Stewart announces the release of its electronic disclosure solution designed to automate the lender's initial disclosure process. Stewart's eDisclosure solution provides the ability for lenders to electronically transmit and display initial disclosure documents to their borrowers in a secure, online, consumer-friendly environment for electronic acceptance.
"The new electronic disclosure solution eliminates the need for lenders to print and mail their initial disclosure documents to the borrowers," said Jason Nadeau, senior vice president of eLender business for PropertyInfo Corp., a Stewart company. "In addition to automating the process of delivering the disclosures, lenders have the ability to utilize Stewart's subsidiary, Online Documents Inc., as the provider of the disclosure packages."
Lenders can leverage and simplify the eDisclosure process to its fullest by ordering compliant, warranted Initial Disclosures packages through Online Documents Inc.
Online Documents Inc. provides compliant three-day Initial Disclosure and Closing Document packages for all 50 states within minutes of a request - 24 hours per day, seven days per week. The company provides reporting on the status of the eDisclosure package and offers services to print and mail packages when not electronically viewed or accepted.
In addition to displaying initial disclosure documents to borrowers, Stewart's eMortgage suite now provides the lender with a complete paperless solution starting with electronic disclosures, closing electronically and ending with storage in Stewart's eMortgage Manager electronic vault along with MERS(R) eRegistration and electronic delivery to investors.
"Stewart's eMortgage solution is uniquely positioned in the market by being the most complete, end-to-end solution for a lender," Nadeau continued. "Recent market and regulatory changes have increased the immediacy to innovate and dramatically improve the process. I believe Stewart is the only organization that contains all the necessary components to lead in the eMortgage space."
Stewart's eMortgage solution provides the lender a complete solution including electronic disclosures, electronic-document sharing and collaboration through SureClose(R), creation of compliant SMARTDocs through Online Documents' eMortgageDocs(TM), borrower review of closing documents, electronic signing of non-notary documents, eClosing through Stewart's eClosingRoom(TM), eNotarization of notary documents, electronic vaulting, eDelivery and eRecording.
"Stewart is committed to providing our lender partners with significant improvements in the loan closing and settlement process," said Stewart Morris Jr., president and co-chief executive officer of Stewart Information Services Corp. and chairman of PropertyInfo Corp. "Our organization has been the leader in innovation around the closing experience and through our embrace of eMortgage innovations, we will greatly enhance consumers' closing experience. Ultimately, this is about serving the customer and driving more loans to our partners through an improved and differentiated closing experience."
Visit Stewart at Booth #1438 and Online Documents Inc. at Booth #1466 at the 94th Annual Mortgage Bankers Conference for more information. Presentations on "eMortgages: a better way to business" will take place in the Stewart booth at the following times:
-- Sunday, October 14, 2007 5:00 p.m.
-- Monday, October 15, 2007 10:15 a.m., 2:15 p.m., 4:30 p.m.
-- Tuesday, October 16, 2007 10:15 a.m., 2:15 p.m., 4:30 p.m.
About PropertyInfo Corporation
PropertyInfo Corporation delivers state-of-the-art real estate information solutions to the real estate, closing and mortgage industries. As a global provider of online transaction management and e-closing solutions, real estate information services, title/escrow production systems, hosting services, software development and online product distribution via its Web portal, PropertyInfo.com, PropertyInfo provides title and real estate professionals with the electronic data and integrated applications needed to increase their business efficiency and improve the quality of information used throughout the real estate transaction process. For more information, visit www.propertyinfo.com or e-mail smarttechnology@propertyinfo.com.
About Online Documents, Inc.
Established in 1988, Online Documents (www.onlinedocuments.com) provides compliant mortgage documents and related services to lenders, nationwide. Online offers Web-based and desktop installations (Online Express(TM) Web and Online Express(TM)) for local lenders and more comprehensive enterprise solutions, including MISMO data feeds (Integration Manager(TM)) for regional and national lenders. Online delivers Initial Disclosures and Closing Document packages via the web and to local print destinations within minutes of an order, 24/7. Additionally, Online provides Print and Mail Services for Initial Disclosures from its central processing center and offers unique support to Attorneys who prepare and draw documents for lender clients through its advanced Document Review Manager(TM) technology.
About Stewart
PropertyInfo Corporation and Online Documents Inc. are wholly owned subsidiaries of Stewart Information Services Corp. (NYSE:STC), a customer-driven, technology-enabled, strategically competitive, real estate information, title insurance and transaction management company. Stewart provides title insurance and related information services required for settlement by the real estate and mortgage industries through more than 9,500 policy-issuing offices and agencies in the United States and international markets. Stewart also provides post-closing lender services, automated county clerk land records, property ownership mapping, geographic information systems, property information reports, flood certificates, document preparation, background checks and expertise in tax-deferred exchanges. More information can be found at http://www.stewart.com.
SureClose(R) is a registered trademark of Stewart Title Co. MERS(R) is a registered trademark of Mortgage Electronic Registration Systems Inc.
SOURCE: Stewart Title
Friday, October 19, 2007
Tuesday, October 16, 2007
Florida Company Brings eNotarization Into Fold
Florida Company Brings eNotarization Into Fold
A Florida-based residential and commercial mortgage-processing firm has begun following in the example of a number of Pennsylvania-based businesses, incorporating secure eNotarization into its workflow and encouraging its Notary Signing Agents to begin using their Electronic Notary Seals.
Prime Processors recently partnered with Stewart Transactions Solutions in Texas to use Stewart's eClosing Room, which utilizes the NNA's secure Electronic Notary Seal (ENSTM) for notarizations. This system makes the entire mortgage process - including notarization - electronic.
"This will provide a tremendous opportunity for Notaries who work with us to increase their business, and will allow us to make our workflow more secure and efficient," said Patrick Lawson, Operations Manager for Prime Processors, which is offering training sessions for Signing Agents wishing to segue into the electronic marketplace.
Not only is this electronic process more secure, but the time it takes a Signing Agent to complete a transaction is reduced tremendously, Lawson said.
"During our numerous tests we ran several nightmare scenarios that Notaries might run into, such as having to deal with multiple borrowers at once, and the average total time it took to complete each signing was 17 minutes," he said.
That's less than half the time it normally takes to complete such assignments using paper-based functions, said Florida Signing Agent Liz Adams, who participated in Prime Processors' training session.
Source: NNA eNotarization Update - Issue #27 October 2007
A Florida-based residential and commercial mortgage-processing firm has begun following in the example of a number of Pennsylvania-based businesses, incorporating secure eNotarization into its workflow and encouraging its Notary Signing Agents to begin using their Electronic Notary Seals.
Prime Processors recently partnered with Stewart Transactions Solutions in Texas to use Stewart's eClosing Room, which utilizes the NNA's secure Electronic Notary Seal (ENSTM) for notarizations. This system makes the entire mortgage process - including notarization - electronic.
"This will provide a tremendous opportunity for Notaries who work with us to increase their business, and will allow us to make our workflow more secure and efficient," said Patrick Lawson, Operations Manager for Prime Processors, which is offering training sessions for Signing Agents wishing to segue into the electronic marketplace.
Not only is this electronic process more secure, but the time it takes a Signing Agent to complete a transaction is reduced tremendously, Lawson said.
"During our numerous tests we ran several nightmare scenarios that Notaries might run into, such as having to deal with multiple borrowers at once, and the average total time it took to complete each signing was 17 minutes," he said.
That's less than half the time it normally takes to complete such assignments using paper-based functions, said Florida Signing Agent Liz Adams, who participated in Prime Processors' training session.
