Rick Grant & Associates

Nuestro Banco, a new bank set up specifically to serve the growing Hispanic population in North Carolina, has chosen Information Technology, Inc., a unit of Fiserv, to provide its core banking system.

Last year, I wrote about this emerging market for Mortgage Banking magazine. Writing the piece, I learned that this market will grow to comprise 20 percent of our nation in just a few years. I also learned that this population has little respect for traditional US financial services brands. Consequently a number of new banks are rising up in the hopes of serving this market under Spanish language brands. While Nuestro Banco (Our Bank) may not be the most creative name, it could work to attract these consumers if it keeps their needs in mind. With the Hispanic population growing rapidly in the state, it is a good opportunity.

A release issued by the two companies indicated that the bank would use ITI’s Premier software suite, which offers highly scalable products for virtually every function, including core accounting, branch and Internet banking, business intelligence, risk and compliance, remote capture and transaction management, enterprise business process and content management.

“The Hispanic population is growing at 20 percent per year in North Carolina,” said David Flores, president and chief executive officer of Nuestro Banco, “and the group’s purchasing power is actually growing faster than the population growth rate. The Census Bureau estimates that by 2050, one fourth of the nation’s population will be of Hispanic origin, yet today, the Latino populace as a whole is severely underbanked.”

Flores said the key to capturing this business will be to design new ways to bank – ways that accommodate the Hispanic culture, habits and way of thinking. “We understand these factors, and so does Fiserv,” he said.

Unfortunately, a key aspect of Hispanic culture is that they don’t typically use banks. Nuestro Banco apparently hopes to change that by working with “a software partner who not only understood the dynamics of the Hispanic banking market as it stands today, but one who could see the long-term direction the financial industry will take in response to its expansion.”

Fiserv ITI will leverage its Spanish-language Internet and telephone banking software for its new client, as well as its popular Hispanic Banking Toolkit, a tool that the company claims provides insight into cultural differences and common barriers to banking for Hispanics.

I’ve written a lot about Fiserv over the years and I think highly of their engineering staff. Their software is widely used, both in banking and mortgage. But the key to serving the Hispanic population probably has little to do with innovative new banking products. They view banking services pretty much the same way the rest of us do, as commodities.

They key will be in creating a community that builds trust among members of a market that have traditionally been cheated at worst and ignored at best. The tools exist to do this and I personally believe that it is likely to be a bank serving a niche that first makes good use of them. It could be Neustro Banco, in which case they’ll be happy they have a good core processing system to handle all the new business.

MRG Document Technologies, Dallas, has enhanced its Miracle Online doc prep system with an eye toward compliance. The company has updated the software to meet specific regulations for a couple of states.

In California, MRG now provides a completed document to satisfy the California Department of Corporations’ requirement to supply a Nontraditional Lending Disclosure when a loan is considered a nontraditional product. When the property is located in California and the selected product is either an interest-only or option/negative amortization adjusted rate mortgage, a new screen titled “CA additional programs” is available for users to select up to ten additional loan programs offered by the lender.

Additional programs are used to calculate values that populate the disclosure included in the document package. MRG’s system calculates results using the lender’s products and terms as specified in MIRACLE and as required by the regulation. The document is not static and does not include predetermined products and calculations.

In Maine, MIRACLE now includes a screen for completion of the Maine Reasonable, Net Tangible Benefit Disclosure. For refinance transactions in Maine, lenders can complete the disclosure on the “related lien” screen.

“As states announce new lending regulations to reflect current market conditions, MRG’s systems continue to evolve,” said Terry King, group Chairman of MRG. “MRG understands that mortgage brokers and lenders require customizable tools that fit their current loan products and comply with state requirements and borrowers’ needs, and we provide a flexible system to meet those requirements.”

Most mid-tier lenders have fallen back on the document vendors to provide built-in compliance services, though many competitors don’t have internal compliance attorneys on staff. This is an area of high concern for lenders in an environment of increased scrutiny, overlapping jurisdictions and additional legal complexity. (I could have just said “scariest environment possible” I guess).

MRG is the mortgage document practice group within Middleberg Riddle & Gianna, a mortgage regulatory law firm.

