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: Who Says That Technology Doesn’t Pay Off?

*Who Says That Technology Doesn’t Pay Off?*
**Website Gets Major Kudos**

***Arguably the biggest problem that the mortgage industry faces is the foreclosure crisis. There has to be a better, faster, easier way to workout troubled loans and foreclose on loans that can’t be worked out. That’s where technology can play a role and it has. The National Mortgage Settlement (Settlement) announced last week and filed in federal district court by the Department of Justice, the 49 state attorneys general, and the five largest mortgage servicers, mentions Hope LoanPort (HLP) as a model for a neutral, national Web-based portal to facilitate compliance with the Settlement. HLP is a non-profit 501(c)(3) based in Washington, D.C. Here’s the scoop on why this matters:

****The landmark Settlement requires, among other new servicing standards, that the five mortgage servicers develop a portal that allows homeowners to submit and check the status of their foreclosure-alternative applications. The Settlement also mandates that other stakeholders, specifically, housing counselors who are working with homeowners, shall have access to a similar portal to be used to submit applications and to communicate with mortgage servicers. HLP was mentioned as a model portal in each of the separate consent orders filed in district court.

****Since its creation in 2009, HLP has been the prototype for a collaborative, multi-party, Web-based transactional platform focused on foreclosure prevention. Its mission is to provide transparent, efficient and traceable access to foreclosure-alternative options while ensuring homeowner information is securely and confidentially shared among key stakeholders such as housing counselors, mortgage servicers and homeowners. This efficiency helps everyone make informed, meaningful, and timely decisions that ultimately better serve homeowners at risk of, or in, financial distress.

****HLP has successfully worked with the housing counseling community and the mortgage servicing industry to agree upon a standard set of data and document requirements that allow consumers to apply for foreclosure alternatives. HLP has relationships with 14 mortgage servicers, including the five mortgage servicers who agreed to the Settlement. These servicers manage over 80% of the mortgages serviced in the United States. HLP is also working with over 700 HUD-Approved/National Foreclosure Mitigation Counseling (NFMC) certified Housing Counseling Agencies with over 3,800 individual housing counselors in 50 states, Washington, D.C. and Puerto Rico.

****Camillo Melchiorre, President and CEO of HLP stated, “Hope LoanPort is proud to be mentioned in the National Mortgage Settlement and looks forward to working with the mortgage servicing industry, as well as the regulatory and housing counseling communities to better address the needs of homeowners.”

****You see, technology can make a big difference.

Progress In Lending

The Place For Thought Leaders And Visionaries

Understanding The News: More Process Automation

*More Process Automation*
**Seamless MI Integration**

***Mortgage Guaranty Insurance Corp. (MGIC), the nation’s largest private mortgage insurer, now has the availability of mortgage insurance rate quotes to lenders through the product and pricing engine piece of MarksmanLMP, from Mortech, Inc. The integration marks the first of a series of interfaces, with eligibility and MI-ordering forthcoming. Here’s the full story:

****MarksmanLMP’s mortgage insurance function is set up to automatically trigger when a loan scenario exceeds the 80% loan-to-value (LTV) threshold. The MISMO-based integration allows MarksmanLMP users to seamlessly check MGIC’s pricing without having to leave the platform. Lenders receive initial mortgage insurance rate quotes at the corporate and/or branch levels that can be dynamically adjusted according to specific loan scenarios. This fully automated two-way exchange of data provides mortgage lenders with a more efficient lending strategy, which enables a faster loan closing process and increased profitability.

****“Seamless access to MGIC’s competitive mortgage insurance rates through MarksmanLMP enables our customers to streamline their loan origination processes,” said Sal Miosi, Vice President of Marketing at MGIC. “MGIC’s partnership with Mortech is another example of our commitment to providing our customers with efficient technology.”

****“Automating more of the process of originating a loan is critical to making the loan officer of the future more efficient and effective, for both the mortgage company and the homeowner,” said Don Kracl, President of Mortech. “This is another step forward for the industry and one less thing loan officers need to worry about as they go about the business of serving American borrowers.”

Progress In Lending

The Place For Thought Leaders And Visionaries

Understanding The News: HARP Is For Everyone

*HARP 2.0 Is For Everyone*
**Help For Smaller Banks**

***PROGRESS in Lending has learned that String Real Estate Information Services, a consultancy and back-office service provider to the U.S. home finance industry, has added capacity in preparation to help smaller mortgage lenders capitalize on the government’s recently announced Home Affordable Refinance Program (HARP 2). As many as 6 million homeowners may qualify to refinance existing mortgages under the program but experts say smaller institutions could benefit the most. Here’s the whole story:

****Research performed recently by FBR Capital Markets analysts predicts that the biggest beneficiaries of the HARP 2 program are likely to be smaller originators, if they are well positioned to pick up market share. Unfortunately, these smaller firms are the ones that are likely to need the most support to take on this additional volume.

