Suddenly, Default Management and REO Technology Really Matters
HW readers will recall reading on this blog how more than a few niche technology providers on the origination side of the business are looking to exit. At the time, I'd noted how the default management technology niche was booming. A company called NextAce is another example of how mortgage technology companies are now looking to exploit the needs that many foreclosure and REO departments now have -- namely, how can we hit a timeline when we've got too many damn properties coming in? NextAce, a localized provider of title automation technology, said today that it has extended its automated title and services platform, called TitleEDGE, into the foreclosure market. The company said its TitleEDGE REO and Mortgage Default products are currently in production in California and Texas, with production soon to follow in Arizona, Florida, Hawaii, Nevada, New York, Ohio and Washington -- apparently, on the refinance and purchase side of the title industry, NextAce claims its software is used by four of the nation's big five title underwriters. From the press release:
"By automating their foreclosure process title insurers can now deliver a faster and more consistent product while reducing their associated production costs. In addition, their lenders are able to capitalize on these process improvements with faster turn times," said NextAce CEO Don Cantral.The company claims its software reduces title production time to under one hour on average, including automating the search and examination of recorded documents, real property information, general index detail, liens, judgments, and probate issues. The real interesting thing here is that the default technology space had been long forgotten by most in the mortgage industry (look at Mortgage Technology's 2007 rankings of the nation's top 50 mortgage tech firms -- only one company considered a specialist in default management technology made the list). Something tells me the 2008 list will look much different. The competitive landscape in the default management industry looks as if it might change as well, not only because more competitors are now viewing that segment of the industry as viable, but also because many of the existing players in the industry have utilized outdated and feature-poor technology that reflected default management's traditional status as a cost center. Let's just say that I know what I'm talking about here: way back in 2000, I helped to build a niche Web-based platform used to manage a key aspect of the REO disposition process for lenders. And I've watched as that platform has since evolved to become one of the industry's best examples of distributed workflow and process management, driving what in this market are huge cost savings for some of the nation's largest loan servicers -- but at the time, very few cared and even fewer would pay to use it. Let's just say that song has changed tunes (and I really wish now that I'd negotiated for royalties then).