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:

Servicers Can Go Mobile, Too

*Servicers Can Go Mobile, Too*
**New Tech Trends**

***A lot has been written about originators using mobile technology, but servicers can take advantage of this technology, as well. For example, RxOffice Inc., a global provider of software design and development services and also a sister company of IndiSoft, a technology development firm that focuses on systems for the mortgage industry, announced today the availability of RXOffice Project portal for Android mobile devices to IndiSoft customers. The new mobile app enables secure tracking of projects at every stage from any location.

****“We have a staff that is frequently mobile, so it is paramount that they are able to operate [remotely] from any location,” said Samantha Sue Friedman, director of product development and delivery for Hope LoanPort, a non-profit, e-commerce platform powered by IndiSoft technology. “With as many different projects and clients as we currently have, we must ensure that we accurately track our time and the status of each project. The mobile version of the RxOffice Project portal allows us to easily enter requests and log time while providing complete transparency into all project updates.”

****Users who access the mobile portal still receive the key performance indicators and information provided by the online version that they need to create timely reports regarding project statuses. The portal offers the visibility clients need to effectively manage their projects with IndiSoft and enhance their productivity regardless of whether or not they are in the office.

****“More on-the-go industry professionals need access to information anytime of the day and from anywhere,” said Sanjeev Dahiwadkar, founder and CEO of RxOffice and IndiSoft. “In today’s mobile society, our new RxOffice Projects portal gives our clients the peace of mind that they now have the information they need at their fingertips regardless of their location.”

The Result Of Technology Consolidation

*The Result Of Technology Contraction*
**What Do All These M And As Mean?**

***Technology acquisitions have been hot and heavy this year. We’ve seen midtier technology companies become giants. I guess the strong truly are surviving. But what does all of this mean for our industry? Is it a positive or a negative? Will we see more or less innovation? Here’s what two industry insiders had to say on this topic:

****“It’s all about agility,” said Craig Bechtle, EVP/COO at origination vendor MortgageFlex Systems. “One of the overriding characteristics of the independent technology provider is their ability to react quickly to market changes. A flat organization is able to change direction, shift resources, and focus energy on a problem without having to seek approvals from multiple organizational layers.”

****MortgageFlex has been active in the mortgage industry for 30 years. This year PROGRESS in Lending named their latest technology release a top industry innovation. Why? Because they literally changed the game and advanced their system to meet the needs of this ever-changing market.

****“Whether the technology provider is controlled by a larger company or an investment firm, the parent organization wishes to understand where its resources are being used and for what purpose,” noted Bechtle. “Even if the technology provider is able to operate somewhat independently, there is always the burden of having to justify decisions to the parent. The independent technology provider with its flatter organization structure is free of these constrictions, resulting in more agile decision making with faster responses to market needs.”

****Certainly independent firms are more agile and thus better prepared to deal with industry change. Nonetheless, the rubber hits the road with the lender. If the lender isn’t buying a given technology, it doesn’t matter how innovative that technology is. So, what do lenders think of the recent technology contraction?

****Brian Koss, EVP of National Production at national lender Mortgage Network, Inc., responded, “It seems as though because of the sins of the past, the business of mortgage is less attractive. The major lending institutions don’t want to be seen as sticking their neck out because their reputation may suffer. For existing players, they’re pulling back to mitigate risk. Quality is so much better now, but the public doesn’t see that, which is keeping investors away. Investors don’t want to be seen as entering or doubling down in the mortgage business.

****“The biggest risk to innovation in my view comes from the agencies,” believes Koss. “Fannie and Freddie aren’t spending a dime. Further, you don’t see Wall Street providing innovation. The market was always been about finding a better way to do things, but now everyone is stagnant. We get approached by the street about new alt-a solutions, but it never goes anywhere. Until we work out the secondary market, the only innovation will be around compliance.