Source: NNA eNotarization Update - Issue #27 October 2007
Thursday, October 11, 2007
e-Innovation in Texas Town
e-Innovation Takes Root in Progressive Texas Town10:00a ET October 9, 2007 (Market Wire)
An innovative cast of individuals in a growing community of 27,000 just 50 miles south of Houston is quietly making history with same-day service in residential real estate closings and recordings. A local real estate professional, lender and title agent all meet online via Stewart Title's (NYSE: STC) SureClose(R) to complete residential real estate closings -- allowing home buyers and sellers to receive their title policy, note and deed all on the same day as the purchase of their new home. Stewart Title of Lake Jackson produces the title commitment and the closing documents using the AIM(R) title production system and SureClose. As the transaction manager, Stewart Title invites real estate agents such as Real Estate Plus broker/owner Donna Peiser, lenders such as Texas Dow Employees Credit Union (TDECU), and home buyers and sellers online to SureClose to see the status of the transaction. "At Stewart Title we strive to provide the best possible closing experience by providing visibility of the process to all the parties, placing the accumulation of closing documents in a secure online-closing file and using our click-to-sign technology," said Stewart Morris Jr., president and chief executive officer, Stewart Title Co. "We make the closing a celebration that is easy, fun and more understandable," added Morris. In addition to SureClose, Stewart Title of Lake Jackson offers its customers the ability to close online using eClosingRoom(TM). Prior to the closing, buyers and sellers can go online at their convenience using their PC, and read and sign all their non-notarized closing documents in eClosingRoom. When they arrive at Stewart Title for the actual closing with the notary, e-signing the remaining documents takes about 17 minutes. After closing, the closing package remains online and is submitted to the Brazoria County Clerk via Stewart's e-recording software. "As long as I can close before 3 p.m., I can have the deed back before 5 p.m.," said Diane Ragsdale, branch manager, Stewart Title of Lake Jackson. "My customers are just blown away when I ask them at the closing table, 'Would you like your real estate agent to bring your deed by your home today, or would you like to come by and pick it up?' "We are now able to offer same-day service, and our customers enjoy the process, too," said Ragsdale. "We've been accepting e-recordings successfully for the past year," said Brazoria County Clerk Joyce Hudman. "For us, it has cut a four-step process down to one step. In addition, our filers know within 30 minutes whether their recording has been accepted or rejected and can make any corrections if necessary." The crucial part of the equation was finding the lender who would be a part of the process. Stewart Title found that in TDECU, a financial entity with more than 100,000 members and nearly $1.2 billion in assets. "I have an online mortgage application with a two-minute approval," said Loretta Williams, TDECU vice president of real estate lending. "Our members have the easiest access to their closing documents and can get with us prior to closing if they have any questions. People are busy and everything is moving toward electronic delivery. "I am proud to be a major player in making mortgage loans in this area," said Williams. "We were proud to be chosen by Stewart to be their lender to partner on these totally electronic closings." Donna Peiser operates her real estate business online through the use of SureClose. With SureClose, Peiser is able to provide her home buyers and sellers a new level of service with instant online access to status of the transaction. Her office was one of the first in the area to use SureClose. "My buyers and sellers really like it and it makes it easier for me to get the deal done," said Peiser. About Stewart Stewart Title Co. and Stewart Title of Lake Jackson are wholly owned subsidiaries of Stewart Information Services Corp. (NYSE: STC), a customer-driven, technology-enabled, strategically competitive, real estate information, title insurance and transaction management company. Stewart provides title insurance and related information services required for settlement by the real estate and mortgage industries through more than 9,500 policy-issuing offices and agencies in the United States and international markets. Stewart also provides post-closing lender services, automated county clerk land records, property ownership mapping, geographic information systems, property information reports, flood certificates, document preparation, background checks and expertise in tax-deferred exchanges. More information can be found at http://www.stewart.com. Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=588691 Embedded Video Available: http://www2.marketwire.com/mw/release_html_b1?release_id=307827 Contact: Ted C. Jones Director-Investor Relations (713) 625-8014 ted@stewart.com
SOURCE: Stewart Title
Learn More About eMortgages at: http://www.closingprime.com/forum/forum.asp?FORUM_ID=7
An innovative cast of individuals in a growing community of 27,000 just 50 miles south of Houston is quietly making history with same-day service in residential real estate closings and recordings. A local real estate professional, lender and title agent all meet online via Stewart Title's (NYSE: STC) SureClose(R) to complete residential real estate closings -- allowing home buyers and sellers to receive their title policy, note and deed all on the same day as the purchase of their new home. Stewart Title of Lake Jackson produces the title commitment and the closing documents using the AIM(R) title production system and SureClose. As the transaction manager, Stewart Title invites real estate agents such as Real Estate Plus broker/owner Donna Peiser, lenders such as Texas Dow Employees Credit Union (TDECU), and home buyers and sellers online to SureClose to see the status of the transaction. "At Stewart Title we strive to provide the best possible closing experience by providing visibility of the process to all the parties, placing the accumulation of closing documents in a secure online-closing file and using our click-to-sign technology," said Stewart Morris Jr., president and chief executive officer, Stewart Title Co. "We make the closing a celebration that is easy, fun and more understandable," added Morris. In addition to SureClose, Stewart Title of Lake Jackson offers its customers the ability to close online using eClosingRoom(TM). Prior to the closing, buyers and sellers can go online at their convenience using their PC, and read and sign all their non-notarized closing documents in eClosingRoom. When they arrive at Stewart Title for the actual closing with the notary, e-signing the remaining documents takes about 17 minutes. After closing, the closing package remains online and is submitted to the Brazoria County Clerk via Stewart's e-recording software. "As long as I can close before 3 p.m., I can have the deed back before 5 p.m.," said Diane Ragsdale, branch manager, Stewart Title of Lake Jackson. "My customers are just blown away when I ask them at the closing table, 'Would you like your real estate agent to bring your deed by your home today, or would you like to come by and pick it up?' "We are now able to offer same-day service, and our customers enjoy the process, too," said Ragsdale. "We've been accepting e-recordings successfully for the past year," said Brazoria County Clerk Joyce Hudman. "For us, it has cut a four-step process down to one step. In addition, our filers know within 30 minutes whether their recording has been accepted or rejected and can make any corrections if necessary." The crucial part of the equation was finding the lender who would be a part of the process. Stewart Title found that in TDECU, a financial entity with more than 100,000 members and nearly $1.2 billion in assets. "I have an online mortgage application with a two-minute approval," said Loretta Williams, TDECU vice president of real estate lending. "Our members have the easiest access to their closing documents and can get with us prior to closing if they have any questions. People are busy and everything is moving toward electronic delivery. "I am proud to be a major player in making mortgage loans in this area," said Williams. "We were proud to be chosen by Stewart to be their lender to partner on these totally electronic closings." Donna Peiser operates her real estate business online through the use of SureClose. With SureClose, Peiser is able to provide her home buyers and sellers a new level of service with instant online access to status of the transaction. Her office was one of the first in the area to use SureClose. "My buyers and sellers really like it and it makes it easier for me to get the deal done," said Peiser. About Stewart Stewart Title Co. and Stewart Title of Lake Jackson are wholly owned subsidiaries of Stewart Information Services Corp. (NYSE: STC), a customer-driven, technology-enabled, strategically competitive, real estate information, title insurance and transaction management company. Stewart provides title insurance and related information services required for settlement by the real estate and mortgage industries through more than 9,500 policy-issuing offices and agencies in the United States and international markets. Stewart also provides post-closing lender services, automated county clerk land records, property ownership mapping, geographic information systems, property information reports, flood certificates, document preparation, background checks and expertise in tax-deferred exchanges. More information can be found at http://www.stewart.com. Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=588691 Embedded Video Available: http://www2.marketwire.com/mw/release_html_b1?release_id=307827 Contact: Ted C. Jones Director-Investor Relations (713) 625-8014 ted@stewart.com
SOURCE: Stewart Title
Learn More About eMortgages at: http://www.closingprime.com/forum/forum.asp?FORUM_ID=7
Countrywide eMortgages
Countrywide Home Loans Partners with RealEC Technologies to Deliver Online Closing Platform9:29a ET October 10, 2007 (PR NewsWire)
