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I Always Say Knowledge Is Power

*I Always Say Knowledge Is Power*
**By Tony Garritano**

***As we talk about things like the new CFPB disclosures, we all need to be educated about what to do to comply. But we should just look to be educated about new rules, we should look to also get more educated about just how to improve our overall lending process. For example, LendingQB will be holding two educational webinars that address how lenders should develop an analytical approach to identify hidden problems in their lending processes and technology weaknesses, helping them make informed decisions on which technologies will have the biggest impact on profitability.

****The webinars largely focus on how to perform an analysis of a lender’s operations, workflows and existing technologies to arrive at a strategy that will reduce cost per loan, maximize employee productivity, remove manual touch points, eliminate unnecessary applications, increase profitability and optimize enterprise-wide performance.

****LendingQB will introduce its Enterprise Process Assessment (EPA), which is a complementary holistic, in-depth review and discovery process of a lender’s specific lending workflow. The EPA dissects every step of the loan life cycle from the moment an originator engages with a borrower to when the loan is sold on the secondary market. A comprehensive report is then provided to lenders on how to achieve their technology goals.

****“We constantly see lenders challenged to make intelligent, strategic technology decisions that are business-critical to both their short and long-term growth and profitability,” said Binh Dang, president of LendingQB. “The webinars we put together are all about helping lenders fully understand the real impact of how technology can positively or negatively impact their bottom line using established metrics. Attendees have a solid starting point to initiate this type of evaluation process.”

****Topics include:

****>> An overview of the mortgage technology challenges lenders face in today’s market;

****>> Using metrics to achieve a high ROI;

****>> The importance of a seamless workflow;

****>> How to reduce cost per loan and increase profitability;

****>> Identifying vaporware and avoiding feature-based buying traps;

****>> Technology buying pitfalls to look out for.

****Two sessions will be offered on Wednesday, September 12th, 2012. Session 1 starts at 1:30 p.m. EDT and Session 2 starts at 4:30 p.m. EDT. For additional information contact LendingQB at 888-285-3912, info@lendingqb.com, or by visiting www.lendingqb.com.

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.”

Loss Forecasting

*Loss Forecasting*
**By Tony Garritano**

***Looking to meet tighter loss forecasting and stress testing requirements with a sound, transparent, and proven methodology? One vendor is making this easier. Interthinx has launched TrueOutlook, a portfolio forecasting and stress testing tool that enables financial institutions to predict to what extent the quality of underwriting, age of loans, and economic impacts will affect future losses. Here’s how it works:

****TrueOutlook allows for the forecasting and stress testing of portfolios against different originations strategies and economic factors to show lenders what percentage of risk is within their control and what is not. With TrueOutlook, small to midtier banks and credit unions can leverage technology previously available only to large global financial entities. TrueOutlook uses Dual-time Dynamics, the patented forecasting technology of the Interthinx LookAhead and TrueCapital products, which has proven accurate through more than 15 years of global economic change.

****“TrueOutlook makes sophisticated scenario-based forecasting and stress testing available to a much larger group of lenders across the United States,” stated Michael Smith, chief technology officer and chief architect at Interthinx. “It’s a comprehensive, cost-effective service that can be used for all U.S. consumer retail portfolios, such as auto loans, credit cards, home equity loans, and personal or small business loans. TrueOutlook is designed to meet the needs of organizations with limited internal resources and staffing. The tool enables customers to benefit from industry benchmarking and more accurate forecasting models that stress-test portfolios under different economic scenarios in line with regulatory guidance from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).”

HARP 2.0 Refinances Are Hot

*HARP Refinances Are Hot*
**By Tony Garritano**

***Is HARP 2.0 working? According to 360 Mortgage Group, a privately-owned mortgage bank, with a 100 percent focus on the wholesale mortgage lending channel, has seen a significant increase in refinancings being offered to homeowners under HARP 2.0. Since HARP 2.0 went into effect on March 17, 2012, 360 Mortgage has seen a drastic increase in the active loan pipeline and does not see any signs of a slowdown in the near future. This significant increase in demand from borrowers is a direct result of the company offering fewer restrictions and more simplified eligibility requirements than others in the industry.

