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March 9, 2004  
Help us tell your story

 

You can help a la mode tell the story about how our appraiser customers - you - are leading the paperless mortgage revolution. All we ask is for less than five minutes of your time to answer some short questions in our online survey. Click here to take the survey (or copy this link into your web browser's address bar: http://www.alamode.com/newsletter/survey.htm).  The survey will open in a new browser window, so go ahead! You won't lose your place.

The mortgage industry will gather in Phoenix, Ariz. next week for the National Technology in Mortgage Banking Conference & Expo to discuss e-mortgage standards, the latest technology and ways to speed up their transactions. Inevitably, this means a lot of discussion - and press - about AVMs. What the industry still has not fully realized is that AVMs are not a viable solution to long mortgage transaction times. They're unreliable in data-rich areas, and impossible in areas where data are scarce, and have had the most stunning mortgage activity boom in U.S. history the last two and a half years to prove those statements wrong. And they haven't, because they can't.

Speeding up the appraisal process means automating things that can truly be automated, without sacrificing the judgment of a professional third-party appraiser. That means online ordering, online statusing (i.e., e-mail status follow-ups, not phone or fax) and online transmission of completed reports.

Five years ago, did you offer those things? Were you capable of receiving e-mail orders and sending .PDF reports? Did your clients ask for it? How about today? These are the short questions we ask in our survey. Compare what you offered your clients and what they demanded in 1999 in terms of online transactions. How many of your clients are still faxing you orders? Asking for faxed reports? Calling you for status?

Let us know by taking just four and a half minutes to complete the survey. We'll report the results next week, both to you and the mortgage industry. Thank you for your help!

The night that the lights went out in Oklahoma

What were you doing at approximately 6:25pm Central Time on Thursday, March 4? Maybe you were grabbing an InterFlood flood map to insert in an appraisal report, or geocoding an address via our Mercury servers, or logging in to your Appraiser XSite to download orders and update status, or on the phone with one of our tech support people. If so, you might have completely and utterly failed to notice that all power was lost in the immediate area of a la mode's headquarters in Oklahoma City.

Severe wind and thunderstorms wracked the area (and stranded certain indefatigable newsletter editors at Will Rogers World Airport) that afternoon and evening, and our power provider, OG&E, shut down power in the area of our building for weather-related reasons. They picked on the wrong company, though: We have a 485 horsepower turbo diesel-powered backup generator with 24 hours' worth of fuel. About four seconds after power was shut off locally, Big Momma kicked in and business literally continued as normal.


Big Momma

Power remained off for nearly an hour and a half, during which time we had sales people, developers, techs and others who refuse to leave at quittin' time continue to work as though nothing had happened. Which of course means you continued to work as though nothing had happened.

If you'd been using one of our competitor's products or services during an hour and a half power outage, chances are very good that you wouldn't need to hear about it in an e-Newsletter. Your business would have been on hold, and work lost. There's a lot of responsibility associated with being the biggest, best appraisal software and technology provider, and we take it seriously. Big Momma is just one way we show it.

Bagle.J virus has a new twist

Never open unsolicited e-mail attachments.

A new computer virus, discovered Tuesday, March 2, has been infecting Internet e-mail worldwide since. This one is particularly clever and particularly nasty. CertMail users are covered, although there were some scary moments. With any virus, it takes some time after it's let loose to develop effective countermeasures. But many of you use other e-mail providers for your business and personal use and you should be aware of what you're up against and how to combat it.

The virus appears to come from the "administrator" or "staff" or the like of your e-mail provider. It disguises itself with your e-mail address' dot-com domain name. So, if you have Mindspring e-mail, for example, it may appear to come from administration@mindspring.com. It appears to be warning you that your e-mail will be disabled unless you open the attached file with a password provided in the message body.

Never open unsolicited e-mail attachments.

The e-mail is a hoax, and if you open the .ZIP file with the password in the e-mail, your PC will be infected. (Windows® users only are susceptible.)