****“Helping these originators find qualified borrowers, contact them with offers, underwrite and process their applications are exactly the types of tasks that our team has been built to handle easily,” said Prashant Kothari, chief executive officer for String Real Estate Information Services.”

****String has enjoyed phenomenal growth over the past 2 years and has been expanding into new markets and extending its footprint within the U.S. real estate industry. The company has been particularly successful in building capacity for title industry outsourcing. Kothari said String identified the HARP 2 opportunity last fall and has been working to build capacity since then. The company is taking on new clients for HARP 2 services now.

Progress In Lending

The Place For Thought Leaders And Visionaries

Understanding The News: New Research Shows Mixed Results

*New Research Shows Mixed Results*
**Some Good And Bad News**

***CoreLogic, a provider of information, analytics and business services, today released its January Home Price Index (HPI) report. The report shows national home prices, including distressed sales, declined on a year-over-year basis by 3.1 percent in January 2012 and by 1.0 percent compared to December 2011, the sixth consecutive monthly decline. Nonetheless, there is some good news, too. Here’s the full story:

****Excluding distressed sales, year-over-year prices declined by 0.9 percent in January 2012 compared to January 2011, but that same metric posted a month-over-month gain, rising 0.7 percent in January. Distressed sales include short sales and real estate owned (REO) transactions.

****“Although home price declines are slowly improving and not far from the bottom, home prices are down to nearly the same levels as 10 years ago,” said Mark Fleming, chief economist for CoreLogic.

****Highlights of the Market as of January 2012 include:

****>> Including distressed sales, the five states with the highest appreciation were:  South Dakota (+5.7 percent), North Dakota (+4.0 percent), West Virginia (+4.0 percent), Montana (+3.6 percent) and Michigan (+3.0 percent).

****>> Including distressed sales, the five states with the greatest depreciation were: Illinois (-8.7 percent), Nevada (-8.0 percent), Delaware (-7.9 percent), Alabama (-7.7 percent) and Georgia (-7.5 percent).

****>> Excluding distressed sales, the five states with the highest appreciation were: South Dakota (+6.4 percent), Montana (+5.9 percent), North Dakota (+3.8 percent), Alaska (+3.7 percent) and Indiana (+2.7 percent).

****>> Excluding distressed sales, the five states with the greatest depreciation were: Nevada (-6.7 percent), Delaware (-5.5 percent), Minnesota (-4.1 percent), New Jersey (-3.5 percent) and Georgia (-3.3 percent).

****>> Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to January 2012) was -34.0 percent.  Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -24.2 percent.

****>> The five states with the largest peak-to-current declines including distressed transactions are Nevada (-60.1 percent), Arizona (-50.8 percent), Florida (-49.0 percent), California (-43.6 percent) and Michigan (-43.2 percent). >> Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 71 are showing year-over-year declines in January, eight fewer than in December.

Progress In Lending

The Place For Thought Leaders And Visionaries

Understanding The News: A New Tool For LOs Emerges

*A New Tool For LOs Emerges*
**Fixing The Transparency Issue**

***PROGRESS in Lending has learned that Mortech, Inc., a mortgage technology software company specializing in solutions for mortgage bankers and secondary market teams, has released a new technology allowing loan officers the ability to exchange real-time mortgage application data directly with their borrowers. The secure consumer-facing portal, called Connect, is available completely free to users of Mortech’s MarksmanLMPplatform. The tool increases overall transparency. Here’s how:

****“Transparency and open communication are the keys to rebuilding trust with today’s homebuyer. And that’s exactly what the new Connect technology provides,” said Don Kracl, president of Mortech. “At the same time, originators are under pressure to expend fewer resources on every loan they close. The Connect platform makes that easy by opening up a communication line directly with the borrower and allowing them to provide more of the required information on their own.”

****Connect offers the following benefits in one tool without requiring originators to buy a new technology platform:

****>> Enhanced communication between consumers and lenders. Lender personally invites consumer to the Connect platform

****>> Eases the burdens for lenders associated with collecting 1003 loan application data from borrowers.

****>> Accelerates the application process for borrowers – full application inside Connect comes pre-populated with data already collected from any previous online short form applications.