RealEC Technologies Inc., the leading provider of collaborative network solutions to the mortgage industry, today announced it has entered into an agreement with Countrywide Home Loans, Inc., a division of Countrywide Financial Corporation, allowing Countrywide to use RealEC's Web-based closing platform for mortgage refinance and home equity lending transactions. Through the new agreement, Countrywide has licensed RealEC's Web-enabled closing service and has integrated the service into its TS2 settlement services platform, which was built using the RealEC Collaborative Network Platform. "RealEC is extremely excited, once again, to partner with Countrywide Home Loans to bring another innovative new industry utility to market," said Dan Sogorka, president of RealEC Technologies. "We believe that by deploying incremental pieces of an e-mortgage solution, all parties can gain significant process efficiencies and align business and technology paths with true electronic collaboration." RealEC's Web-enabled closing service enables Countrywide to offer this new closing option as a convenience to its borrowers and have the resulting closing orders supported by its preferred title and closing providers nationwide. Countrywide's origination groups can place orders for the Web- enabled closing service with any title and closing service provider that is certified and available through the RealEC network. Those service orders then are fulfilled and completed through Countrywide's licensed version of the RealEC platform. "Countrywide is committed to continually delivering innovative new services that offer more convenience and flexibility to our customers," said Richard Marron, executive vice president of strategic partnerships for Countrywide Home Loans. "The Web-enabled closing service delivered through RealEC's Collaborative Network Platform will deliver these important benefits to our customers while leveraging our existing investment in our core settlement services platform. We view this as an important step toward offering our customers an increasingly electronic mortgage-fulfillment process." The service allows each title and closing provider supporting Countrywide to control the entire closing process, eliminating the need to coordinate with multiple third-party providers. As a result, the borrower may schedule the secure closing as early as possible during the application process. Also, since this closing session is Web-based, the borrower may participate from any geographic location. About RealEC Technologies Founded in 1998, RealEC Technologies provides supply chain management software, integration services, intelligent product decision tools, vendor sourcing tools and a robust B2B exchange for mortgage loan originators, real estate agents and settlement service providers. RealEC operates the RealEC Exchange(TM), the leading Electronic Partner Network (EPN) in the mortgage industry, and provides partner connectivity, automated vendor management, advanced data capture and document management services to more than 2,000 mortgage originators (including 17 of the top 20) and more than 13,000 service providers. RealEC's services enable lenders and their business partners to electronically connect, collaborate and automate their business processes to eliminate paper, manual processing and other sources of friction in the origination and servicing of mortgage loans. The company's products and services are designed to automate the origination, servicing, statusing and closing of real estate transactions and enable real estate transaction participants to significantly enhance their business by increasing operational efficiencies, improving customer service and generating new sources of revenue. RealEC Technologies has significant equity ownership from Fidelity National Information Services, Inc. (NYSE: FIS), Stewart Title Company (NYSE: STC), and LandAmerica Financial Group (NYSE: LFG). For more information, visit www.realec.com. About Countrywide Financial Corporation Founded in 1969, Countrywide Financial Corporation -- America's number one home loan lender as ranked for 2006 by Inside Mortgage Finance (Feb. 2, 2007) -- is a member of the S&P 500 and Fortune 500. Countrywide, through its subsidiaries, provides mortgage banking and diversified financial services in domestic and international markets. Mortgage banking businesses include loan production and servicing principally through Countrywide Home Loans, Inc., which originates, purchases, securitizes, sells and services residential loans. The company is headquartered in Calabasas, Calif., and has a workforce of more than 56,000 individuals and over 900 offices worldwide. For more information about the company, visit Countrywide's Web site at www.countrywide.com. SOURCE RealEC Technologies Inc.
Learn More About eMortgages at: http://www.closingprime.com/forum/forum.asp?FORUM_ID=7
RealEC Technologies Inc., the leading provider of collaborative network solutions to the mortgage industry, today announced it has entered into an agreement with Countrywide Home Loans, Inc., a division of Countrywide Financial Corporation, allowing Countrywide to use RealEC's Web-based closing platform for mortgage refinance and home equity lending transactions. Through the new agreement, Countrywide has licensed RealEC's Web-enabled closing service and has integrated the service into its TS2 settlement services platform, which was built using the RealEC Collaborative Network Platform. "RealEC is extremely excited, once again, to partner with Countrywide Home Loans to bring another innovative new industry utility to market," said Dan Sogorka, president of RealEC Technologies. "We believe that by deploying incremental pieces of an e-mortgage solution, all parties can gain significant process efficiencies and align business and technology paths with true electronic collaboration." RealEC's Web-enabled closing service enables Countrywide to offer this new closing option as a convenience to its borrowers and have the resulting closing orders supported by its preferred title and closing providers nationwide. Countrywide's origination groups can place orders for the Web- enabled closing service with any title and closing service provider that is certified and available through the RealEC network. Those service orders then are fulfilled and completed through Countrywide's licensed version of the RealEC platform. "Countrywide is committed to continually delivering innovative new services that offer more convenience and flexibility to our customers," said Richard Marron, executive vice president of strategic partnerships for Countrywide Home Loans. "The Web-enabled closing service delivered through RealEC's Collaborative Network Platform will deliver these important benefits to our customers while leveraging our existing investment in our core settlement services platform. We view this as an important step toward offering our customers an increasingly electronic mortgage-fulfillment process." The service allows each title and closing provider supporting Countrywide to control the entire closing process, eliminating the need to coordinate with multiple third-party providers. As a result, the borrower may schedule the secure closing as early as possible during the application process. Also, since this closing session is Web-based, the borrower may participate from any geographic location. About RealEC Technologies Founded in 1998, RealEC Technologies provides supply chain management software, integration services, intelligent product decision tools, vendor sourcing tools and a robust B2B exchange for mortgage loan originators, real estate agents and settlement service providers. RealEC operates the RealEC Exchange(TM), the leading Electronic Partner Network (EPN) in the mortgage industry, and provides partner connectivity, automated vendor management, advanced data capture and document management services to more than 2,000 mortgage originators (including 17 of the top 20) and more than 13,000 service providers. RealEC's services enable lenders and their business partners to electronically connect, collaborate and automate their business processes to eliminate paper, manual processing and other sources of friction in the origination and servicing of mortgage loans. The company's products and services are designed to automate the origination, servicing, statusing and closing of real estate transactions and enable real estate transaction participants to significantly enhance their business by increasing operational efficiencies, improving customer service and generating new sources of revenue. RealEC Technologies has significant equity ownership from Fidelity National Information Services, Inc. (NYSE: FIS), Stewart Title Company (NYSE: STC), and LandAmerica Financial Group (NYSE: LFG). For more information, visit www.realec.com. About Countrywide Financial Corporation Founded in 1969, Countrywide Financial Corporation -- America's number one home loan lender as ranked for 2006 by Inside Mortgage Finance (Feb. 2, 2007) -- is a member of the S&P 500 and Fortune 500. Countrywide, through its subsidiaries, provides mortgage banking and diversified financial services in domestic and international markets. Mortgage banking businesses include loan production and servicing principally through Countrywide Home Loans, Inc., which originates, purchases, securitizes, sells and services residential loans. The company is headquartered in Calabasas, Calif., and has a workforce of more than 56,000 individuals and over 900 offices worldwide. For more information about the company, visit Countrywide's Web site at www.countrywide.com. SOURCE RealEC Technologies Inc.
Learn More About eMortgages at: http://www.closingprime.com/forum/forum.asp?FORUM_ID=7
Friday, August 17, 2007
A Rising Star in Flagstar?
By Grant, Rick
This regional bank became a national powerhouse by harnessing technology.
Technology has long been a friend to mortgage bankers. In good times, when the market provides long lines of borrowers eager to refinance or buy new homes, technology offers the lender scale. When times are slow, technology helps lenders increase efficiencies and reduce costs as they weather the storm. * At Flagstar Bancorp Inc., Troy, Michigan, mortgage lending technology isn't just a friend- it's a trusted partner. While it serves to increase efficiencies and lower costs throughout this national wholesale lender's enterprise, that's not its primary purpose, according to Thomas J. Hammond, the company's founder and chairman. Technology at Flagstar isn't primarily about the company at all. It's about its customers.
Snapshot of a leader
It started out with Hammond Mortgage, Oak Hills Mortgage and First Security Mortgage, three small origination shops writing agency paper in the Midwest during the 1960s. But Hammond was an entrepreneur, and by 1987 he was successful enough to form a federal savings bank and rolled his mortgage assets into First Security Savings Bank, Bloomfield Hills, Michigan.
A community bank operating initially in Michigan, the enterprise expanded its branch banking operations into Indiana and Georgia, but pushed its mortgage unit-the core of its enterprise-much harder. By 1992, Thomas Hammond was providing loans on a wholesale basis to originators nationwide. That's when he encountered a problem.