****“In terms of technology, our CTO often tells me that he is disappointed by the technology out there, so we build a lot of our own technology and bolt on to it,” continued Koss. “Also, when we see good technology we fear that they are not well funded. We see great technology in some small companies that we choose not to invest in. So, a lot of times we build our own. Right now we are rolling out an AllRegs platform. We want to thoroughly train all of our people. We offer a lot of different products and services, but we’re not just going to throw people at reverse lending, for example. So, technology helps, but you have to choose wisely.”

HomeVestors Is Bullish On Housing

*HomeVestors Is Bullish On Housing*
**Franchise Sees Opportunity**

***It looks like 2012 is shaping up to be one of the best ever for HomeVestors, the largest professional home buying network of independently owned and operated franchisees and the number one buyer of houses in the U.S., as the company announces a new record of enrolled franchises through the first half of the year, an increase of almost 30 percent over last year.

****“More than 60 new franchises have opened in the past six months. This is a good indication of the interest in the real estate investor market,” said HomeVestor’s co-president, David Hicks. “We anticipate strong sales to continue because of the large numbers of potential franchisees who have shown an interest in joining our company.”

****HomeVestors of America, the We Buy Ugly Houses franchise, was founded and began franchising in 1996. Since then, HomeVestors franchisees have purchased over 50,000 homes in 37 states, which is no small feat. In the first half of 2012, HomeVestors added 64 new franchisees, representing 22 states, putting the company closer to reaching its goal of 100 new franchisees by year’s end.

****“Investors believe there is opportunity in the market, and we see this in the record number of new franchisees joining our company,” said Ken Channell, HomeVestors’ co-president. “Once on board, franchisees realize the company’s commitment to them in the training, guidance and ongoing marketing support.”

****Franchisees new since April 2012 include:  Kenneth B. Mills of Atlanta, GA; Darryl Miller and Sebastian Marshall of Houston, TX; Tasha Murray and Steven Murray of Tampa, FL; Shirley Carroll and Randy Carroll of Anniston, AL; Julie Eakin and Dean Eakin of West Palm Beach, FL; Willie G. Brown of Jackson, MS; Kalyn Bassett and Ronald M. Powell of Las Vegas, NV; SPIN RES, LLC of Houston, TX; Daniel Martinez of El Paso, TX; W. Everette Starke, Jr. of Richmond, VA; Leslie West and Colby West of Norfolk, VA.

Firm Releases MI Research Report

*Firm Releases MI Research Report*
**Knowledge Is Power**

***zIngenuity, a mortgage consulting firm providing strategic advisory services to mortgage lenders and servicers, has launched the July 2012 edition of zInsights, an analytical report on the mortgage insurance (MI) industry. Through zInsights, zIngenuity provides periodic analysis of the state of the mortgage insurance industry, the health of the existing MI carriers, and the current regulatory environment on those carriers and the industry.

***While lenders, MI carriers, and investors dispute liability on a large inventory of seriously delinquent loans, zIngenuity provides advice and resolution of those disputes through its advisory services and industry knowledge. Prepared by the firm’s Analytics team, zInsights explores the issues of capital depletion, aging inventories, and the continued stresses on the mortgage insurance model.

***“zIngenuity remains the only independent advisory firm focused on mortgage insurance related issues.” said David Reber, President and CEO of zIngenuity, Inc. Reber added, “Our clients continue to ask us to provide an unbiased outlook on the current state of the mortgage insurance industry and its participants, including an assessment of counterparty risk. Since the inaugural edition of zInsights in 2011, we have received an overwhelming response from our customer base and colleagues.”

***zInsights is available from zIngenuity by downloading it from the firm’s website: www.zingenuity.com.

Lender Looks For New Talent In New Ways

*Lender Looks For New Talent In New Ways*
**Recruiting And Training**

***Churchill Mortgage, a lender providing conventional, FHA, VA and USDA residential mortgages across 26 states, announced its partnership with Ron Quintero, CEO of the Real Estate Radio Network, a nationwide alliance of real estate professionals reporting on the current real estate market. Through this partnership, Quintero will help support the lender in recruiting, training, motivating and retaining loan officers.

