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:

Home Prices Increase

*Home Prices Increase*
**New Data Is Released**

***CoreLogic released its June Home Price Index report, which said that home prices nationwide, including distressed sales, increased on a year-over-year basis by 2.5 percent in June 2012 compared to June 2011. On a month-over-month basis, including distressed sales, home prices increased by 1.3 percent in June 2012 compared to May 2012. The June 2012 figures mark the fourth consecutive increase in home prices nationally on both a year-over-year and month-over-month basis.

****Excluding distressed sales, home prices nationwide increased on a year-over-year basis by 3.2 percent in June 2012 compared to June 2011. On a month-over-month basis excluding distressed sales, home prices increased 2.0 percent in June 2012 compared to May 2012, the fifth consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions.

****The CoreLogic Pending HPI indicates that July home prices, including distressed sales, will rise by at least 0.4 percent on a month-over-month basis from June 2012 and by 2.0 percent on a year-over-year basis from July 2011. Excluding distressed sales, July house prices are also poised to rise by 1.4 percent month-over-month from June 2012 and by 4.3 percent year-over-year from July 2011. The CoreLogic Pending HPI is a new and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes in the most recent month.

****“Home prices are responding positively to reductions in both visible and shadow inventory over the past year,” said Mark Fleming, chief economist for CoreLogic. “This trend is a bright spot because the decline in shadow inventory translates to fewer distressed sales, which helps sustain price appreciation.”

****“At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner,” said Anand Nallathambi, president and CEO of CoreLogic. “While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012.”

Ellie Mae Reports Strong Revenue Gains

*Ellie Mae Reports Strong Revenue Gains*
**LOS IPO Succeeds So Far**

***Who said an LOS couldn’t go public and make it a success? Well, they were wrong, at least so far anyway. Today origination vendor Ellie Mae reported results for the second quarter and six months ended June 30, 2012. Total revenue for the second quarter of 2012 increased 106% to $23.6 million, compared to $11.5 million in the second quarter of 2011. Net income for the second quarter of 2012 was $5.0 million, or $0.21 per diluted share, compared to a net loss of $(40) thousand, or $(0.00) per diluted share, in the second quarter of 2011.

****On a non-GAAP basis, adjusted net income for the second quarter of 2012 was $6.3 million, or $0.27 per diluted share, compared to $0.5 million, or $0.02 per diluted share, in the second quarter of 2011.  Adjusted EBITDA for the second quarter of 2012 was $7.3 million, compared to $0.9 million for the second quarter of 2011.

****Total revenue for the six months ended June 30, 2012 increased 102% to $44.5 million compared to $22.1 million for the six months ended June 30, 2011.  Net income for the six months ended June 30, 2012 was $8.6 million, or $0.38 per diluted share, compared to a net loss of $(0.8) million, or $(0.08) per diluted share, for the six months ended June 30, 2011.

****On a non-GAAP basis, adjusted net income for the six months ended June 30, 2012 was $10.9 million, or $0.47 per diluted share, compared to $0.1 million, or $0.01 per diluted share, for the six months ended June 30, 2011.  Adjusted EBITDA for the six months ended June 30, 2012 was $12.7 million, compared to adjusted EBITDA of $0.9 million for the six months ended June 30, 2011.

****A reconciliation of the non-GAAP financial measures to their related GAAP financial measures is set forth below.

****Key Operating Metrics as of and for the quarter ended June 30, 2012:

****>> On-demand revenue increased 112% year over year to $20.4 million, comprising approximately 87% of total revenues for the quarter;

****>> The total number of users, both lender and broker, actively using the company’s Encompassenterprise solution (“active Encompass users”) increased 23% year over year to 62,487;

****>> Revenue per active Encompass user increased 69% year over year to $384;

****>> As of the end of the second quarter, the number of users of the SaaS version of Encompass increased 73% year over year to 32,114, or 51% of all active Encompass users;

****>> Total SaaS Encompass revenues increased 191% year over year to $10.7 million or 45% of total revenue for the quarter.

Foreclosures May Just Rise Again

*Foreclosures May Rise Again*
**New Data Looks Ahead**

***CoreLogic released its National Foreclosure Report for June, which provides monthly data on completed foreclosures and the overall foreclosure inventory. According to the report, there were 60,000 completed foreclosures in the U.S. in June 2012 compared to 80,000 in June 2011 and 60,000 in May 2012. Since the financial crisis began in September 2008, there have been approximately 3.7 million completed foreclosures across the country. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure.

