Rick Grant & Associates

DocuSign reports that Wells Fargo Funding is accepting disclosure documents signed with its electronic signature offering and suggests that it is a sign of growing adoption in the space. DocuSign is now on the bank’s approved electronic signature vendor list.

While adding a vendor to a list may not really indicate growing acceptance, I do believe that electronic signatures are going to be more important to lenders and servicers this year as they work to trim more expense out of the transaction. The MBA, in association with Encomia, has already shown that electronic signatures will reduce hard expenses related to printing, mailing and sorting documents.

DocuSign has been a strong player in this area for some time. There are a number of other vendors that have been offering electronic disclosures for quite some time now.

Previously, I pointed out in this space that Zaio was working with GMAC-ResCap in its appraisal management division. PCVMurcor Real Estate Services, a Pomona, Calif.-based vendor management firm is also approved for that lender program, I have been told by the company.

GMAC has been developing Propertywise for a number of years. The new announcements come in the wake of a new Code for appraisal management advanced by the GSEs and resulting from discussions with New York’s attorney general.

As loan volumes continue to fall, more technology vendors are working to extend their functionality to other markets. Now, the US government’s Small Business Administration is offering up an opportunity.

The U.S. Small Business Administration is looking for innovative ideas from the lending and business communities on ways to leverage its Web presence to establish a new e-commerce portal to help expand credit availability for businesses and give lenders increased access to new potential small business customers.

SBA’s site logs approximately 1.9 million visitors per month. With that goal in mind, the SBA has issued a Request for Information, RFI, from potential vendors on setting up a sustainable online lending portal that would connect small business loan applicants with commercial lenders.

The portal would allow business users to enter relevant information regarding their financing needs and key financial and performance information critical to an underwriter’s decision. The portal would then facilitate matching interested lenders with prospective borrowers.

“SBA’s mission is to support the nation’s economy by helping small businesses start, grow and expand, and a substantial part of that mission is met by our providing financial assistance,” said SBA Administrator Steve Preston. “This portal will expand the ability of small businesses to access credit programs and of lenders to access a broader range of potential lenders.”

There is one catch. An RFI is not an official solicitation and no contract will be awarded on the basis of this information, according to the SBA. So, just think of it as if you were working for free, which may be better than not working at all. Besides, if the specifications, pricing strategy, and project management ideas you submit get SBA’s attention, there may be a bona fide opportunity here.

SBA suggests that interested parties address User Friendliness and Transparency, Market Coverage, Privacy Policy, Pricing Structure, Revenue Sharing, Timeline, and Risks.

I’ll add a few they may later determine they are interested in: educational content strategy, development and delivery of co-branded marketing material from within the portal, social networking functionality for member banks (B2B) and consumers (B2C), online community management.

For additional information, visit http://www.fedbizopps.gov/.

Technology adoption has always posed a struggle for companies on the cutting edge. I’ve spoken to so many CTOs who have told me they see a vision leading to a better company or customer experience, but just can’t get the cats all marching in the same direction.

HousingWire carried a story today about MetLife, Inc. and its plan to buy EverBank Reverse Mortgage LLC of Bloomfield, NJ, in the hopes of rapidly growing its reverse mortgage lending business. If this is just another story of a rich insurance company buying into a niche lending operation when the market makes the deal attractive, then it makes a lot of sense to me. The company could easily staff up the reverse lender with some of the many mortgage pros that are now available for work and the plan should work out fine. But if they hope to get their insurance agents to add the product to their existing menu, it probably won’t work.

I was on the phone last week with a vendor who was lamenting the fact that it had sold hundreds of seats of its loan origination software to a bank owned by an insurance company that hoped to deploy the LOS to its insurance agents. The plan was that they would add simple mortgages, probably HELOCs, to their menu of products and originate like crazy. It didn’t happen and now the vendor is worried that the contract won’t be renewed due to lack of adoption.