Bill Rice and his team at Kaleidico have launched a new tool that provides sales lead management through Twitter. He calls the new tool Sales-Twit and explains it on his blog.

I’ve been trying to use Twitter for a month or so now (after abandoning it once already), but I haven’t taken it to the mobile phone. I use Utterz for posting from the smart phone.

What Kaleidico is doing takes this tool to a new level. If it is successful, it might be a better way for many field-based salespeople (real estate agents, insurance agents, etc.) to manage their lead pipelines. I plan on learning more about the tool and will report back.

Like all industry shows this spring, attendance was down somewhat from last year at the Title/Appraisal Vendor Management Association’s annual convention here in Orlando. But that didn’t keep the organization from putting on a great show the first day.

The session speakers were very good and I’ve heard numerous comments from attendees indicating that they are taking away real value. Example, Monte Jiran, COO of Equity Settlement Services, a title company, told the audience at the technology panel that it’s not about what software you choose or what vendors supply it, it’s about how the partners you choose to work with work with each other. If they are not willing to “play nice” together for the benefit of his business, he ditches them. That’s a contrast from what we often hear on the origination side of the business, where companies keep looking for an end-to-end solution provided by a single vendor. Lenders still seem to be pretending that they want that kind of a one-to-one relationship, but when vendors offer it, they don’t buy it.

The title agents and appraisers who come to this show to meet with some of the nation’s largest vendor management firms don’t have large technology budgets. They need a lot of support and count on a number of vendors to provide them with a quilt of inter-woven solutions. Jiran told attendees to demand that vendor partners come together on every aspect of the platform to make sure that all works.

We also heard from Jeff Thredgold, economic futurist and publisher of the weekly Tea Leaf, as well as leading appraisers who addressed the many changes coming to that side of the business.

I’m down to the floor now to hear attorney Phil Schulman give his keynote. He’s always informative and entertaining.

FIS Valuation Solutions, a Fidelity National Information Services Company, announced today that it would embed its services as a free module into The Mortgage Office, the leading loan servicing software solution from Applied Business Software. Users of ABS’ Loan Servicing module will now have seamless access to FIS property valuation reports, including the ValueSure AVM and Preview, an automated review tool to assist clients in determining the quality and loss potential of real estate collateral without the need for a complete appraisal review.

The recent Home Value Code of Conduct, release by OFHEO in the wake of the GSE meetings with New York’s Attorney General, have much of the industry in an uproar right now in regards to the appropriate controls for ordering and managing property valuation products. The Code, if implemented as written and planned on Jan. 1, 2009, will create massive change int he way lenders order appraisals. It will undo much of the work that has been done over the past 20 years by lenders to streamline this part of the business through captive joint venture entities.

Property valuations for loss mitigation purposes are left largely out of the new Code, which makes it a good time for companies like FIS to solidify agreements with loan servicing software providers like ABS.

Radian Guaranty, Philadelphia, has launched a new program, called Radian FastAdvance, designed to provides quick, partial claims advances that allow residential mortgage servicers to assist distressed borrowers by modifying the terms of a loan (such as a rate reduction) or by structuring a customized repayment plan. The company also announced a partnership with Consumer Credit Counseling Service of Delaware Valley (CCCS) that will provide education, customized assistance, and a method of direct communication between borrowers and servicers using the Radian FastAdvance program.

Mortgage insurance companies have been hard hit during this downturn and losses will mount if companies can’t find ways to keep mortgage borrowers from walking away from their properties. Radian says there is no single solution that will help every borrower and so the company is advancing funds to servicers so they can take the specific action required to keep borrowers in their homes rather than proceeding with a stressful and costly foreclosure process.

The partnership with Consumer Credit Counseling Service of Delaware Valley will provide borrowers access to third-parties that can assist them in sorting through all of their options.

“The combination of the Radian FastAdvance program and the partnership with the CCCS is a sign of progress in helping borrowers and servicers navigate what has been a very difficult market environment,” said Paul Fischer, Radian Guaranty’s Executive Vice President of Loss Management. “Having such a respected, independent counseling organization available will give individual borrowers the confidence to work through their situation.”

Radian says servicers are already making use of the new program.