May 6, 2004

Working hard on your next issue of RETI and its coming together. So much collateral valuation news to report in this issue. I met with the Collateral Assessment and Technologies committee at the recent REIPA and NPRRA joint conference. Since then, October Research Corporation aired its AVM Nation eRadio show, which they were kind enough to let me host. And today, you'll find a bunch of news on the site from AVM developers.

This is a critical time for people working in this part of the industry. It seems like somebody somewhere pulled the chain and we've seen a bunch of legislative activity coming down the pike that affects our industry, from predatory lending laws springing up all over the country to privacy legislation. The last thing AVM developers need is some new legislation designed to protect investors that inadvertently makes it more difficult to sell their products to certain lenders. I don't think there's anything anyone can do to get home equity lenders to quit saving money and time by abandoning AVMs. But both lenders and vendors would like to see these tools used in more parts of the business. That won't happen as long as we don't have uniform testing and reporting standards that will make investors (which means the ratings agencies) comfortable with the tools.

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May 5, 2004

Spoke with Jorge Sauri, president of VueCentric recently. Sauri gave me some insight for an article we're putting together for a future issue of RETI. We talked about the difference between open source and open architecture. Many vendors talk about the latter as if it were the former, but it's not. Open source has been getting plenty of positive press as more big companies get on the Linux bandwagon. In fact, a bunch of them will be sharing their success stories at LinuxWorld this summer. But Sauri reminded me that while open architectures offer the cross-platform functionality that helped make Java so popular, they are not necessarily built with open source tools. In fact, VueCentric built its MortgageDashboard and BundleOne tools with Microsoft's .NET. GHR and Dorado are among many others in the industry who are now developing with the MS toolset. We'll talk more about these tools in an upcoming issue of the newsletter.

By the way, Happy Cinco de Mayo.

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May 4, 2004

I was impressed with Fidelity's move to invest in an offshore outsourcing firm. The company has been criticized in the past for buying up more companies than they can effectively integrate. Like their chief competitors in the title insurance space, Fidelity embarked on this strategy years ago when bundled services meant one-stop-shop instead of electronic partner network. But integrating companies is a lot harder than many people think. Even so, I was very impressed with the way the company pulled in Alltel's mortgage business without having it fly apart on them. I'm very interested in seeing what they can do with a company that can reportedly give them access to the power of India's IT workforce. I'll be talking to them soon about this in an attempt to find out what projects they'll start with.

The newly chartered Collateral Assessment and Technologies committee (CATC) within the Real Estate Information Professionals Association (REIPA) came out with a release today in response to a letter Fitch released cautioning lenders and investors about using AVMs in markets subject to falling home prices. As CATC pointed out in its release, Fitch didn't limit its comments to automated valuation models, but referred to any method of valuing real estate other than a full appraisal. CATC's comments will be up on the site shortly. Of course, one would not expect CATC to let such remarks pass unchallenged. At this point, the committee is made up of AVM developers and resellers (Countrywide is on the committee but primarily for its LandSafe division). Still, both sides had some interesting things to say. We'll be talking to both sides, as well as the Collateral Risk Management Consortium, a group working in this area and made up of lenders but funded by FNC. I called Fitch today but the call has not been returned yet.

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May 3, 2004

Well, it's May. Hope it didn't catch you by surprise. This year is streaking by, or am I just getting older. Don't worry, you can count on RETI to keep you up to date.

There are a few interesting events coming up this month. Next week, the National Association of Realtors will be having their mid-year meeting in Washington. The week after that, Boston-based TowerGroup will host a financial services conference in its hometown and then later this month, Fidelity National Financial's subsidiary, LSI, will be hosting its Emerging Trends conference. We'll give you more information about all of these events as we get closer and then we'll report on them if they make any news. And they likely will.

Visited with Glenn Ford, founder of Allregs, late last week. His company operates a website that provides wholesale lending guidelines and other information for mortgage lenders, including the electronic loan manuals for the GSEs. Recently, the company began offering recording fees for every county in the country on its site. Ford let me demo the tool and I found it quite impressive. But it's still a manual tool; you go to the site, key in the information or make choices from a menu and then get your results. To enable effective eRecording, this will have to be automated.

Ford didn't say what progress his company plans to make in that area, but judging from the other tech tools Allregs has provided (like customized virtual sticky notes that can be placed in online manuals by managers and then read by loan officers throughout the company), I wouldn't be surprised if they didn't offer something quite interesting soon.

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