This morning I was talking with another vendor who had sold an excellent document-related technology to a major property and casualty underwriter but then couldn’t get the insurance company to deploy the software through to its agent offices. Adoption is a huge problem in the insurance space.

Getting successful insurance agents to focus on a promising new technology in the hope of possible commissions at the expense of focusing on existing products that are already generating commissions is pretty much a waste of time. My brother is an agent. I have logged hundreds of hours listening to him tell me how much he could make if he sold this combination of products to this market or that combination to that other market. He, like the insurance companies he generates policies for, knows exactly how much he will make for exactly how long (at least until the companies change their rules) for every product in his briefcase. He spends his time where he can make the most money.

Metlife may do fine, as it already owns a bank and may just inlcude Everbank’s reverse mortgages as a new origination channel. But if the company is hoping to turn the nation’s insurance agents into mortgage originators, they’ll probably need a bigger plan.

Despite the downturn in the market, mortgage technology vendor PCLender.com reports that it has completed a service auditor’s review, commonly known as a SAS 70 Type II audit, of its InHouse Mortgage (IHM) and PCApproved applications.

The company provides a fully hosted web based software and services solution to mid-sized mortgage bankers and financial institutions.

The audit was performed by SAS 70 Solutions, a nationally recognized independent auditing firm, and was completed in January, 2008. Included in the scope of the audit were PCLender.com, Inc.’s customer service control activities, as well as the general controls that support these activities.

SAS 70 is an acronym for the American Institute of Certified Public Accountants (AICPA) Statement on Auditing Standard (SAS) No. 70, titled “Reports on the Processing of Transactions by Service Organizations.” SAS No. 70 defines the professional standards used by a service auditor to assess the internal controls of a service organization and issue a service auditor’s report.

“PCLender.com management understands the ever increasing importance of corporate governance, as well as the impact of our services on our clients’ system of internal controls,” said PCLender.com founder and president Lionel Urban. “The successful completion of the 2008 SAS 70 Type II audit is only part of PCLender.com’s continued commitment to maintaining a high level of internal control. PCLender.com, Inc. has engaged its service auditor to a long-term contract whereby PCLender.com, Inc. will undergo a Type II audit on an annual basis.”

It’s good to see vendors doing what’s necessary to keep their offerings viable, even when times are challenging.

Zillow has now launched its mortgage offering, which is more of a social network for borrowers in search of a loan than anything else. The company will allow lenders who pay it a $25 fee to provide free information to lenders interested in a loan, subject to certain rules.

The news is getting plenty of play around the blogosphere. I don’t want to go over the same ground, but a couple things spring to mind that should be considered by any lender that chooses to work with Zillow.

First, Zillow reserves the right to work with an unnamed third party to perform due diligence on a lender before allowing admission to the network. Part of this work will involve “checking standard sources for complaints or comments.” Not sure what these sources are, but should something bad come up (say the lender was sued by ACORN or something), then instead of gaining access to free leads, the lender could be saddled with the stigma of “banned from Zillow!”

Secondly, in order to get access to borrowers, the lender must create a public profile and accept any and all comments from the community. Most lenders don’t have community managers for their own Internet lead generation efforts, but now any lender that works with Zillow will basically be opening up a big storefront where anyone who wants to bash them can do so publicly. Who will respond to this on the part of the lender?

Finally, Zillow will advance a code of conduct that all lenders will live by, requiring them “to be
accurate, professional and law-abiding in all interactions.” Lenders are already required to be law-abiding. I’m not sure if they need another “regulator” to ensure that they are accurate and professional. And what if Zillow, responding to public feedback, determines that a lender isn’t living up to the code. What if, say, a lender doesn’t offer subprime loans in a certain urban area where borrowers really need loans? Is that grounds for banishment? Some members of Zillow’s public may think so.

Zillow has done an amazing job of creating value online in an area in which others have failed. This move may be taking their offering a bit too far. Unless they just get ungodly traffic, in which case all bets are off and they can make their own rules.