****With Quintero’s strategic guidance, Churchill Mortgage has also created www.JoinChurchill.com, a centralized training portal to support branch managers in recruiting and training local talent. The website features employee testimonials and informational videos about Churchill’s lending philosophy, in addition to information about applying for open positions.

****“I’m excited for the opportunity to work with a mortgage company that is not only celebrating its 20th anniversary, but continues to excel despite the challenging economic environment,” said Quintero. “Churchill Mortgage truly sets the industry standard in mortgage lending, and I look forward to supporting their recruitment efforts.”

****Churchill Mortgage continues to maintain steady growth and is currently on track to reach $1 billion in loans. In 2011, the lender increased staff by more than 11 percent, and continues to recruit industry talent and open new branches across the nation.

****“Ron’s professional insight and proven methods give us a tremendous advantage in preparing our employees for the evolving mortgage landscape as well as recruiting new staff,” said Mike Hardwick, president of Churchill Mortgage. “As we continue to grow, Churchill aims to recruit the industry’s top professionals, and we look forward to Ron’s support as we maintain our commitment to being the nation’s most trusted financial advisor.”

Preserving Home Ownership

*Partnership Looks To Preserve Home Ownership*
**Hope LoanPort Makes News**

***Hope LoanPort (HLP), the national, non-profit, Web-based mortgage solution tool used for streamlining loss mitigation applications, has partnered with GMAC Mortgage to launch Homeowner Connect (homeownerconnect.org). As a consumer direct Web portal, Homeowner Connect will standardize the entire communication life-cycle of loss mitigation activities between mortgage servicers and borrowers. Homeowners, who may be struggling with their mortgage, will have the ability to connect with valuable free resources, such as information on options via government and industry programs – all in one place and from any computer with internet access.

****GMAC Mortgage sponsored this effort and will proactively notify its borrowers at-risk of foreclosure about the availability of this option. Additionally, GMAC Mortgage customers will be able to securely apply for foreclosure alternatives, through Homeowner Connect, directly online. They will have the ability to submit their application, track their status, and upload all required documents.

****HLP will also partner with MortgageKeeper Referral Services, a Web-based database application containing over 6,000 non-profit and government agencies in 20 different service categories. MortgageKeeper’s application will help homeowners using HLP to access local solutions for their unique situations—potentially enhancing their qualification for a foreclosure alternative.

****“GMAC Mortgage has been a pioneer in the industry and a great partner since the creation of Hope LoanPort. A great deal of insight was provided by GMAC’s team in the creation of this free, user-friendly utility. We expect Homeowner Connect to be a real game changer in the industry as a powerful tool in assisting homeowners facing foreclosure,” said Cam Melchiorre, President and CEO of Hope LoanPort.

****“GMAC Mortgage is committed to preserving home ownership whenever possible,” said Dana Dillard, Senior Vice President, GMAC Mortgage. “In that spirit, we’re proud to support this initiative with Hope LoanPort to provide useful tools and education to borrowers.”

****Homeowner Connect was created in response to the National Mortgage Settlement, which called for a consumer-centric web portal. Additionally, Homeowner Connect aligns with requirements found in the OCC Consent Orders, the joint-GSE Servicing Alignment Initiative, as well as many new state policies symbolized by the recent passage of the California Borrowers’ Bill of Rights. With this broad based industry appeal, HLP is actively working with other mortgage servicers to participate in Homeowner Connect after the initial roll out to GMAC customers. Participation is open to both servicers already using the HLP Housing Counselor Portal, and new participants with HLP.

****The Web design and development for Homeowner Connect is through IndiSoft, the developer of RxOffice, a technology development company for default servicing in the financial services industry.

Vendor Automates The FHA Exchange

*Vendor Automates The FHA Exchange*
**New Features Are Launched**

***FHA continues to be a big part of the mortgage lending space. FHA’s share is very strong. To this end, vendors are looking to launch new ways to make it easier and more cost effective for lenders to deal with FHA. In this case, PROGRESS in Lending has been told that origination vendor LendingQB announced that its PriceMyLoan automated underwriting systems (AUS) interface with the Federal Housing Administration’s (FHA) TOTAL Scorecard platform can be utilized to decision and sell loans direct to Ginnie Mae.

