banks, lenders, credit unions and other mortgage originators, is adding to its nationwide network of appraisers with an active recruiting and interviewing campaign. The effort is part of an ongoing program to meet the unprecedented demand among lender clients in response to the InHouse Connexions appraisal management platform’s “Build Your Own Appraisal Solution” approach. InHouse offers a wide range of options for lenders of all sizes to customize their appraisal programs to be self-managed, fully outsourced, or a combination of both — and growing demand for this kind of flexibility has translated into the doubling of InHouse’s revenues year after year since 2009.

****InHouse CEO and President Jennifer Creech notes that the company is also working to meet increasing lender preferences for appraisers to be certified in addition to standard licensing requirements. “We view our relationships with our appraisers as true partnerships, and do everything we can to support them. I believe this ultimately carries over into superior service provided to the lender,” Creech says. As a result, InHouse is actively encouraging its panel appraisers to become certified. She adds that the vast majority of their staff appraisers are presently certified, citing the company’s commitment to continuing education.

****The concept of lenders building their own appraisal solutions is gaining popularity with surprising speed, Creech observes. “A top-five bank recently pulled back from using appraisal management companies (AMCs) in order to gain more control of its appraisal effort,” she says. “While that means more control, it also can mean a lot more people and fixed costs. InHouse Connexions offers levels of flexibility and control that match those of the largest lenders, but without the prohibitive costs, thanks to the menu of options available with the technology.”

****Creech says the Connexions platform allows lenders to easily create and manage national panels of appraisers or combine with using their favorite AMCs with complete flexibility, quality reviews, and extensive tracking capabilities. At the same time, InHouse’s own AMC capability can be utilized when needed to supplement the effort, along with full ordering and receipt automation, borrower payment collection, appraiser compensation and any of the otherwise time-consuming, worker-intensive tasks. Lenders can submit directly to the UCDP (Freddie Mac and Fannie Mae’s Uniform Collateral Data Portal) and clear required edits, manage investor “do not use” lists, and set up queues for underwriter reviews of reports as desired.

****“The response to InHouse Connexions has been extraordinary and has necessitated an expansion of our appraiser qualification efforts to meet the demand,” Creech says. “So we’re looking for highly qualified appraisal associates to become part of the InHouse nationwide network. Our technology platform allows us to invest in top professionals rather than in back office staff, which results in better service and unparalleled flexibility for our clients,” she says. “By customizing to meet their unique situations, lenders can take back control of the appraisal process, improve results and reduce fixed costs, all at the same time.”

Understanding The News: Research Shows Declines In Shadow Inventory

*Research Shows Declines In Shadow Inventory*
**CoreLogic Report Offers Good News**

***According to research by CoreLogic the current residential shadow inventory as of April 2012 fell to 1.5 million units, representing a supply of four months. This was a 14.8 percent drop from April 2011, when shadow inventory stood at 1.8 million units, or a six-months’ supply, which is approximately the same level as the country was experiencing in October 2008. Currently, the flow of new seriously delinquent (90 days or more) loans into the shadow inventory has been approximately offset by the equal volume of distressed (short and real estate owned) sales.

****CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of distressed properties that are seriously delinquent, in foreclosure and held as real estate owned (REO) by mortgage servicers but not currently listed on multiple listing services (MLSs). Transition rates of “delinquency to foreclosure” and “foreclosure to REO” are used to identify the currently distressed non-listed properties most likely to become REO properties. Properties that are not yet delinquent but may become delinquent in the future are not included in the estimate of the current shadow inventory. Shadow inventory is typically not included in the official metrics of unsold inventory.

****“Since peaking at 2.1 million units in January 2010, the shadow inventory has fallen by 28 percent. The decline in the shadow inventory is a positive development because it removes some of the downward pressure on house prices,” said Mark Fleming, chief economist for CoreLogic. “This is one of the reasons why some markets that were formerly identified as deeply distressed, like Arizona, California and Nevada, are now experiencing price increases.”

****Other Data Highlights Include:

****>> As of April 2012, shadow inventory fell to 1.5 million units, or four-month’ supply and represented just over half of the 2.8 million properties currently seriously delinquent, in foreclosure or REO.

****>> The four-month supply of shadow inventory is at its lowest level in nearly three years. It parallels the unsold months’ supply of non-distressed active listings that hit a more than five-year low in April, falling to a 6.5-months’ from a 9.1-months’ supply just a year ago.