****Approximately 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the national foreclosure inventory as of June 2012 compared to 1.5 million, or 3.5 percent, in June 2011. Month-over-month, the national foreclosure inventory was unchanged from May 2012 to June 2012.  The foreclosure inventory is the share of all mortgaged homes in some stage of the foreclosure process.

****“While completed foreclosures and real-estate owned (REO) sales virtually offset each other over the past four months, producing static levels of foreclosure inventory for most of this year,  they are beginning to diverge again,” said Mark Fleming, chief economist for CoreLogic. “Over the last two months REO sales declined while completed foreclosures leveled out. So we could see foreclosure inventory rising going forward.”

****“The decline in the flow of completed foreclosures to pre-financial crisis levels is more welcome news pointing to an emerging housing market recovery,” said Anand Nallathambi, president and CEO of CoreLogic. “However, we believe even more can be done to reduce the inventory of foreclosures by decreasing the level of regulatory uncertainty and expanding alternatives to foreclosure.”

****Highlights as of June 2012:

****>> The five states with the highest number of completed foreclosures for the 12 months ending in June 2012 were: California (125,000), Florida (91,000), Michigan (58,000), Texas (56,000) and Georgia (55,000). These five states account for 48.4 percent of all completed foreclosures nationally.

****>> The five states with the lowest number of completed foreclosures for the 12 months ending in June 2012 were: South Dakota (39), District of Columbia (81), Hawaii (449), North Dakota (565), and Maine (625).

****>> The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (11.5 percent), New Jersey (6.5 percent), New York (5.1 percent), Illinois (5.0 percent) and Nevada (4.8 percent).

****>> The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.6 percent), Alaska (0.8 percent), North Dakota (0.8 percent), Nebraska (0.9 percent) and South Dakota (1.2 percent).

Default Management Services That Comply With Military Rules

*Default Management Services That Comply With Military Rules*
**New Plug-In Emerges**

***PROGRESS in Lending has learned that Quandis, Inc., a provider of default management technology solutions, has released a plug-in tool that allows default servicing law firms to adhere to the Servicemembers Civil Relief Act (SCRA). The plug-in was designed specifically for law firms that do not have the necessary IT resources to configure Quandis’ military search platform to interface with their internal legal applications.

****“Earlier this year, we integrated our military search service with one of the leading legal case management systems (CMS) in default servicing space, KMCIS’ CaseAware solution, to seamlessly populate our search results into their CMS,” said Scott Stoddard, CEO of Quandis. “However, not all law firms currently have the IT staff and time needed to configure the data fields on their end, yet they have a burning need to ensure they comply with the SCRA. This plug-in enables them to immediately take advantage of our service with zero IT resources until they have the time to map the fields in their CMS to achieve a fully integrated solution. In short, it’s a very effective alternative to circumvent waiting for an integration to be completed; and, it’s very quick to implement.”

****The new SCRA solution works by adding Quandis’ plug-in to the user’s Microsoft Excel application. The searching is conducted within the spreadsheet by invoking the Quandis’ military search API to scrub for active duty military personnel. Active borrowers identified are instantly returned back into Excel to alert the user to halt foreclosure proceedings. If the plug-in had not been built, law firms would be forced to perform the searches manually on the Department of Defense’s website.

****Notable is that in 2011 Quandis officially released its military service as a standalone application for use by servicers and foreclosure attorneys. Quandis then took the solution a step further by integrating it with one of the industry’s leading CMSs. Now, Quandis has developed an Excel plug-in to provide clients with as many options as possible to take advantage of its military search service and adhere to the SCRA.

****Failure to comply with the Servicemembers Civil Relief Act sets the stage for steep fines, lawsuits and the potential to rescind foreclosure transactions.

Technology Vendors Do Care

*Technology Vendors Do Care*
**Helping The Community**

***Times are tough. Technology vendors are hurting, too. As a result, we see a lot of acquisitions and overall contraction. And yes, technology vendors have to sell, which can get them a bad name in some cases. Nobody likes to be sold. However, that doesn’t mean that technology vendors don’t have a heart. Here’s what I mean:

****First, back in May, over 400 citizen supporters, business and community leaders, and friends and alumni gathered for City Year San Jose/Silicon Valley’s annual Starry Starry Night benefit gala to celebrate a dedicated group of individuals who serve in the community’s schools. This year’s event commemorated the City Year San Jose/Silicon Valley site’s 18th year of service, and honored the contributions of Dr. Aart de Geus, Chairman and CEO of Synopsys Corporation.