It turned out there were a lot of financial services firms operating around the country during the 1990s that had 'security' in their names. In fact, in 1994, Hammond bought one when he acquired Security Savings Bank, Jackson, Mississippi, the firm's only acquisition to date.
Hammond realized that the company needed a new name-one that would distinguish it anywhere in the country. In 1996, the company name was changed to Ftagstar Bancorp from First Security to better reflect its diversified businesses and national reach.
Hammond took Flagstar public in 1997, and initially listed the company on the Nasdaq. By 2000, the firm relocated into a 380,000- square-foot facility in Troy, Michigan, where it is now headquartered. In 2001, Flagstar moved its listing to the New York Stock Exchange (NYSE). Today, it is included in the S&P (Standard & Poor's) Small Cap 600, Russell 2000 and NYSE Composite indexes.
According to Flagstar, in 2005 it originated $28 billion in mortgages, making it the seventh-largest loan seller to Fannie Mae. The company reports it originated $4.6 billion in the most recent quarter, ending Sept. 30, 2006.
The company currently services $24 billion in loans, including $14.8 billion in loans serviced for others, and is ranked a Tier One platinum servicer by Freddie Mac. It also holds a $1.3 billion commercial real estate servicing portfolio.
The majority of Flagstar's loan originations come in from a network of some 4,000 brokers (10,000 are approved), operating in all 50 states. These brokers delivered 57.1 percent of the bank's total production volume in 2005. In addition, Flagstar works with some 900 correspondent lenders across the country (1,500 are approved), which accounted for 28.7 percent of total originations in 2005.
Only 14.2 percent of its 2005 origination volume came from its banking centers, and the 90 additional home-loan centers it maintains in 22 states. But that is going to change. According to Hammond, his firm will be expanding its retail lending operations.
Flagstar's philosophy of technology
Talking to Flagstar executives about technology is like talking to them about customer service. In fact, it's exactly the same: They won't talk about one without the other.
'At the end of the day, it all comes down to customer service,' says W. Steven Brooks, Flagstar's executive vice president in charge of lending. He adds it's all about these questions: 'How are you providing service to your customers? And how do you measure that?'
At Flagstar, one of the most important metrics for measuring customer service is speed. Faster loan approvals and lower cycle times equate to more satisfied customers, and Flagstar knows it. To get that speed, the company declared war on paper more than a decade ago.
'This isn't something we started doing yesterday,' Brooks says. 'Tom [Hammond] talks about the paperless office today the same way he talked about it back in 1995.'
Technically speaking, Flagstar wasn't really paperless in 1995, but it was already on the road there. The bank was scanning documents in 1995, primarily for storage and retention. It wasn't until 1999 that it was capable of adding these scanned documents into an electronic workflow. Brooks says that was where the efficiencies really kicked in.
'It's not just scanning,' Brooks says. 'It's about capturing the documents and then doing something with them, routing them though your workflow to the people who need them.'
By 2000, the company was exporting images to investors. And by 2005, Flagstar had added a paperless file manager and the capability to auto-label incoming documents as part of a complete digital document-transfer platform.
According to Brooks, who started out with the company as a retail loan officer and worked his way up to a corner office, Flagstar doesn't tolerate paper and it won't listen to excuses related to it.
'Lost document?' he quips in response to one of the most common reasons for delays in the mortgage process. 'I haven't heard that one since 1995.'
While the Flagstar paperless back office may be 'legendary,' as one mortgage industry trade publication once put it, paperless lending initiatives are only one place technology is being employed in the bank.
Whether it's an innovative partner-rating system to allow Flagstar to rank its third-party loan originators or an online loan- status tool that has almost eliminated incoming broker information calls, the Flagstar philosophy is to apply technology to anything that will increase service levels to its customers-whether they be borrowers, brokers or correspondent lenders.
The Flagstar loan flow
Flagstar has systematically worked to make every part of the mortgage transaction electronic. Today, Flagstar's centralized mortgage loan-processing facility is paper-free. There are no paper files on the desks. There is no file room for them in the building. And there are no clerks to file them, lose them or find them again.
From the moment the loan enters the pipeline through to funding and post-closing, the file stays electronic.
Flagstar accomplishes this through full integrations with San Jose, California-based Calyx Software's, Dublin, California-based Ellie Mae Inc.'s and Kirkland, Washington-based Byte Software's loan origination systems (LOSes). Brooks says these three systems together serve the vast majority of the broker market. When a broker registers the loan with Flagstar, a single button uploads all the data from one of these three origination systems. If the broker uses a different loan origination system, a quick trip to Flagstar's interactive wholesale mortgage Web site provides a pull-down menu, allowing the broker to choose its LOS and upload the file to Flagstar in its native format. Bottom line: Flagstar employees almost never key in data.
Loan decisioning is handled by automated underwriting (AU) engines. Fraud and collateral valuation is handled by business logic that calls upon a customized version of Agoura Hills, California- based Interthinx's DISSCO^sup sm^ fraud tool and a cascade of 12 different automated valuation models (AVMs).
Flagstar processors are positioned in front of dual-screen computer displays, one showing the data provided electronically by the broker's LOS and the other showing an image of the original document providing those data. Making sure they match up is the primary function of the Flagstar mortgage loan underwriter. Instead of chasing paper around the office for a couple of weeks, Flagstar underwriters can approve a loan for funding in a couple of hours.
As a Flagstar underwriter confirms that the data in the system match the information on the scanned document, the loan is pushed further down the line toward closing. At the same time, a little checkmark appears on a special Web page the broker can use to check the ongoing status of the loan. The broker gets an e-mail automatically to confirm the checkmark is there.
For lenders on the path to paperless lending, Flagstar may sound like Nirvana. But according to Brooks, Flagstar isn't satisfied yet. Moving a loan through the system in two hours is good, but instantaneous is better.
He says brokers like to work electronically as the loan moves through the pipeline, but when the deal closes, almost all of Flagstar's 4,000 brokers hit the 'print' button and paper out. The same is true for the title companies and closing agents involved in the deals.
All the paper that the company has worked for 10 years to keep out of the process comes spitting back out of laser printers all over the country. It's a situation Flagstar is determined to change.
Taking the industry to the next level
Flagstar is ready \to take its business to the next level with an all-electronic loan-processing system it says can scale to handle $150 billion worth of mortgages-about three times the $56.4 billion the company originated at the peak of the most recent refi boom in 2003.
Of the 17 functions Flagstar has identified in the process of originating and funding a loan-from registering the loan through to post-closing-only two require Flagstar employees. The rest of the process is automated or dependent upon the broker.
Hammond believes this is important, as he senses another refinance boom in the near future. But as chairman of a publicly traded company, he's careful about his forward-looking statements.
Brooks talks about the scalability built into the company's lending platform as well, but he also points out that with nearly 85 percent of the company's loan volume currently coming from the wholesale and correspondent channels, Flagstar needs to help its partners gain the efficiencies that come from living fully in the paperless world. And he adds that the loan originators that work with Flagstar today are ready to go to that next level.
He points out that brokers clearly appreciate the work Flagstar has already done. The company received the highest average rating in providing electronic services to brokers, according to a 2004 survey of mortgage brokers sponsored by Inside Mortgage Finance and conducted by Campbell Communications Inc., Washington, D.C.
Brooks tells the story of how Flagstar offered to let correspondent lenders scan in their own closing documents and upload them to the Flagstar system automatically instead of faxing them in and then paying courier fees to send in the originals.
'When we made that available, it was surprising how many correspondent lenders took advantage of it,' Brooks says. 'It was clear that these efficiencies are important to brokers. With 37 percent of our customers scanning in the documents now, we know they're ready for the next step.'
In September, Flagstar opened up its digital document-transfer platform to correspondent lenders, allowing them to transfer files electronically regardless of the paperless solution they were using to get the electronic information-including those offered by Alpharetta, Georgia-based Advectis Inc.; Vienna, Virginia-based VirPack; and Hackensack, New Jersey-based PaperClip Software Inc. Today, nearly half of Flagstar's correspondent lenders are sending their loan packages in electronically.