****“Unlike many of the larger banks that are only offering HARP refinancing opportunities on mortgages they are currently servicing, 360 Mortgage is committed to working with the improved and fully-licensed mortgage broker community to help homeowners take advantage of historically low interest rates, improve cash-flow and preserve potential home equity gains under this well-conceived housing policy,” commented Mark Greco, President and Founder of 360 Mortgage. “We are excited to open up our refinancing services to millions of individuals who have previously been restricted by various eligibility requirements.”

****HARP 2.0 was designed to help homeowners refinance into shorter-term loans in order to rebuild equity more quickly. With 360 Mortgage, Expanded Approval (EA)-I, II, III, and occupancy loans are HARP-eligible with no overlays, unlimited LTV and CLTVs with Automated Underwriting (AU) Approval. The wholesale lender is also accepting Mortgage Insurance (MI) transfers and will require no appraisals on loans with an Appraisal Field Waivers (AFW). Finally, there is no limit on the number of financed properties owned by a borrower that can be considered HARP-eligible and no minimum FICO is required. 360 Mortgage will consider borrowers whose application date is listed after December 1, 2011.

****“Due to the overwhelming volume of refinancing applications, many mortgage lenders have been forced to set their own restrictions that are not in the spirit, or a reflection of, the updated HARP 2.0 guidelines,” continued Mr. Greco. “360 Mortgage is focused on expanding our mortgage broker partners and operational infrastructure so we can meet the growing demand.”

****According to research released by Lender Processing Services on August 9, 2012, HARP has seen considerable activity since the beginning of 2012 even though overall mortgage prepayment activity remains stable.

****“Since first accepting HARP 2.0 applications in March, 360 Mortgage’s active loan pipeline has increased by more than 700 percent,” added Mr. Greco. “HARP 2.0 has been very successful so far with the number of homeowners taking advantage of the program, and we expect that trend will continue in the coming months.”

New Hires Signal Growth For One Vendor

*New Hires Signal Growth For One Vendor*
**Tracking New Hires**

***End-to-end technology provider LenderLive, has hired Eric Prosperi. He joins the company as senior vice president of document management solutions for its document services division. LenderLive has also brought on Chris Sabbe as senior vice president of strategy and business development for its loan servicing division. Here’s why:

****Prosperi will be responsible for the management, configuration and design of LenderLive’s document management, recognition, data extraction and workflow applications. He will work closely with internal operations as well as with client relations to ensure that LenderLive clients gain value and ROI. Prior to joining LenderLive, Prosperi spent nearly seven years with Aurora Bank FSB and nine years with GE Capital. At Aurora, he served in many positions before being named senior vice president, residential loan servicing. In this role, he oversaw numerous areas including loss mitigation processing, default letters, cash management, investor reporting, default reporting, credit reporting, default accounts payable, claims and property preservation. As a Lean Six Sigma Master Black Belt and graduate of GE’s prestigious Information Management Leadership Program, he also has a deep background in process improvement and information technology.

****Sabbe has more than 17 years of experience in the financial services industry in business development, sales and consulting. He will be responsible for corporate strategy, business development and operational efficiencies in his department, specifically spearheading efforts to provide credit unions and community banks true end-to-end fulfillment, with specific emphasis on private-label, high-touch servicing solutions. Additionally, Sabbe will work with executive management to meet quarterly and annual objectives while seeking to drive new special servicing, subservicing and component servicing opportunities. Prior to LenderLive, Sabbe was senior vice president, business development at Marix Servicing, where he managed servicing engagements for hedge funds, large banks and mortgage insurers. Sabbe has sold origination, servicing and loss mitigation engagements at several top-tier financial institutions including JPMorgan Chase, Fifth Third, and Flagstar.