****>> Allows lenders to access and exchange consumer data bi-directionally in LOS platform and other technologies (all data from 1003 app is stored inside MarksmanLMP).

****>> Provides borrowers with the ability to check mortgage rates for their specific lender.

****>> Gives consumers access to rate calculators: “How Much Can I Afford? Should I Refinance?” etc.

****>> Provides helpful information to consumers about the mortgage process.

****>> Creates new communication channels between lenders and Realtors for status updates.

****Connect is powered by TheMorty.com, also owned by Mortech and is seamlessly integrated into Mortech’s MarksmanLMP platform. Each originator portal is automatically branded for individual companies.

Progress In Lending

The Place For Thought Leaders And Visionaries

Understanding The News: Branching Out To Serve New Mortgage Entrants

*Branching Out To Serve New Mortgage Entrants*
**Credit Unions Need Automation, Too**

***The mortgage market is changing. New companies are entering and a lot of those new entrants are credit unions. However, these institutions are not mortgage experts. As such they need technology to help. To this end, PROGRESS in Lending has learned that ClosingCorp.’s SmartGFE Service is now available to credit unions. Here’s why this is significant:

****ClosingCorp’s SmartGFE Service will enable credit union lending units, whether direct or supported by a CUSO, to create instant, accurate RESPA-compliant GFEs with virtually no user interaction. The system delivers current rates for real estate closing services nationwide, as well as transfer taxes and recording fees.

****“In today’s regulatory environment, the delivery of accurate and timely GFEs is vital for credit unions, as well as all financial institutions involved in the lending process,” said Cathy Blaszyk, vice president of Lender Services for ClosingCorp. “Credit union membership is on the rise as consumers look for alternatives to large banks and are more aware of the support local credit unions can offer beyond just auto financing. Credit unions have experienced significant growth in mortgage originations since the start of the housing crisis and are uniquely positioned to capture increased market share.

****“By introducing the SmartGFE Service to the credit union industry, we are furthering our objective to help institutions increase productivity and avoid tolerance violations by guaranteeing RESPA compliance,” added Blaszyk. “Custom configuration features allow credit unions to instantly access the necessary data from specific service providers and generate highly accurate GFEs, drastically improving their lending operations and the level of service provided to their members.”

****The SmartGFE Service instantaneously generates accurate, geocoded rates for GFE Blocks 3-8 obtained from ClosingCorp’s national network of more than 10,000 real estate service providers, as well as the company’s proprietary recording fee and transfer tax database. The solution removes the need for loan officers to make decisions or manually input existing information found in a loan file.

Progress In Lending

The Place For Thought Leaders And Visionaries

Understanding The News: Measuring The Foreclosure Rate

*Measuring The Foreclosure Rate*
**2011 Saw Improvement**

***CoreLogic released its first national Foreclosure Report which provides monthly data on completed foreclosures, foreclosure inventory and 90+ delinquency rates. Completed foreclosures for all of 2011 totaled 830,000 compared with 1.1 million in 2010. In December 2011 there was a month-over-month decrease in completed foreclosures to 55,000 from 57,000 in November 2011. The December 2011 completed foreclosures figure was also down from one year ago when it stood at 67,000. From the start of the financial crisis in September 2008, there have been approximately 3.2 million completed foreclosures. Here’s what this means to the mortgage industry:

****The new data from CoreLogic also shows that nationally 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the foreclosure inventory as of December 2011. The foreclosure inventory is the stock of homes in the foreclosure process. A property moves into the foreclosure inventory when the mortgage servicer places the property into the foreclosure process after serious delinquency is reached and remains there until the foreclosure is completed. The foreclosure inventory is measured only against homes with an outstanding mortgage, rather than against all homes. Nationwide, roughly one-third of homeowners own their homes outright.

****Nationally, the number of loans in the foreclosure inventory decreased 8.4 percent in December 2011 compared to December 2010, a decline of 130,000 properties nationwide. The number of loans in the foreclosure inventory decreased by 5.3 percent in November 2011 compared to November 2010 as well.

****The share of borrowers nationally that were 90 days or more delinquent on their mortgage payments, classified as seriously delinquent, improved to 7.3 percent in December 2011 compared to 7.8 percent in December 2010.

****According to CoreLogic, servicers nationwide stepped up the rate at which they were able to process distressed assets––the distressed clearing ratio––in December 2011. The distressed clearing ratio is calculated by dividing the number of REO sales by completed foreclosures. The higher the ratio, the faster the REO inventory is clearing. The distressed clearing ratio was 1.03, up from 0.94 in November 2011.