Brooks says these initiatives have been 'wildly popular. [Loan originators] want to be paperless,' he adds.
But to get to the next level, the industry needs technology that hasn't been developed yet. So, Flagstar is beta testing its new eClosing module. Pilot programs with some of the bank's top customers are expected during the first quarter of 2007.
The institution is working with both Fannie Mae and Freddie Mac, and hopes to provide a system that will produce fully electronic mortgages by working seamlessly with some of the nation's top mortgage loan-closing systems, including those provided by Fiserv Inc., Brookfield, Wisconsin; The First American Corporation, Santa Ana, California; and Stewart Information Services Corporation, Houston.
'Our goal is to make our new eClosing platform compatible with any system,' Brooks says. 'We'd like it to be neutral.'
Brooks says Flagstar is the obvious lender to go completely paperless, because it already has most of the rest of the process digitized. In addition, the company's imaging platform is proven and scalable. Producing SMART Docs(TM) won't be much more difficult than the printer command language (PCL) that Flagstar is using today. All the bank will require in the short term is an original note, but Brooks says that will change when Flagstar decides what it will do for an eNote repository solution.
'We're working with both agencies to finalize the last pieces that we have to build,' Brooks says.
But even then, Flagstar won't be satisfied. The company is putting the finishing touches on an automated system to compare the HUD-1 settlement statement to the Truth-in-Lending Act (TILA) statement in post-closing, a process that now takes too much time and can lead to compliance problems if improperly performed.
'We have this whole automated service to empower all the players in the deal, but in funding we have to stop the transaction and look at the final HUD-1 and TILA statement to make sure they're in compliance,' Brooks says. 'It's another review step that can lead to delays at the closing table. Borrowers don't like delays at the closing table.'
When the new system goes into pilot this month, Flagstar will be able to send the title company an e-mail that includes an embedded link. The title company can then follow the link back to certify that the information in Flagstar's system matches what was signed at the closing table.
Looking toward the future
Like those in any publicly traded company, Flagstar executives get wary whenever they are asked about the future. But they'll still answer the question. During a presentation company management gave in September during its investor and analyst day, a number of initiatives and goals for the future were described.
First, the company wants to take its underwriting function to the next level. Having employees compare electronic data and imaging documents on side-by-side flat panels is good, but interactive loan underwriting with video conferencing would be better.
Second, the firm is dedicated to completing the work on its own eClosing platform that will allow the bank to more effectively handle loan closings around the country, making full use of electronic documents and eSignatures.
Finally, Flagstar is dedicated to helping the other loan originators it depends upon for loan volume to fully embrace electronic lending. In that respect, the company plans to be an evangelist for the paperless mortgage-waving its flag, so to speak, in the hope that other originators will rally to it and take the industry to the next level.
Brooks is positive about the outcome, because he says Flagstar customers already see the value and want the same efficiencies for themselves. But then, Brooks seems to be perennially positive when it comes to technology and its benefits, which is probably why he has advanced so far within Flagstar.
'I live it and breathe it,' he says. 'I'm one of those people on the business unit side who has always been a big believer in change.'
The Flagstar philosophy is to apply technology to anything that will increase service levels to its customers-whether they be borrowers, brokers or correspondent lenders.
'Our goal is to make our new eClosing platform compatible with any system,' Brooks says. 'We'd like it to be neutral.'
Rick Grant is a freelance writer based in Jim Thorpe, Pennsylvania. He specializes in writing about technology for the financial services industry. He can be reached at ricgrant@ptd.net.
This regional bank became a national powerhouse by harnessing technology.
Technology has long been a friend to mortgage bankers. In good times, when the market provides long lines of borrowers eager to refinance or buy new homes, technology offers the lender scale. When times are slow, technology helps lenders increase efficiencies and reduce costs as they weather the storm. * At Flagstar Bancorp Inc., Troy, Michigan, mortgage lending technology isn't just a friend- it's a trusted partner. While it serves to increase efficiencies and lower costs throughout this national wholesale lender's enterprise, that's not its primary purpose, according to Thomas J. Hammond, the company's founder and chairman. Technology at Flagstar isn't primarily about the company at all. It's about its customers.
Snapshot of a leader
It started out with Hammond Mortgage, Oak Hills Mortgage and First Security Mortgage, three small origination shops writing agency paper in the Midwest during the 1960s. But Hammond was an entrepreneur, and by 1987 he was successful enough to form a federal savings bank and rolled his mortgage assets into First Security Savings Bank, Bloomfield Hills, Michigan.
A community bank operating initially in Michigan, the enterprise expanded its branch banking operations into Indiana and Georgia, but pushed its mortgage unit-the core of its enterprise-much harder. By 1992, Thomas Hammond was providing loans on a wholesale basis to originators nationwide. That's when he encountered a problem.
It turned out there were a lot of financial services firms operating around the country during the 1990s that had 'security' in their names. In fact, in 1994, Hammond bought one when he acquired Security Savings Bank, Jackson, Mississippi, the firm's only acquisition to date.
Hammond realized that the company needed a new name-one that would distinguish it anywhere in the country. In 1996, the company name was changed to Ftagstar Bancorp from First Security to better reflect its diversified businesses and national reach.
Hammond took Flagstar public in 1997, and initially listed the company on the Nasdaq. By 2000, the firm relocated into a 380,000- square-foot facility in Troy, Michigan, where it is now headquartered. In 2001, Flagstar moved its listing to the New York Stock Exchange (NYSE). Today, it is included in the S&P (Standard & Poor's) Small Cap 600, Russell 2000 and NYSE Composite indexes.
According to Flagstar, in 2005 it originated $28 billion in mortgages, making it the seventh-largest loan seller to Fannie Mae. The company reports it originated $4.6 billion in the most recent quarter, ending Sept. 30, 2006.
The company currently services $24 billion in loans, including $14.8 billion in loans serviced for others, and is ranked a Tier One platinum servicer by Freddie Mac. It also holds a $1.3 billion commercial real estate servicing portfolio.
The majority of Flagstar's loan originations come in from a network of some 4,000 brokers (10,000 are approved), operating in all 50 states. These brokers delivered 57.1 percent of the bank's total production volume in 2005. In addition, Flagstar works with some 900 correspondent lenders across the country (1,500 are approved), which accounted for 28.7 percent of total originations in 2005.
Only 14.2 percent of its 2005 origination volume came from its banking centers, and the 90 additional home-loan centers it maintains in 22 states. But that is going to change. According to Hammond, his firm will be expanding its retail lending operations.
Flagstar's philosophy of technology
Talking to Flagstar executives about technology is like talking to them about customer service. In fact, it's exactly the same: They won't talk about one without the other.
'At the end of the day, it all comes down to customer service,' says W. Steven Brooks, Flagstar's executive vice president in charge of lending. He adds it's all about these questions: 'How are you providing service to your customers? And how do you measure that?'
At Flagstar, one of the most important metrics for measuring customer service is speed. Faster loan approvals and lower cycle times equate to more satisfied customers, and Flagstar knows it. To get that speed, the company declared war on paper more than a decade ago.
'This isn't something we started doing yesterday,' Brooks says. 'Tom [Hammond] talks about the paperless office today the same way he talked about it back in 1995.'
Technically speaking, Flagstar wasn't really paperless in 1995, but it was already on the road there. The bank was scanning documents in 1995, primarily for storage and retention. It wasn't until 1999 that it was capable of adding these scanned documents into an electronic workflow. Brooks says that was where the efficiencies really kicked in.
'It's not just scanning,' Brooks says. 'It's about capturing the documents and then doing something with them, routing them though your workflow to the people who need them.'
By 2000, the company was exporting images to investors. And by 2005, Flagstar had added a paperless file manager and the capability to auto-label incoming documents as part of a complete digital document-transfer platform.
According to Brooks, who started out with the company as a retail loan officer and worked his way up to a corner office, Flagstar doesn't tolerate paper and it won't listen to excuses related to it.
'Lost document?' he quips in response to one of the most common reasons for delays in the mortgage process. 'I haven't heard that one since 1995.'
While the Flagstar paperless back office may be 'legendary,' as one mortgage industry trade publication once put it, paperless lending initiatives are only one place technology is being employed in the bank.