****“LenderLive is in true growth mode,” Sabbe said. “With the market clamoring for innovative, compliant solutions, we are positioned to redefine servicing for the next generation of investors. LenderLive’s high-touch approach to each custom engagement is reshaping the industry away from a ‘one size fits all’ mentality, particularly in traditionally underserved markets.”

****According to Rick Seehausen, president of LenderLive, “These two divisions continue to grow, therefore it is paramount that we have experienced leaders in place to ensure we effectively manage that growth and better position the company for the future. These gentlemen have the industry knowledge and hands-on experience to bring ideas that will complement the LenderLive team to enable continued success.”

More Kudos To Go Around

*More Kudos To Go Around*
**By Tony Garritano**

***Yesterday I shared some good news about a firm in our space getting on the Inc. 500. Today I want to report that Nationwide Title Clearing (NTC), one of the country’s leading service providers to the mortgage industry, has also made the Inc. 500|5000 list at number 2730, despite the fact that the U.S. has experienced its roughest economy since the Great Depression of 1929.

****“The fact that NTC has fared so well in such a grim economy is a testament to the initiative and drive of the NTC work force,” said John Hillman, CEO for Nationwide Title Clearing (NTC). “Their ability to deliver highly accurate and fast results has put them into a position of leadership and support to their clients, which include eight of the ten largest mortgage lenders and servicers in the U.S.”

****The company’s 2011 release of PerfectChain Assignment Verification Reports service also contributed to the company’s swift growth over the past year.

****There are very specific criteria a company must meet in order to be considered for the Inc. 500 list. A company must have generated at least $100,000 in revenue in 2008 and at least $2 million in revenue in 2011. Other qualifications include being privately held, for profit, based in the U.S., and independent (not a subsidiary or division of another company).

****“This achievement puts you in rarified company, especially if you consider that there are nearly 7 million private, employer-based companies in the U.S.A.,” said Inc. Editor-in-Chief Jane Berentson, in a memo to last year’s Inc. 500 list.

Lender Boasts 30% ROI

*Lender Boasts 30% ROI*
**VITEK Mortgage Group Profiled**

***Who can afford to waste anything these days? Nobody. So when you make a technology investment it better pay off. In this case, Sacramento, Calif.-based VITEK Mortgage Group uses Advantage Systems’ Accounting for Mortgage Bankers (AMB) system to increase revenue by 30 percent and expand its business. Here’s how:

****As one of the fastest growing lenders in Sacramento, VITEK needed an accounting system that would enable the mortgage lender to manage increasing amounts of loan data, while enabling the company to keep its focus on growth. In 2010, VITEK chose Advantage Systems AMB system, an accounting system designed specifically to meet the needs of mortgage bankers. Since launching the AMB solution, VITEK grew revenues by 30 percent and increased the quality of its financial data as well as back office efficiencies. More capital and better financial reporting have led to a stronger balance sheet for VITEK, which enabled the company to add two warehouse finance lines.

****“AMB enabled us to deliver high quality financial reports faster, close the books five days sooner and grow rapidly while not having to add additional accounting staff,” said Scott Battenburg, chief financial officer of VITEK. “The image importing capability reduced the amount of time we spent thumbing through a filing cabinet to find the transaction in question. An out-of-the-box accounting system could not have provided the level of data insight we have experienced with AMB.”

****“Lenders must keep their focus on growing loan volumes to be competitive in today’s marketplace, which means back-office processes such as accounting need to be as efficient as possible or companies risk impeding that growth,” said Brian Lynch, president of Advantage Systems. “VITEK’s executive team has done and excellent job of growing their business and having the right accounting system helped.”

One Of Our Own Gets Kudos

*One Of Our Own Gets Kudos*
**By Tony Garritano**

***Matt Martin Real Estate Management has been named to Inc. magazine’s 31st annual Inc. 500|5000, a list of the fastest-growing firms in the country. A national asset management and default services firm that deals with multiple federal agencies and mortgage servicers, investors and insurers, MMREM is ranked number 116 out of the 500 fastest-growing privately held companies in the United States. The list represents a comprehensive look at the most important segment of the economy — America’s independent entrepreneurs. Companies such as Microsoft, Zappos, Intuit, Jamba Juice, Zipcar, Clif Bar, Vizio, Oracle, and many other well-known names gained early exposure as members of the Inc. 500|5000.