****For the second consecutive year, eLynx proudly sponsored the group’s efforts as a Silver Sponsor. President and CEO of eLynx, Sharon Matthews, has been a long-time supporter of City Year and a member of the board for 7 years. “These young adults are doing transformative work for at-risk students in the community,” said Matthews. “We are very happy to support these growing leaders, who are coaching and inspiring young people to make positive choices and stay in school.”

****According to City Year, every 26 seconds a student in America drops out of school, resulting in 1.1 million drop-outs annually. These people cost their communities over $400,000 each over their lifetimes. To combat these statistics, City Year places young college-aged people in schools to serve as mentors and tutors for students struggling with their ’A, B, Cs’. The mentors focus on attendance, behavior and course issues in literacy and math to combat the nation’s high school drop-out crisis. In just the first 4 months of this school year, the San Jose team’s work has resulted in a 48 percent attendance improvement, 54 percent behavior improvement, 75 percent increase in students’ raw literary scores, and a 64% increase in student’s raw math scores. Additionally, corps members work with local businesses to rebuild and beautify schools and communities in need.

****“City Year enjoys partnering with organizations who understand corporate social responsibility,” said Beach Pace, Executive Director of City Year San Jose/Silicon Valley. “eLynx’s investment in City Year’s support of social change and academic achievement is fueling our member’s ability to positively transform the lives of at-risk students. It also is an investment in the leadership development of our City Year corps members – skills they can continue to use and share throughout their lives in any community.”

****“Great needs are being met by these motivated individuals,” said Matthews. “We are proud to sponsor this event and will continue to personally support this important organization going forward.”

****Also, the staff at Document Express, Inc. (DX), a provider of document preparation and compliance services for the mortgage industry, recently participated in a Relay For Life walk to support the fight against cancer. This is an event that is very near and dear to the staff at DX as past DX president, Paul Fosco, fought and survived a battle with cancer 9 years ago.

****“When it comes to fighting cancer, I’m incapable of expressing my feelings in words alone. In 2003, I was diagnosed with stage 3 nasal pharyngeal cancer,” said Paul Fosco. “That was 9 years ago, and due to great medical care and the endless support of my family and friends, all is well today.”

****Relay For Life is the largest cancer fundraiser in the world, raising over $4 Billion. Since 1996, The Society has collaborated with multiple cancer organizations in countries outside the U.S. to license and support Relay For Life programs. As a result, Relay For Life is now a global movement that generates cancer awareness, outreach, and income in 23 countries around the world. Relay For Life fundraising efforts have transcended reality, and gone virtual, too. Since 2007, American Cancer Society volunteers have planned, executed and hosted a full-scale Relay For Life experience in the virtual world, Second Life. Virtual Relay allows people who may not have been able to participate in other ways a chance to make a difference in the fight against cancer.

****“Relay For Life is a life-changing event that helps communities across the globe celebrate the lives of people who have survived cancer, remember lost loved ones, and fight back against the deadly disease,” said Paul Fosco. “I strongly urge each of you to participate in these life-saving events whenever the opportunity arises. Your generous contributions not only help those in need, but also their loved ones to overcome all that is associated with cancer.”

The Robustness Principal

*The Robustness Principal*
**By Elizabeth Green**

***We’ve been reading a lot about MISMO lately which is fantastic! Many of you know who MISMO is and some of you know what MISMO is, but, misconceptions in the industry persist. For instance, many people think that because UAD and ULDD are a part of the UMDP and both use MISMO that they are the same. They are not, but they are in the same family. What’s the difference? The chart below highlights a few key features in the progress of the evolution of MISMO:

****The key change in philosophy in MISMO 3 versus the previous generation 2 is that the former is a collection of standalone data formats defined for very specific purposes. I like to describe the MISMO version 3 series as the all-encompassing mortgage dictionary. Any number of new and existing business requirements for exchanging data can be supported.

****All data is not equal in in terms of depth, accuracy, freshness, reliability and accessibility. And of course, it is always subject to interpretation. To comprehend the meaning of data and to harness the power of information, we need a common vocabulary. This is where MISMO comes in. Think of MISMO 3.2 as a central reference from which information exchange messages as well as new valuation services and products can be derived from. The process can be liberated from legacy methods that rely on proprietary formats and limited datasets.