Whether it's an innovative partner-rating system to allow Flagstar to rank its third-party loan originators or an online loan- status tool that has almost eliminated incoming broker information calls, the Flagstar philosophy is to apply technology to anything that will increase service levels to its customers-whether they be borrowers, brokers or correspondent lenders.
The Flagstar loan flow
Flagstar has systematically worked to make every part of the mortgage transaction electronic. Today, Flagstar's centralized mortgage loan-processing facility is paper-free. There are no paper files on the desks. There is no file room for them in the building. And there are no clerks to file them, lose them or find them again.
From the moment the loan enters the pipeline through to funding and post-closing, the file stays electronic.
Flagstar accomplishes this through full integrations with San Jose, California-based Calyx Software's, Dublin, California-based Ellie Mae Inc.'s and Kirkland, Washington-based Byte Software's loan origination systems (LOSes). Brooks says these three systems together serve the vast majority of the broker market. When a broker registers the loan with Flagstar, a single button uploads all the data from one of these three origination systems. If the broker uses a different loan origination system, a quick trip to Flagstar's interactive wholesale mortgage Web site provides a pull-down menu, allowing the broker to choose its LOS and upload the file to Flagstar in its native format. Bottom line: Flagstar employees almost never key in data.
Loan decisioning is handled by automated underwriting (AU) engines. Fraud and collateral valuation is handled by business logic that calls upon a customized version of Agoura Hills, California- based Interthinx's DISSCO^sup sm^ fraud tool and a cascade of 12 different automated valuation models (AVMs).
Flagstar processors are positioned in front of dual-screen computer displays, one showing the data provided electronically by the broker's LOS and the other showing an image of the original document providing those data. Making sure they match up is the primary function of the Flagstar mortgage loan underwriter. Instead of chasing paper around the office for a couple of weeks, Flagstar underwriters can approve a loan for funding in a couple of hours.
As a Flagstar underwriter confirms that the data in the system match the information on the scanned document, the loan is pushed further down the line toward closing. At the same time, a little checkmark appears on a special Web page the broker can use to check the ongoing status of the loan. The broker gets an e-mail automatically to confirm the checkmark is there.
For lenders on the path to paperless lending, Flagstar may sound like Nirvana. But according to Brooks, Flagstar isn't satisfied yet. Moving a loan through the system in two hours is good, but instantaneous is better.
He says brokers like to work electronically as the loan moves through the pipeline, but when the deal closes, almost all of Flagstar's 4,000 brokers hit the 'print' button and paper out. The same is true for the title companies and closing agents involved in the deals.
All the paper that the company has worked for 10 years to keep out of the process comes spitting back out of laser printers all over the country. It's a situation Flagstar is determined to change.
Taking the industry to the next level
Flagstar is ready \to take its business to the next level with an all-electronic loan-processing system it says can scale to handle $150 billion worth of mortgages-about three times the $56.4 billion the company originated at the peak of the most recent refi boom in 2003.
Of the 17 functions Flagstar has identified in the process of originating and funding a loan-from registering the loan through to post-closing-only two require Flagstar employees. The rest of the process is automated or dependent upon the broker.
Hammond believes this is important, as he senses another refinance boom in the near future. But as chairman of a publicly traded company, he's careful about his forward-looking statements.
Brooks talks about the scalability built into the company's lending platform as well, but he also points out that with nearly 85 percent of the company's loan volume currently coming from the wholesale and correspondent channels, Flagstar needs to help its partners gain the efficiencies that come from living fully in the paperless world. And he adds that the loan originators that work with Flagstar today are ready to go to that next level.
He points out that brokers clearly appreciate the work Flagstar has already done. The company received the highest average rating in providing electronic services to brokers, according to a 2004 survey of mortgage brokers sponsored by Inside Mortgage Finance and conducted by Campbell Communications Inc., Washington, D.C.
Brooks tells the story of how Flagstar offered to let correspondent lenders scan in their own closing documents and upload them to the Flagstar system automatically instead of faxing them in and then paying courier fees to send in the originals.
'When we made that available, it was surprising how many correspondent lenders took advantage of it,' Brooks says. 'It was clear that these efficiencies are important to brokers. With 37 percent of our customers scanning in the documents now, we know they're ready for the next step.'
In September, Flagstar opened up its digital document-transfer platform to correspondent lenders, allowing them to transfer files electronically regardless of the paperless solution they were using to get the electronic information-including those offered by Alpharetta, Georgia-based Advectis Inc.; Vienna, Virginia-based VirPack; and Hackensack, New Jersey-based PaperClip Software Inc. Today, nearly half of Flagstar's correspondent lenders are sending their loan packages in electronically.
Brooks says these initiatives have been 'wildly popular. [Loan originators] want to be paperless,' he adds.
But to get to the next level, the industry needs technology that hasn't been developed yet. So, Flagstar is beta testing its new eClosing module. Pilot programs with some of the bank's top customers are expected during the first quarter of 2007.
The institution is working with both Fannie Mae and Freddie Mac, and hopes to provide a system that will produce fully electronic mortgages by working seamlessly with some of the nation's top mortgage loan-closing systems, including those provided by Fiserv Inc., Brookfield, Wisconsin; The First American Corporation, Santa Ana, California; and Stewart Information Services Corporation, Houston.
'Our goal is to make our new eClosing platform compatible with any system,' Brooks says. 'We'd like it to be neutral.'
Brooks says Flagstar is the obvious lender to go completely paperless, because it already has most of the rest of the process digitized. In addition, the company's imaging platform is proven and scalable. Producing SMART Docs(TM) won't be much more difficult than the printer command language (PCL) that Flagstar is using today. All the bank will require in the short term is an original note, but Brooks says that will change when Flagstar decides what it will do for an eNote repository solution.
'We're working with both agencies to finalize the last pieces that we have to build,' Brooks says.
But even then, Flagstar won't be satisfied. The company is putting the finishing touches on an automated system to compare the HUD-1 settlement statement to the Truth-in-Lending Act (TILA) statement in post-closing, a process that now takes too much time and can lead to compliance problems if improperly performed.
'We have this whole automated service to empower all the players in the deal, but in funding we have to stop the transaction and look at the final HUD-1 and TILA statement to make sure they're in compliance,' Brooks says. 'It's another review step that can lead to delays at the closing table. Borrowers don't like delays at the closing table.'
When the new system goes into pilot this month, Flagstar will be able to send the title company an e-mail that includes an embedded link. The title company can then follow the link back to certify that the information in Flagstar's system matches what was signed at the closing table.
Looking toward the future
Like those in any publicly traded company, Flagstar executives get wary whenever they are asked about the future. But they'll still answer the question. During a presentation company management gave in September during its investor and analyst day, a number of initiatives and goals for the future were described.
First, the company wants to take its underwriting function to the next level. Having employees compare electronic data and imaging documents on side-by-side flat panels is good, but interactive loan underwriting with video conferencing would be better.
Second, the firm is dedicated to completing the work on its own eClosing platform that will allow the bank to more effectively handle loan closings around the country, making full use of electronic documents and eSignatures.
Finally, Flagstar is dedicated to helping the other loan originators it depends upon for loan volume to fully embrace electronic lending. In that respect, the company plans to be an evangelist for the paperless mortgage-waving its flag, so to speak, in the hope that other originators will rally to it and take the industry to the next level.
Brooks is positive about the outcome, because he says Flagstar customers already see the value and want the same efficiencies for themselves. But then, Brooks seems to be perennially positive when it comes to technology and its benefits, which is probably why he has advanced so far within Flagstar.
'I live it and breathe it,' he says. 'I'm one of those people on the business unit side who has always been a big believer in change.'
The Flagstar philosophy is to apply technology to anything that will increase service levels to its customers-whether they be borrowers, brokers or correspondent lenders.
'Our goal is to make our new eClosing platform compatible with any system,' Brooks says. 'We'd like it to be neutral.'
Rick Grant is a freelance writer based in Jim Thorpe, Pennsylvania. He specializes in writing about technology for the financial services industry. He can be reached at ricgrant@ptd.net.
Wednesday, August 15, 2007
Fannie Mae says, "eMortgages are sooo yesterday!"