****“We’re thrilled to be named to the Inc. 500 list,” says Matt Martin, founder and president of MMREM. “We’ve had phenomenal success growing our business since its inception, and all indicators point to continued expansion ahead,” Martin adds.

****MMREM was ranked the 116th fastest-growing company based on an increase in revenues of 2669% over the three-year period from 2008 to 2011. The company is a leading provider of real estate services, including asset disposition, financial advisory, and mortgage loan loss mitigation services.

****The 2012 Inc. 500 list represents the most competitive crop in the list’s history, according to Inc. magazine. To make the cut, companies needed to achieve a minimum of 770% in three-year sales growth. MMREM’s impressive growth of 2669% places the company in the 75th percentile among the top companies. Complete results of the Inc. 500|5000, including company profiles and an interactive database that can be sorted by industry, region, and other criteria, can be found at www.Inc.com/500.

****“Now, more than ever, we depend on Inc. 500|5000 companies to spur innovation, provide jobs, and drive the economy forward.  Growth companies, not large corporations, are where the action is,” says Inc. magazine Editor Eric Schurenberg.

****MMREM’s success has been driven by an innovative business model and a strong management team, according to Martin. “MMREM remains on the leading edge of real estate asset management and disposition, which have become increasingly important in today’s challenging housing market. Our talented and hard-working people are behind our success, and they will pave the way for continued growth in the future,” Martin says.

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.”

The Right Way For Lenders To Branch Out

*The Right Way For Lenders To Branch Out*
**By Tony Garritano**

***What will branches look like in the future? Will they even exist? The answer is Yes. Technology was supposed to replace the underwriter after the advent of DU and LP, but it didn’t happen. After that technology was going to replace the broker and LO, but that hasn’t happened either. In this case, technology exists today to create a 100% call center environment instead of a branch, but most only see this as a limited model. Here’s why:

****“We like the branch organization model because it fosters growth for the lender quickly,” said Brian D. Lynch, the founder and president of Irvine, Calif. -based Advantage Systems, a provider of accounting and contract management tools for the mortgage banking and real estate development industries. “Turning brokers into correspondents is tough. So, most lenders put the branch manager in charge, which requires some technology investment. An automated approach makes this possible, but when done well lenders can expand almost at will.”

****“It comes down to that face-to-face, trusted advisor model,” added Joey McDuffee, director and head of marketing of origination vendor Wipro Gallagher Solutions. “The biggest issue with a branch is the infrastructure. From a technology perspective, you need to embrace ways to push data into the field. We’ve done a lot of work in the mobile space. We think mobile technology is a good way to ensure data accuracy. Branches are really becoming a community center, so they are relevant, and technology can play a big role in helping the branch provide better customer service overall.”

****It also comes down to efficiency. One way to make the branch model the most efficient model out there is to go paperless. “We’ve been betting that the retail model is the winning model,” pointed out Sanjeev Malaney, co-founder and chief executive officer for Capsilon, a provider of cloud-based document sharing, imaging and collaboration solutions for businesses. “As a result, we have been focused on providing technology to enable branches to go paperless and still collaborate efficiently. Our lenders tell us that this is what they need to make their business succeed.”

****But what does the lender truly think? Are they fully invested in a more modern, technology-savvy branch model after all? “With our organization, the branch model allows us to focus more on the purchase world,” noted Kevin Stitt, founder and president of Tulsa, Okla.-based Gateway Mortgage Group LLC, a complete end-to-end mortgage banking firm that specializes in originations, servicing and correspondent lending. “The call center model works better for just refinances. The branch model also allows us to create branding and put our name on the side of a building to establish our company in a local neighborhood. We like it.”

****So, I guess branches are here to stay.