Tech Roundup: A Patent War for Two Compliance Giants

(update 1: removed date of patent filings to prevent reader and our own confusion, as both companies have made competing claims) Dueling patents: Both Mavent Inc. and LogicEase Solutions Inc., two competing origination compliance vendors, said last week they had been awarded patents for various aspects of their businesses. Mavent said in a press statement on July 30 that its patent covers “systems, software programs and methods of use for businesses that originate and close loans secured by real estate in order to audit such loans for compliance with state and federal laws and regulations.” It also signaled that it will begin looking to enforce its patent, saying that it was “considering providing licenses to interested financial institutions and mortgage-related companies that may presently be infringing on the patent.” One day later, LogicEase said that it had earned a patent on its ComplianceEase platform as well, touting its patent as “the first of its kind issued with respect to an automated compliance solution for the mortgage industry.” Mavent, of course, made similar claims in its press statement, saying it was “the only organization with a patented technology that performs comprehensive and thoroughly vetted compliance audits.” All of which makes for amazingly entertaining news, but likely means little to customers of either well-known company, unless you happen to be infringing on the now-patented business processes at each company. (In which case, you may want to lawyer up.) Interthinx names names: Fraud detection is big business these days, as originators look to manage their repurchase risk. Last week, tech provider Interthinx Inc. said it had rolled out name matching technology within its third-party review platform used to perform background checks on brokers. The company, not surprisingly, believes its name-matching technology is vastly superior to others. And remarks by Stacey Louie, senior vice president of product development and engineering for Interthinx, suggest the company may be onto something. “Most name matching solutions identify variations due to phonetic errors, accounting for only 20 to 25 percent of all name matching errors,”she said. “In addition to phonetic errors, the Interthinx solution will overcome common variations associated with misspellings, transpositions, acronyms, nicknames, and many other errors, providing our customers better precision when approving or denying business partners.” Overture tackles suitability requirements: “Suitability has become a big focus for 2008, but as many lenders are finding, it’s hard to implement and enforce,” said Larry Platt, a Washington DC-based attorney with K&L Gates who specializes in residential mortgage lending law. “In this case, regulators want to ensure that the mortgage loan provided to the borrower offers a net tangible benefit to the borrower; that the loan originator hasn’t been steering or directing a borrower into a loan program that’s not as beneficial to the borrower as it could be; and that the borrower has a reasonable ability to repay the loan.” All of which can be problematic for an industry that typically selects mortgage loans for a borrower based on the borrower’s stated preferences and the loan officer’s personal evaluation; it’s not exactly the definition of suitability that’s been emerging as of late. “Most lenders follow a loan origination process that pushes the decisioning process—or decisioning iterations—towards the end of the mortgage cycle,” says Linda Simmons, senior vice president of business development for Overture Technologies, a decisioning tech provider to the mortgage industry. “This approach puts the emphasis on the three suitability criteria days and weeks after the borrower initiates the process, which is not good because these delays can interfere with those criteria being achieved.” Simmons said that her company’s Mozart Decisioning Suite platform is seeing growth, as lenders move to comply with suitability requirements, and especially as regulators look to clamp down on violations and perceived abuses. MortgageFlex touts agile: MortgageFlex Systems Inc. said last week that it has rolled out the so-called agile software development methodology, as part of a program put in place by newly-installed COO Craig Bechtle. The first customer to benefit from the new development program was mega-regional KeyBank NA, whose mortgage division recently implemented the company’s LoanQuest residential lending system. Wolters Kluwer goes FHA: OK, we get it. FHA originations are hot. In fact, many lenders are seeing them as the only game in town, even moreso than either of the GSEs — and Wolters Kluwer Financial Services knows that. The company rolled out a new suite of government lending services to create, expand and manage a profitable, compliant FHA lending program last week. The company said it now offers a complete suite of training, licensing support, e-document solutions, consulting, and compliance auditing services for lenders already in or looking to get into the FHA lending space. Editor’s note: Tech Roundup runs each Monday morning, and offers a look at key tech news and trends from throughout the week. To have your company’s news considered for inclusion here, send an email with your press statement to editor@housingwire.com.