****MISMO 3.2 reconciles all the original MISMO version 2 individual formats (flood, title, loan application, aus, etc.) into a single, holistic reference model as well as expands the full dataset to accommodate various new regulatory requirements such as SAFE Act, the new GFEs and hundreds of new and improved data points. And, while the version 2 formats remain available for use, they are no longer actively maintained by MISMO. But, if you need to exchange data in a particular format, say, for UCDP submission, the message can be produced from the larger, MISMO 3.2 reference model. It is not an either/or proposition, although this fact is not well understood in the industry.

****By way of background, the UAD provides specific data requirements for the GSE appraisal forms and requires the data to be provided in a proprietary format which was premised on MISMO Valuation Response 2.6. The format used for UAD, 2.6GSE, is only available from Fannie Mae and Freddie Mac.

****The phrase “be conservative in what you send and liberal in what you accept” is known as the Robustness Principal or Postel’s law. In other words, code that sends commands or data to other machines (or to other programs on the same machine) should conform completely to the specifications, but code that receives input should accept non-conformant input as long as the meaning is clear. MISMO version 3 series provides that clarity through a single data definition source.

****The MISMO v3.2 Reference Model is a significant next step forward in the evolution of the MISMO Reference Model.  It represents all of the information introduced in versions 3.0 and 3.1 along with improved features and hundreds of new definitions.

****Data has always been the foundational element of mortgage origination, settlement and servicing processes.  Technology has made access easy and sources plentiful. The post-crisis mortgage industry is faced with expanding regulatory requirements and a broad call for transparency. To meet these challenges, we must be able to continually apply better detailed information and credible data sourcing an ongoing and increasing basis. When industry participants embrace the concept of using a data reference such as MISMO 3.2 as a means of providing a common source for data translation and business definitions, they can escape the limitations on data boundaries often imposed by legacy systems.

Elizabeth Green, Principal Consultant, rel-e-vant Solutions, is a strategist, solutions architect, speaker and valuation advocate. A recognized mortgage technology veteran in software product leadership for solutions in residential property valuation, loan origination, mortgage servicing and secondary marketing, Green is helping to foster a new level of understanding in property valuation and collateral risk assessment through the application of digital intelligence. She is the third term chairperson of the MISMO Property & Valuation Services Workgroup. Liz can be reached at Liz@relevant.com , follow her on Twitter @FreshRelevance.

Selecting A New Technology Approach

*Selecting A Fresh Approach*
**A New Look At MLS Technology**

***CoreLogic has signed a multiyear agreement to provide multiple listing service (MLS) solutions to the Austin Board of REALTORS (ABoR), which serves nearly 9,000 members through its subsidiary, the Austin/Central Texas Realty Information Service (ACTRIS). ABoR has selected the Matrix Platform from CoreLogic to augment its current Fusion/MLXchange MLS system from CoreLogic. In addition, ABoR will continue to provide members with a variety of other MLS solutions from CoreLogic, including Realist, MLS Data Checker, MLS Data Co-op, Transaction/Document Manager and Stats Pro.

****“CoreLogic offers a wealth of options not available from other MLS providers,” said ABoR CEO Matt Maire. “Matrix provides the speed and mobile accessibility that many of our members are looking for. By offering Matrix alongside our existing MLS system, we can expand our menu of services and empower our members to differentiate themselves in a competitive market.”

****Matrix is an enterprise-class MLS system that provides real estate brokers and agents with a flexible, high-performance platform for managing real estate listings. Austin is the ninth new Matrix customer since CoreLogic added Matrix to its suite of MLS solutions in September 2011. 25 MLSs representing approximately 200,000 real estate professionals are now under contract to use Matrix. In total, CoreLogic serves approximately 575,000 real estate professionals with its MLS systems—more than half of the North American market.

****Ben Graboske, senior vice president of Real Estate and Financial Services, Data and Analytics Segment for CoreLogic noted, “Matrix continues to gain momentum in premier markets like Austin where maximum performance is especially critical. By combining Matrix’s iPad-friendly HTML interface and sub-second response times with the vast data resources of CoreLogic, we are creating a new class of MLS system unlike anything else on the market today.”