Industry Getting Arms Around eMortgage Cost SavingsMurray, MichaelNEW YORK—A loan through Fannie Mae’s desktop underwriting using electronic loan delivery (eLoan Delivery) into the secondary market could provide cost savings of up $350 per loan if the loan closed the same day, according to Christos Bettios, the company’s senior portfolio manager.
“[Electronic] mortgages for Fannie Mae are no longer a new thing or a pilot,” Bettios said here at the Mortgage Bankers Association’s National Secondary Market Conference & Expo. “For us, this is not a new thing.” Bettios said faster funding through eLoan Delivery has been placed at $35 to $200 cost savings with same-day origination, closing and sale of the loan. Savings on operational costs could range from $80 to $150 per loan through automation. Bettios also estimated six to nine months for implementation. With industry-wide data standards, an interface from lenders to investors could be a one-time fee. The costs to change processes in report closings are “good kind of costs” because they provide long-term savings in quality assurance. Not simple to buy piece of software, plug it in and make it rumble, Bettios said. Harry Gardner, senior director of industry technology at MBA, said it is not always easy for lenders to quantify cost savings, but said he knows of at least one warehouse lender that keeps production through FedEx delivery in paper notes. In cases of bad weather, such as a snowstorm, the warehouse lender needs to spend the day speaking to correspondents on whether to take greater risks in waiting on the notes. An electronic note (eNote), Gardner noted, would arrive electronically, without dependence on paper delivery. Additionally, an eNote process gives immediate cost savings in delivery to Fannie Mae and Freddie Mac. “There is great savings potential,” Gardner said. “In some cases it is difficult to quantify. In some cases, there are obvious savings.” Implementation costs—expensive a few years ago—are changing because service providers charge on a transaction basis, said Brian Blair, senior vice president of sales at Wayne, Pa.-based GHR Systems, a subsidiary of Metavante Inc. After closing, the Mortgage Electronic Registry System (MERS) receives the electronic document—the eNote—by providing standard delivery of the eNote from one member to another. An existing MERS interface eliminates custom B2B interfaces. MERS, however, is not a vault storing the eDocument, according to Gardner. “Everyone is integrating with everyone else through proprietary interfaces,” Gardner said. “MERS has central ‘spoke and hub architecture’ for eDocs to move back and forth among partners.” The eNote is then registered on MERS eRegistry, a national eNote registry that is the central location to identify the current controller and location of the authoritative copy of an eNote. An eNote registered on MERS eRegistry keeps track of the owner of the eNote. The post-closing eRecording phase can happen in near real-time because documents are moving electronically, Gardner said. Quality assurance can certify eNotes faster, eliminating rekeying with fewer mistakes. Rather than “stare and compare,” data would be populated on the back-end with greater transparency into the depth of the loan and data quality. With an eNote acquired and traded in minutes, investors are also able to buy a loan faster at best execution and lower risk, Gardner said. “The data is immediately in our hand,” Bettios added. Fannie Mae has acquired eNotes from 1,000 or more lenders by sharing its best practices and guidelines with lenders. In a recent survey by Fannie Mae, 72 percent of its lenders expect to implement some form of electronic signatures (eSignatures) and nearly 45 percent of respondents expect their companies to implement eMortgages. Fannie Mae forecasts a “critical mass’ of lenders moving to eMortgages in the next three years, Bettios said. Gardner said hybrid loans are likely for some time with eNotes and paper closing documents. Custodians must manage paper or eDocuments for the same loan, and hybrid pools would include eNotes and paper notes. “The revolutionary move is toward an electronic note on the outset. Typically, with the signing pad, it is the legal document that is being delivered,” Gardner said. To gain the full eMortgage landscape and liquidity, more investors are integrating into loan origination systems and are becoming electronically enabled, according to Gardner. Electronic file transmission and shipping can be integrated into a loan origination system. Blair said Metavante has several clients that want a “lights-out processing” requirement, which includes minimum staff for processing a loan. Bettios said Fannie Mae’s eCommitONE for lenders to commit to a price does not incur pair-off fees if a loan falls out of the pipeline and it provides a window for loan officers to lock in a rate by 10 p.m. If closed and received, the commitment price is given to the lender With eDocuments, data and the view of information combine through SMART Docs, allowing the borrower to see and sign the documents, but it also provides data payload capability. It provides almost immediate quality assurance capabilities for investors and data in XML data payload links to signed eDocs. Automated underwriting at point-of-sale is a cost savings of $1,025, and costs of direct servicing are 50 percent less than the 1980s, with 2 percent to 5 percent errors. Blair said GHR Systems works with more than one appraisal vendor, and GHR could implement other proprietary data interfaces, although it would save costs to the entire industry for one standard interface. A study by MISMO said XML data standards alone could save $240 per loan transaction. Blair said GHR supports MISMO XML standards and the automated appraisal process. Bettios said the new servicer of electronic notes, if not already enabled electronically, will eventually need to become e-enabled. Fiserv, Encomia, Settleware, Digital Docs and Document Processing System are live on the eMERS Registry system. The combination of an eClosing—using eSignatures and eDocuments—provides borrowers with secure access well in advance of the closing for borrowers to find any mistakes prior to closing, rather than taking the time at closing to initial errors. The electronic notarization (eNotarization) is the same as notarizing in the paper world, but the notary seal is in electronic format. “For eSignatures, the intent to sign must be clear,” Gardner said. “The signer must agree in advance to use electronic documents and electronic signatures.” A Public Key Infrastructure (PKI) seal—a digital thumbprint on the eDocument—provides security. The eMERS Registry stores a “hash value,” protected with the PKI thumbprint and MERS confirms the eDocument was received and is identical to the document received by the borrower at the closing table. The eNotes include fixed-rate and ARM products. “When Fannie Mae talks about eMortgages, we mainly care about the eNote,” Bettios said. As sellers send loans to investors on a post-analysis basis, they provide variance-based expectations as data would populate an investor’s software to schedule and track cost expense guidelines. In an automated environment, investors could create any forms and retain that data, and investors would manipulate unrekeyed data to determine risks and costs. MISMO industry data standards would again prevent added costs to create new interfaces for each investor. “Electronic reporting is the next advent to get to with this type of technology,” Blair said. “We are still struggling with clients who do not want to uphold the [data] standards but they are certainly there.” Even with MISMO XML data industry standards, which would reduce costs to create separate interfaces for all investors, some investors do not necessarily want to comply with the standards. “I do see a need of custom forms and some institutions are feeling they need to be unique or different,” Blair said. Quality assurance departments could verify borrowers with automated compliance alerts to ensure loans meet certain thresholds on the front end, and they can provide exception alerts to management in shorter time frames, according to Blair. County recorders continue to adopt electronic recording (eRecording) capabilities and they are increasing through the Property Records Industry Association (PRIA). While there are 3,600 counties and municipal entities, the “80/20 rule” applies, as nearly 300 counties account for 80 to 90 percent of mortgages across the country. A statewide eRecording portal has been created to integrate eRecorders at the end of the origination process. New Jersey, for example, has taken to the statewide portal and it is offered for free to any other state government willing to use it.