****“The inventory of foreclosed properties has begun to shrink, and the pace at which properties are entering foreclosure is slowing. While foreclosure filings are being curtailed by a variety of judicial and regulatory constraints, mortgage servicers are completing REO sales faster than they are completing foreclosures,” said Mark Fleming, chief economist with CoreLogic. “This is the first time in a year that REO sales have outpaced completed foreclosures, and part of the reason for the decrease in the foreclosure inventory.”

****Highlights as of December 2011

****>> The percent of homeowners nationally who were more than 90 days late on their mortgage payment, including homes in foreclosure and REO, was 7.3 percent for December 2011 compared to 7.8 percent for December 2010, and 7.2 percent in November 2011.

****>> The five states with the highest foreclosure inventory were: Florida (11.9 percent), New Jersey (6.4 percent), Illinois (5.4 percent), Nevada (5.3 percent) and New York (4.6 percent).

****>> The five states with the lowest foreclosure inventory were: Wyoming (0.7 percent), Alaska (0.8 percent), North Dakota (0.8 percent), Nebraska (1.0 percent) and Washington (1.3 percent).

****>> Of the top 100 markets, measured by Core Based Statistical Areas (CBSAs) population, 34 are showing an increase in the foreclosure inventory in December 2011 compared to a year ago, an improvement from November 2011 when 46 of the top CBSAs were showing an increase in the foreclosure inventory compared to a year ago.

Progress In Lending

The Place For Thought Leaders And Visionaries

Understanding The News: Stretching Partnerships Even Further

*Stretching Partnerships Even Further*
**Alliances Tighten**

***The mortgage industry is very complex. As a result, more and more companies are looking to other companies to form synergies. For example, PROGRESS in Lending has learned that United Guaranty, a national mortgage insurance company, announced today an expansion of its strategic alliance with Optimal Blue, the award winning comprehensive, Web-based platform that couples pricing and secondary marketing automation with content management for the mortgage industry. Here’s the scoop:

****United Guaranty customers can receive United Guaranty MI rate quotes and pull MI rate history while searching for investor pricing and eligibility in Optimal Blue. Under the agreement, within Optimal Blue, United Guaranty automatically delivers a mortgage insurance quote for up to five products at a time along with locking capability to originators who have a master policy, and an MI premium estimate to lenders who have not established a relationship with United Guaranty.

****“This added functionality gives users mortgage insurance pricing and comparisons to FHA pricing—without leaving Optimal Blue,” said Chris Clement, SVP-Field Production at United Guaranty. “We’re leading the industry in the investments necessary to simplify processes for customers and help loan officers get borrowers in the right loan.”

****In today’s environment, lenders must leverage every advantage to respond to consumers quickly and accurately. Within the Optimal Blue platform, users now have access to United Guaranty’s Performance Premium risk-based MI pricing, enabling them to receive either an instant estimate or a detailed quote. Users can pull a PDF of the MI quote, and because each loan has an MI history, users can also go back at any time if the loan criteria change and a new quote is needed. Users also have the option to lock the detailed quote with UG at any time.

****“Optimal Blue has always prided itself on being able to deliver the most value to mortgage lenders,” explains Lawrence Huff, co-Founder and co-CEO of Optimal Blue. “This partnership exemplifies that philosophy – as it gives customers the ability to not just lock in an MI quote, but to stay within the Optimal Blue platform. We continue to advance our platform to create the most automated workflow, giving our customers accurate data quality, better control and compliance, and improved profitability.”

****“This exclusive partnership with Optimal Blue shows our commitment to provide MI accessibility in all scenarios. This lets originators get a rate quote quickly and easily, cutting the time required to know a loan’s cost,” said Clement. “Providing the MI quote during the eligibility stage lets users know in one location that they’ve met general MI requirements.”

Progress In Lending

The Place For Thought Leaders And Visionaries

Understanding The News: Home Prices Dip In December

*Housing Prices Dip In December*
**CoreLogic Data Tells The Story**

***CoreLogic released its December Home Price Index (HPI) report, giving the first look at full-year 2011 price changes. The CoreLogic HPI shows that including distressed sales home prices in the U.S. decreased 4.7 percent in 2011 (compared with one year prior). This year-end report shows that home prices continued the trend of year-end decreases—this is the fifth consecutive year with a decrease in the HPI. The HPI excluding distressed sales showed that home prices decreased by 0.9 percent in 2011, giving an indication of the impact of distressed sales on home prices in 2011. Here’s the findings:

****The report also shows that national home prices including distressed sales decreased 1.4 percent on a month-over-month basis, the fifth consecutive monthly decline. However, the HPI excluding distressed sales posted its first month-over-month gain since July 2011, rising 0.2 percent.

