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Merger Proves That The Standalone PPE May Be Dead

*Merger Proves That Standalone PPEs May Be Dead*
**By Tony Garritano**

TonyG***In the past 12 to 18 months we have seen a slew of product and pricing engines (PPEs) get acquired. To name a few, Calyx acquired Loan-Score Decisiong, Ellie Mae followed by acquiring Mortgage Pricing Systems, Mortgage Builder acquired LXE, PPE Optimal Blue acquired competitor Sollen and earlier this year San Francisco-based private equity firm Serent Capital invested in Optimal Blue. Are there any standalone PPEs left? Now I heard yesterday that NYLX has merged. Here’s the scoop on that deal:

****Aklero Risk Analytics Inc., a provider of loan quality management software and services via automated data and document validity assurance, and NYLX have signed an agreement to merge. The combined company will be called LoanLogics and boasts that it has 450 clients and over 20,000 users.

****LoanLogics amounts to an Enterprise Loan Quality and Performance Analytics Platform that aims to enable lenders, investors, servicers and counterparties to improve loan quality, validate compliance, improve profitability, and manage risk, during origination, sale and servicing of loan assets.

****LoanLogics management team is comprised of senior managers from Aklero and NYLX as well as some new industry recruits. Howard H. Conyack, founder and CEO of NYLX, will serve as chairman and founder of LoanLogics. Brian K. Fitzpatrick, CEO of Aklero, will serve as President and CEO of LoanLogics.

****Howard H. Conyack, Chairman of LoanLogics stated, “Both NYLX and Aklero have had a vision to truly address the need for better quality loan data and greater transparency and reliability of loan assets through the life of the loan. Independently we were making progress, but together we will have the talent and technology to achieve this goal more quickly and with greater impact.”

****“The merger of Aklero and NYLX enables clients to benefit and gain the advantages of a seamless solution that reduces risk and formally tracks and reports on loan quality and performance metrics at various stages of the life of the loan. LoanLogics’ mission is to bring our customers to greater stability and strength through advanced technology and services that support verification, audit and measurement of loan quality,” said Brian K. Fitzpatrick, President and CEO of LoanLogics.

****LoanLogics is headquartered in Fort Washington, PA. No further details on the deal were disclosed, but what it says to me is the days of the standalone PPE being a strong value proposition for lenders has gone the way of the dinosaurs, only in this case the meteor that caused the extinction of this technology class was the mortgage meltdown. Once the subprime lenders and designer loan products went away the need for a PPE was diminished. Maybe that need will come back, but in my view once something is dead it usually stays dead.

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Understanding The News: Perfecting Loan Validation Processes

*Perfecting Loan Validation Processes*
**Validating MERS Electronically**

***Aklero Risk Analytics Inc., a provider of mortgage quality control software and services via their automated data and document validity assurance platform, has unveiled DQx for MERS Data and Document Validation Module. The module is part of Q-Close, their Loan Quality Management Platform, and provides an automated method to validate the accuracy of data resident in the MERS Electronic Registry. Here’s what you need to know:

****“We developed this offering in response to the requirements outlined in the MERS Quality Assurance Procedures issued in September requiring servicers to validate the accuracy of the data held on the MERS’ system against source documents,” said Richard J. Downing, Executive Vice President of Sales for Aklero.

****As a result, lenders are required to attest that they have performed a three-way document to data validation, including comparing the data on the MERS system against the bank’s data and against the “true data,” or original documents, a process that ensures a high degree of accuracy.

****“Aklero is the only firm in the mortgage industry that has automated the process of comparing the data that populates original documents to the records the servicers and MERS maintain,” said Julia Hernandez, Senior Vice President of Professional Services for Aklero. “People make mistakes, but, by relying on the original documents, especially those from the closing, our solution provides a more accurate and comprehensive audit.”

****That approach enables Aklero to review the documents and identify discrepancies. For servicers, the benefit of using this module is that Aklero can validate thousands of loans overnight, while in the same amount of time, servicers that cling to expensive manual processes complete far fewer loans files.

****Based in Fort Washington, Penn., Aklero provides mortgage quality control and risk analytics solutions for the mortgage lending industry. Its proprietary Q-Close Loan Quality and Mortgage Risk Analytics Platform provides loan audits and automated deficiency detection, allowing users to quickly and efficiently find, fix and understand problems in mortgage loan files. Augmenting its technology platform the company also provides forensic analysts, mortgage quality control audits, due diligence loan reviews and a variety of operational solutions and customizable products and services that can be tailored to suit clients’ needs. Aklero’s customers include mortgage lenders, institutional investors, investment banks, government agencies, community banks, credit unions, mortgage insurance companies and other financial institutions. After an in-depth evaluation that pitted the firm against its competitors, the American Banker Association, named Aklero its exclusive provider of mortgage quality control services.

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