****>> Of the 1.5 million properties currently in the shadow inventory, 720,000 units are seriously delinquent (two months’ supply), 410,000 are in some stage of foreclosure (1.1-months’ supply) and 390,000 are already in REO (1.1-months’ supply).

****>> The dollar volume of shadow inventory was $246 billion as of April 2012, down from $270 billion a year ago and a three-year low.

****>> Serious delinquencies, which are the main driver of the shadow inventory, declined the most in Arizona (-37.0 percent), California (-28.0 percent), Nevada (-27.4 percent), Michigan (-23.7 percent) and Minnesota (-18.1 percent).

Understanding The News: PPE Gets SSAE-16 Certification

*PPE Gets SSAE-16 Certification*
**Vendor Ensures Security**

***PROGRESS in Lending has learned that LoanSifter, a provider of product eligibility and pricing solutions for the mortgage banking industry, has successfully completed a rigorous SSAE-16 Type II SOC 1 (Service Organization Controls Report) examination in accordance with the latest reporting standards put forth by the American Institute of Certified Public Accountants (AICPA). The achievement gives lenders, banks and credit unions assurance that their data is being protected by one of the toughest standards that exist in the financial services industry.

****The Statement on Standards for Attestation Engagements No. 16 (SSAE-16) standard is used to assess a company’s internal controls for data protection. Tampa, Florida-based BrightLine CPAs & Associates, Inc. independently conducted LoanSifter’s SSAE-16 examination for the period of September 1, 2011 through March 15, 2012.

****“The nature of the financial industry requires reliable partners with a proven history and a commitment to excellence, so ensuring the security of client data has always been of utmost importance to LoanSifter,” said LoanSifter President Bruce Backer. “The results of the SSAE-16 Type II examination validate the stringent controls and safeguards employed by LoanSifter to ensure the integrity of our data and processes across our platform. At a time when trust is at a premium in the mortgage industry, our users can have confidence that their data – and their borrower’s data – is safe with us.”

****A Type II examination – the type that LoanSifter received – determines whether a company’s policies and procedures were effective during the examination period. It is more demanding than a Type I examination, which only involves the examiner’s opinion on a company’s controls.

****LoanSifter received an unqualified report on the criteria described in its assertion statement, with no exceptions for any tested controls, demonstrating the company’s commitment to the highest standards of operational excellence for its SaaS-based mortgage platform.

Understanding The News: Vendor Seeks To Break Your Compliance Shackles

*Vendor Seeks To Break Your Compliance Shackles*
**CSi Launches Compliance Resource Center**

***The average mortgage lender is burdened with new rules and regulations all too often. To make life easier for today’s lenders, Compliance Systems Inc. has launched a new website and Compliance Resource Center, or Compliance RC. The Compliance RC is designed to be a source for compliance information, providing the mortgage industry with facts and critical insights on the compliance issues that have the potential to impact your business. Here’s the details:

****CSi’s new website, new branding, and the Compliance RC exemplify the company’s focus on compliantly documenting the financial transactions while mitigating the risk surrounding transactions to reduce resource expenditures, so that the lender can focus on their business and their bottom line.

****“What’s critical is that CSi realized that we are providing value, but we’re not necessarily understood in the market,” pointed out Reid Smeda, Sr., president at CSi. “What CSi offers is so much more than just the docs. CSi is not just a document provider. So, because we have such insight, we are now opening that up and exposing that to the industry through this new offering. The lender can come back to the Compliance Resource Center daily, weekly, monthly, whatever and see what’s new when it comes to new rules and regulations.

****In terms of who in your organization should take advantage of this, advised Mr. Smeda, “For smaller lenders maybe there is a compliance person that should visit the resource center. For larger lenders maybe there is an entire staff. As we see it, the compliance person will visit this resource all the time. But for a CEO, you need to have a pulse of this, too. Is the CEO going to go here daily? Probably not, but the CEO is concerned about risk mitigation.”

****CSi’s compliance professionals are constantly on alert for changes from a variety of sources, including legislation, case law, administrative rules, regulations, and other governing authorities to help mitigate risk surrounding the transactions between you and your customers.

****You can check out the new branding and the Compliance RC at http://www.compliancesystems.com.