****The December drop in home prices follows a decline of 4.3 percent in November of 2011 as compared to one year prior. Excluding distressed sales, year-over-year prices declined by 2.0 percent in November 2011 compared to November 2010. Distressed sales include short sales and real estate owned (REO) transactions.

****“While overall prices declined by almost 5 percent in 2011, non-distressed prices showed only a small decrease. Until distressed sales in the market recede, we will see continued downward pressure on prices,” said Mark Fleming, chief economist for CoreLogic.

****Highlights as of December 2011

****Including distressed sales, the five states with the highest appreciation were:  Montana (+4.4 percent), Vermont (+4.0 percent), South Dakota (+3.1 percent), Nebraska (+2.5 percent) and New York (+1.7 percent).

****>> Including distressed sales, the five states with the greatest depreciation were: Illinois (-11.3 percent), Nevada (-10.6 percent), Georgia (-8.3 percent), Ohio (-7.7 percent), and Minnesota (-7.5 percent).

****>> Excluding distressed sales, the five states with the highest appreciation were: Montana (+7.7 percent), South Dakota (+3.5 percent), Indiana (+3.3 percent), Alaska (+3.1 percent), and Massachusetts (+2.9 percent).

****>> Excluding distressed sales, the five states with the greatest depreciation were: Nevada (-9.7 percent), Minnesota (-5.2 percent), Arizona (-4.9 percent), Delaware (-4.2 percent) and Michigan (-3.5 percent).

****>> Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to December 2011) was -33.7 percent.  Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -24.0 percent.

****>> The five states with the largest peak-to-current declines including distressed transactions are Nevada (-60.0 percent), Arizona (-51.9 percent), Florida (-50 percent), Michigan (-43.7 percent), and California (-43.5 percent).

****>> Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 81 are showing year-over-year declines in December, one more than in November.

****Full-month December 2011 national, state-level and top CBSA-level data can be found at http://www.corelogic.com/HPIDecember2011.

Progress In Lending

The Place For Thought Leaders And Visionaries

Understanding The News: Many Lenders Miss The Boat When It Comes To Quality Control

*Many Lenders Miss The Boat When It Comes To Quality Control*
**New Research Reveals Critical Flaws**

***The flight to quality is a big concern in the mortgage industry. Especially with all the increased scrutiny from investors and regulators, lenders have to do everything possible to originate quality loans. New data that PROGRESS in Lending got from Interthinx shows that existing quality control programs may not be going far enough. Interthinx has identified two major defects in the outsourced Quality Control programs of lenders that affected residential mortgage loan files in 2011 and may pose significant risk in 2012. Here’s the scoop on their findings:

****According to Interthinx, 40.9 percent of its Quality Control findings relate to missing documentation or data integrity issues. Eligibility and credit issues account for only 18.3 percent of 2011 findings. “Many in our industry will be surprised to learn that more than 40 percent of our findings last year were related to missing documentation or data integrity issues,” said Connie Wilson, executive vice president.

****“It’s significant when comparing this recent data to data from 2006 to 2009 when missing documentation only accounted for 7.1 percent of all findings,” said Wilson. “If lenders are not outsourcing their quality control processes, they should at least consider having someone from the outside take a look at their processes. If a lender’s internal quality control process mimics their internal originations process, the lender could easily miss documentation or data integrity issues.”

****“The shift towards manufacturing defects in 2011 from historical borrower eligibility issues is a significant finding,” added Jeremy Burcham, director of quality control for Interthinx. “Today’s borrowers are very well qualified for the most part. However, a well qualified borrower does not always protect lenders from elevated defect rates or even repurchase issues. The lender’s loan manufacturing process needs to be sound in all areas to avoid potential repurchase. A simple breakdown can leave the lender on the hook for a loan that should have been bulletproof.”

****The Quality Control process provided by Interthinx includes learning how each client does business to assist in identifying critical issues from application to close. Interthinx provides lenders statistics on the individuals who deal with their loans on a daily basis to identify training and process needs and to help lenders gain more confidence about the loans they originate.

****“If lenders haven’t used outsourced quality control in the past, 2012 may be the year to try it,” noted Wilson. “To reduce repurchase requests, most major Government Sponsored Enterprises (GSEs) recommend having an independent source back up internal processes.”

Progress In Lending

The Place For Thought Leaders And Visionaries