****Ginnie Mae issuers can utilize LendingQB’s interface with TOTAL Scorecard in one of two ways. First, if a lender has already implemented and is actively using LendingQB’s AUS to underwrite all types of loans, they also have automatic access to the interface and can begin using it immediately. Second, if a lender is not already using LendingQB’s platform, Web services are available to allow them to access the interface from within their existing loan origination system (LOS) without having to purchase any additional software.

****“Ginnie Mae issuers represent a sizable portion of the FHA market and are continuing to play a vital role in originating quality FHA loans,” said Binh Dang, president of LendingQB. “Lenders that are interested in taking advantage of our AUS’ interface with TOTAL Scorecard can seamlessly connect to our platform to return instant, accurate decisioning on FHA products. Our offering provides lenders with another option to efficiently and cost effectively underwrite FHA loans that are specific to Ginnie Mae issuers.”

****LendingQB’s platform is completely Web-based and is comprised of LO, broker, and consumer direct point-of-sale Web portals for all lending channels; product and pricing engine; PriceMyLoan AUS; loan processing; electronic documents, closing; secondary marketing; and interim servicing. LendingQB also accompanies business intelligence (BI) and data analytics functionality along with detailed reporting that helps lenders locate and translate their data into actionable information, enabling them to make informed business decisions that establishes a competitive advantage and leads to greater profitability.

Fraud Risk In The U.S. Goes Up

*Fraud Risk In The U.S. Goes Up*
**New Research Released**

***Interthinx has released its quarterly Mortgage Fraud Risk Report covering data collected in the second quarter of 2012. According to the most recent analysis, overall risk resumed its upward climb after a one-quarter pause, with the Index value rising nearly 7 percent to 149 (n = 100). The change was primarily driven by the recent inclusion of 91 metropolitan statistical areas (MSAs) that moved into the “very high risk” category. That includes Chattanooga, Tennessee, which — with a quarter-on-quarter increase of more than 30 percent in its Index value — is currently the riskiest MSA in the country. In addition, Georgia has joined the top five states for overall mortgage fraud risk for the first time since the report started in second-quarter 2009. Other notable findings include:

****>> The New York City MSA continued its precipitous rise in the rankings, climbing to sixth place in the current quarter from seventeenth place just six months ago. In addition, five New York City area ZIP codes — including three in Brooklyn — are now among the top ten riskiest ZIPs in the nation.

****>> Nevada and Arizona remain the two riskiest states despite experiencing a small decrease in overall fraud risk over last quarter. Nevada’s Index value is currently 208, and Arizona’s is at 206. The MSAs for Las Vegas-Paradise, Nevada, and Phoenix-Mesa-Scottsdale, Arizona, are notably absent from the list for the first time since fourth-quarter 2009.

****>> Florida remained the third riskiest state, with a Fraud Risk Index value of 199. Contributing to Florida’s ranking is its dominance of the overall and type-specific top ten lists: Miami-Fort Lauderdale-Pompano Beach, Cape Coral-Fort Meyers, and Port St. Lucie for overall risk at the MSA level; two of the riskiest MSAs for Property Valuation and one for Occupancy Fraud; and four of the riskiest ZIP codes.

****>> For the first time since the inception of this report in second-quarter 2009, California is not in the top five and is replaced by Georgia. Despite California’s overall decline in fraud risk, its metros are well represented in all the top ten lists, taking nine of the top ten spots for Employment/Income Fraud Risk. The San Jose-Sunnyvale-Santa Clara MSA was the riskiest metro for Identity Fraud Risk with an Index value of 280 — 20 percent higher than its nearest rival.

****>> Fraud risk for condominiums differs from that of single-family homes. In particular, condos are more at risk for Employment/Income and Identity Fraud Risk but less at risk for Property Valuation Fraud Risk. Geographically, the difference in risk between census divisions varies as well, with condos presenting less risk in the East North Central, Middle Atlantic, and New England divisions and having more risk in the West North Central Division.

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.