“[Electronic] mortgages for Fannie Mae are no longer a new thing or a pilot,” Bettios said here at the Mortgage Bankers Association’s National Secondary Market Conference & Expo. “For us, this is not a new thing.” Bettios said faster funding through eLoan Delivery has been placed at $35 to $200 cost savings with same-day origination, closing and sale of the loan. Savings on operational costs could range from $80 to $150 per loan through automation. Bettios also estimated six to nine months for implementation. With industry-wide data standards, an interface from lenders to investors could be a one-time fee. The costs to change processes in report closings are “good kind of costs” because they provide long-term savings in quality assurance. Not simple to buy piece of software, plug it in and make it rumble, Bettios said. Harry Gardner, senior director of industry technology at MBA, said it is not always easy for lenders to quantify cost savings, but said he knows of at least one warehouse lender that keeps production through FedEx delivery in paper notes. In cases of bad weather, such as a snowstorm, the warehouse lender needs to spend the day speaking to correspondents on whether to take greater risks in waiting on the notes. An electronic note (eNote), Gardner noted, would arrive electronically, without dependence on paper delivery. Additionally, an eNote process gives immediate cost savings in delivery to Fannie Mae and Freddie Mac. “There is great savings potential,” Gardner said. “In some cases it is difficult to quantify. In some cases, there are obvious savings.” Implementation costs—expensive a few years ago—are changing because service providers charge on a transaction basis, said Brian Blair, senior vice president of sales at Wayne, Pa.-based GHR Systems, a subsidiary of Metavante Inc. After closing, the Mortgage Electronic Registry System (MERS) receives the electronic document—the eNote—by providing standard delivery of the eNote from one member to another. An existing MERS interface eliminates custom B2B interfaces. MERS, however, is not a vault storing the eDocument, according to Gardner. “Everyone is integrating with everyone else through proprietary interfaces,” Gardner said. “MERS has central ‘spoke and hub architecture’ for eDocs to move back and forth among partners.” The eNote is then registered on MERS eRegistry, a national eNote registry that is the central location to identify the current controller and location of the authoritative copy of an eNote. An eNote registered on MERS eRegistry keeps track of the owner of the eNote. The post-closing eRecording phase can happen in near real-time because documents are moving electronically, Gardner said. Quality assurance can certify eNotes faster, eliminating rekeying with fewer mistakes. Rather than “stare and compare,” data would be populated on the back-end with greater transparency into the depth of the loan and data quality. With an eNote acquired and traded in minutes, investors are also able to buy a loan faster at best execution and lower risk, Gardner said. “The data is immediately in our hand,” Bettios added. Fannie Mae has acquired eNotes from 1,000 or more lenders by sharing its best practices and guidelines with lenders. In a recent survey by Fannie Mae, 72 percent of its lenders expect to implement some form of electronic signatures (eSignatures) and nearly 45 percent of respondents expect their companies to implement eMortgages. Fannie Mae forecasts a “critical mass’ of lenders moving to eMortgages in the next three years, Bettios said. Gardner said hybrid loans are likely for some time with eNotes and paper closing documents. Custodians must manage paper or eDocuments for the same loan, and hybrid pools would include eNotes and paper notes. “The revolutionary move is toward an electronic note on the outset. Typically, with the signing pad, it is the legal document that is being delivered,” Gardner said. To gain the full eMortgage landscape and liquidity, more investors are integrating into loan origination systems and are becoming electronically enabled, according to Gardner. Electronic file transmission and shipping can be integrated into a loan origination system. Blair said Metavante has several clients that want a “lights-out processing” requirement, which includes minimum staff for processing a loan. Bettios said Fannie Mae’s eCommitONE for lenders to commit to a price does not incur pair-off fees if a loan falls out of the pipeline and it provides a window for loan officers to lock in a rate by 10 p.m. If closed and received, the commitment price is given to the lender With eDocuments, data and the view of information combine through SMART Docs, allowing the borrower to see and sign the documents, but it also provides data payload capability. It provides almost immediate quality assurance capabilities for investors and data in XML data payload links to signed eDocs. Automated underwriting at point-of-sale is a cost savings of $1,025, and costs of direct servicing are 50 percent less than the 1980s, with 2 percent to 5 percent errors. Blair said GHR Systems works with more than one appraisal vendor, and GHR could implement other proprietary data interfaces, although it would save costs to the entire industry for one standard interface. A study by MISMO said XML data standards alone could save $240 per loan transaction. Blair said GHR supports MISMO XML standards and the automated appraisal process. Bettios said the new servicer of electronic notes, if not already enabled electronically, will eventually need to become e-enabled. Fiserv, Encomia, Settleware, Digital Docs and Document Processing System are live on the eMERS Registry system. The combination of an eClosing—using eSignatures and eDocuments—provides borrowers with secure access well in advance of the closing for borrowers to find any mistakes prior to closing, rather than taking the time at closing to initial errors. The electronic notarization (eNotarization) is the same as notarizing in the paper world, but the notary seal is in electronic format. “For eSignatures, the intent to sign must be clear,” Gardner said. “The signer must agree in advance to use electronic documents and electronic signatures.” A Public Key Infrastructure (PKI) seal—a digital thumbprint on the eDocument—provides security. The eMERS Registry stores a “hash value,” protected with the PKI thumbprint and MERS confirms the eDocument was received and is identical to the document received by the borrower at the closing table. The eNotes include fixed-rate and ARM products. “When Fannie Mae talks about eMortgages, we mainly care about the eNote,” Bettios said. As sellers send loans to investors on a post-analysis basis, they provide variance-based expectations as data would populate an investor’s software to schedule and track cost expense guidelines. In an automated environment, investors could create any forms and retain that data, and investors would manipulate unrekeyed data to determine risks and costs. MISMO industry data standards would again prevent added costs to create new interfaces for each investor. “Electronic reporting is the next advent to get to with this type of technology,” Blair said. “We are still struggling with clients who do not want to uphold the [data] standards but they are certainly there.” Even with MISMO XML data industry standards, which would reduce costs to create separate interfaces for all investors, some investors do not necessarily want to comply with the standards. “I do see a need of custom forms and some institutions are feeling they need to be unique or different,” Blair said. Quality assurance departments could verify borrowers with automated compliance alerts to ensure loans meet certain thresholds on the front end, and they can provide exception alerts to management in shorter time frames, according to Blair. County recorders continue to adopt electronic recording (eRecording) capabilities and they are increasing through the Property Records Industry Association (PRIA). While there are 3,600 counties and municipal entities, the “80/20 rule” applies, as nearly 300 counties account for 80 to 90 percent of mortgages across the country. A statewide eRecording portal has been created to integrate eRecorders at the end of the origination process. New Jersey, for example, has taken to the statewide portal and it is offered for free to any other state government willing to use it.
The Plot Thinkens
Without a doubt Amtrust Bank (formerly Ohio Savings Bank) has been the "dark horse" in the eMortgage race. Offering their eSign product to brokers was a major event in the development of the Paperless Mortgage (eMortgage: See my definition on wiki.)
The other "Big Boys" of the wholesale lending universe have been watching, plotting their marketing strategies, investing tens of millions of dollars behind the scenes to be the undisputed winner of this race.
It seems the finish line is drawing near. We've got Amtrust leading the race, Citi, Flagstar and Wells Fargo are looking strong (Still have no confirmed reports that BofA is even in the race.) By all accounts and from my discussions with the industry players expect a winner to be declared in the 1st Quarter of 2008.
Amercian Home Mortgage (ABC to you wholesale folks) is defiantly out of the race. But, someone may step in to pick up the pieces. I'm told they were working quite diligently on an eMortgage solution and depending on what they put together that could be a very attractive asset. From what I understand the technology solutions that InterFirst put together was one of the primary motivating factors behind Citi Banks acquisition of them.
To summarize. We've got Amtrust leading the race, AHM is out and we've got Citi, Flagstar and Wells Fargo pacing Amtrust, all looking to take the lead in this home stretch.
It is my hope that when I attend the MISMO conference in Houston next month I will have a chance to talk with all the participants (on the record) and update the leader board for all you folks interested in this Great American eMortgage Race.
If you have not done so already...place your bets now.
The other "Big Boys" of the wholesale lending universe have been watching, plotting their marketing strategies, investing tens of millions of dollars behind the scenes to be the undisputed winner of this race.
It seems the finish line is drawing near. We've got Amtrust leading the race, Citi, Flagstar and Wells Fargo are looking strong (Still have no confirmed reports that BofA is even in the race.) By all accounts and from my discussions with the industry players expect a winner to be declared in the 1st Quarter of 2008.
Amercian Home Mortgage (ABC to you wholesale folks) is defiantly out of the race. But, someone may step in to pick up the pieces. I'm told they were working quite diligently on an eMortgage solution and depending on what they put together that could be a very attractive asset. From what I understand the technology solutions that InterFirst put together was one of the primary motivating factors behind Citi Banks acquisition of them.
To summarize. We've got Amtrust leading the race, AHM is out and we've got Citi, Flagstar and Wells Fargo pacing Amtrust, all looking to take the lead in this home stretch.
It is my hope that when I attend the MISMO conference in Houston next month I will have a chance to talk with all the participants (on the record) and update the leader board for all you folks interested in this Great American eMortgage Race.
If you have not done so already...place your bets now.
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