Understanding The News: Putting Dodd-Frank Under A Microscope

*Putting Dodd-Frank Under A Microscope*
**The Truth About This Reform**

***How will Dodd-Frank truly impact the mortgage space? It’s an open question. Who really knows? Well, what we do know is the impact it has had already and it’s not too good. This act has added new layers of regulation that the industry in most cases has not welcomed. Now there is new research that provides some hard facts about how ineffective Dodd-Frank has really been. Here’s the scoop:

****In their Compliance Resource Center CSi expects report that they predict further regulatory development of the Dodd-Frank Act, but a recent review by Davis Polk finds that a large portion of the expected regulation has been delayed.

****63 Percent of Dodd-Frank Deadlines Missed

****Some 140 of 221 (63 percent) of Dodd-Frank Act rulemaking deadlines, as of July 2, have been missed, and 81 (37 percent) have been met with finalized rules, according to the Davis Polk Dodd-Frank Progress Report released Tuesday.

****The report notes that the 221 rulemaking deadlines that have passed represent 55.5 percent of the 398 total DFA rulemaking requirements, and 78.9 percent of the 280 DFA rulemaking requirements with specified deadlines. Davis Polk & Wardwell is a New York-based international law firm.

****You can read the full report HERE.

Understanding The News: Update On Ellie Mae Stock Offering

*Update On Ellie Mae Stock Offering*
**Final Numbers Disclosed**

***PROGRESS reported that Ellie Mae is selling more stock. Now we have more details. Ellie Mae announced the closing of its previously announced follow-on public offering of 3,101,638 shares of its common stock at a public offering price of $17.00 per share as well as the exercise in full by the underwriters of their option to purchase 465,245 shares of common stock to cover over-allotments. Here’s the story:

****As a result, the total offering size is 3,566,883 shares, which consists of 3,465,245 shares sold by Ellie Mae and 101,638 shares sold by certain of its directors and executive officers. Ellie Mae received aggregate net proceeds of approximately $55.7 million, after deducting the underwriting discounts and commissions and estimated offering expenses payable by the company. 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 acted as joint book-running managers of the offering. Needham & Company, LLC, Oppenheimer & Co. Inc., D.A. Davidson & Co. and Wunderlich Securities, Inc. acted as co-managers of the offering.

****Ellie Mae has filed a registration statement (including a base prospectus and prospectus supplement) with the SEC for the offering to which this communication relates. You may get these documents for free by visiting EDGAR on the SEC website at http://www.sec.gov. Copies of the final prospectus may also 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: Controlling The Raging Delinquency Flames

*Controlling The Raging Delinquency Flames*
**New Data Emerges**

***Severely delinquent balances among first mortgages are on the decline according to Equifax’s May National Consumer Credit Trends Report. While still elevated relative to historic levels, the May 2012 total of $450 billion in delinquent balances represents a 37% decline from the peak of more than $700 billion in January 2010.  Of note is that 70% of outstanding delinquencies among first mortgages still remain tied to loans opened between 2005-2007.

****The greatest level of change was seen among severely delinquent non-agency first mortgage loans (90+ days past due or in foreclosure), which fell 45% to $320 billion in May 2012 from its peak of $580 billion in January 2010. By comparison, agency-sourced (Fannie Mae, Freddie Mac, FHA and VA) first mortgages reported as severely delinquent declined just 9% to $130 billion in May 2012 after peaking at $142 billion in January 2010. Similar reductions in severely delinquent totals were seen among home equity installment loans, which declined 31% from their peak in February 2011 ($880 million) to May 2012 ($615 million).

****“That severe mortgage delinquencies are trending downward is not surprising given generally improving economic conditions,” said Equifax Chief Economist Amy Crews Cutts.  “What is surprising is that even with the foreclosure moratoriums and the slow resolution of foreclosure backlogs, the downward trend has been a steady, consistent drumbeat of recovery,”. “If this pace continues, we expect the volume of severely delinquent mortgage balances to return to mid-2007 levels by the end of 2014.”

****Other highlights from the most recent data include:

****Home Mortgage Finance:

****>> Home equity revolving balances fell 18% from their peak of $680 billion in May 2009 to $560 billion in May 2012.

****>> Total credit limits among home equity revolving accounts have declined 27% to $1.02 trillion in May 2012 since their peak in March 2008 ($1.30 trillion).

****>> Year-to-date total mortgage write-offs through May 2012 are down 28% from their 2010 peak. Home mortgage balances are down 12.5% in May 2012 from their record-high of $9.8 trillion set in Oct. 2008. Total mortgage debt outstanding now sits at $8.6 trillion.