If you're infected (or not sure): Disinfect with top-quality antivirus software. For this virus, called Bagle.J, there is a free tool from McAfee called Stinger that will help you restore your system. Note: Stinger does not eliminate many thousands of viruses, only a few particularly nasty ones (like this one), and you must, must, must follow all the instructions accompanying it. Also, Stinger is for detection and removal only, not protection. It's free and available at the link above. See McAfee's information page for this virus for further details on it.

Also, you may have noticed that viruses today seem to often be coming from someone you know. Maybe even news@alamode.com! Certain viruses "spoof" an e-mail address it finds in your e-mail Inbox or address book. That way, more people may be likely to open the virus, if they think it's from someone they know. Never open unsolicited e-mail attachments.

FDIC doesn't see bubble trouble

Noting that some observers liken the escalation in recent home prices to the stock market bubble of 1998-2000, the Federal Deposit Insurance Corp. (FDIC) tallied several factors mitigating against such fears in a recent report.

One is utility. Homeowners live in their "asset," stock owners don't. Housing carries enormous transaction costs, making property less liquid during a price falloff. There are important tax advantages to owning a home, as well as less tangible benefits, such as neighborhood stability and social involvement. And perhaps most importantly, as we've said before, there is no "nationwide" market for housing. "Stock prices reflect millions of decisions brought together in a single collective marketplace," the report said. "In contrast, housing prices are driven by local factors" such as proximity to jobs and family.

The FDIC did express concern that buyers' gravitation toward Adjustable Rate Mortgages (ARMs) recently might lead to defaults and delinquencies. ARMs, at least ones that have been originated in the last couple years, start out very low and then home owners may be susceptible to drastic spikes in the overall and their specific rate.

"While some systemic factors, such as mortgage interest rates, influence home prices across the country, most influences on home prices are local," the FDIC said. This is why Freddie Mac and the Mortgage Bankers Association both foresaw rising interest rates as well as rising purchase originations this year.

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Briefs

ILS arming appraisers with Mercury


Rocky Hill, Ct.-based Integrated Loan Services (ILS), a national process and workflow management service provider for banks, credit unions and mortgage lenders, recently completed a custom plugin for a la mode’s Mercury Desktop product for its nationwide roster of appraisers. ILS’ fee panel is equipped with a copy of Mercury Desktop, an EDI workflow management application residing on an appraiser’s PC. Every copy of Mercury Desktop in the US now contains a custom ILS plugin. Appraisers prepare their reports with the formfilling software of their choice, then transmit them back to ILS, which converts a report to its mortgage lending client’s format and transmits it to that client. Details here.


Spike in home prices better reflects reality: Analyst
 Freddie Mac's quarterly Conventional Mortgage Home Price Index, released last week, saw an annualized rate of property value appreciation of 17.8 percent nationwide, a figure unheard of since 1976. Analysts for UBS Warburg told Asset Securitization Report the spike can be attributed in part to fewer "appraisal" errors - which it explains means appraisals being reused by "serial refinancers" to streamline the loan process. Now that refi activity has petered out a little, and the profile refinancer isn't one that just refinanced a few months previous, the depressing effect on home prices of "reused" appraisals is being corrected. Amy Crews Cutts, economist with Freddie, said that the telling figure was 8.4 percent price appreciation from fourth quarter 2002 to fourth quarter 2003.


Construction spending snowed in
 Construction spending fell for the first time since May 2003 in January, dropping 0.3 percent, with private residential spending holding flat but nonresidential spending falling slightly. Gina Martin, economist with Wachovia Securities, put part of the blame on abnormally cold temperatures and snowy conditions on the east coast during the month. "We do not see this as the beginning of the end for residential spending," she said. "Despite the flat month, private residential spending remains up more than 20 percent over the last three months and interest rates remain very low."


This week's challenge
 Please take our survey! Under five minutes. We promise. Last week, we didn't hear from many people who have marketed their services directly to homeowners, either would-be purchasers or sellers or people involved in divorce, estate distribution or the like. We're going to continue to investigate the best ways to market to this segment and report in a later edition.

Send any tips and feedback to the editor: mattb@alamode.com.

Sales question? sales@alamode.com
or 1-800-ALAMODE

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