Friday, April 08, 2005

Get Ready to Rumble: The Fight for Transaction Control

You don't have to study the dynamics of interpersonal relations to know that more parties involved in a transaction leads to more friction in the process as the various players try to exert influence to further their own interests. That's just basic human nature. The real estate transaction could be the poster child for disfunctional group dynamics. And that's under the best of circumstances.

Writing for October Research Corp.'s RETI pub, I was often visiting with executives from the real estate sales side of the equation that were convinced that they -- and they alone -- should be in control. The mortgage was just another settlement service to them. Naturally, the mortgage lending, settlement services and technology executives I know have a different opinion. Since nothing happens without money, they consider the financing central to the transaction.

Others out there are starting to come around to the customer-centric view that has become so popular in other industries. While I agree that the day will come when the borrower/homebuyer will go to the Web and control everything, that day is a long way off. People that can buy a book about boating on or a bow cover for their Bayliner on eBay still find it far more difficult to negotiate our waters. The battle between the industry and the individual will be fought in the future.

But fight fans don't have to wait. There's a battle going on right now in the mortgage technology arena over what software should control the transaction.

Michael Hammond, Director of Sales and Marketing for Dynatek recently wrote in Mortgage Technology's newsletter: Link.

"In the last issue of this newsletter the columnist pointed toward middleware as the answer to the mortgage industry's problem with disconnectivity between systems, likening middleware to the conductor of a symphony - the musicians in the symphony being mortgage industry service providers. In this model, the LOS gets equal playtime with everything else. This couldn't be further from the truth."

Talk about a shot across the bow! Hammond was referring to a recent article penned by an executive from WellFound Decade.

Now, I've written quite a few positive things about the technologies offered by both of these firms. Dynatek's Plug-In technology was really SOA before its time. This technology is integrated into its MORvision loan origination system (LOS). The company recently reported doing over 1 million Plug-In-enabled transactions.

The recently merged WellFound Decade team has combined a proven integration firm with an SOA framework the company calls the Mortgage Integration Foundation, a sort of middle layer between the lender and all the other services required to close the loan, including the LOS.

The lender will have to decide what the core origination technology actually is. My take (FWIW): as long as we're just thinking about originating mortgage loans, it will be tough to replace the LOS as the primary tool. But if someone could show how a single "master integration and management tool" could serve as a central SOA hub for originating a menu of mortgage products as well as handling other corporate transactions (such as human resource and benefits administration or facility management, for instance), then we'd be seeing a tool of the future.

For now, the battle rages on.

Monday, April 04, 2005

MBA Tech Conference a Success

I want to thank everyone who took the time to visit with me during last week's Mortgage Bankers Association Technology in Mortgage Banking conference. I had a great time and learned a lot. I'll share it with you on my website and in this space this week.

I was glad to see all the usual suspects and some new faces (though the vast majority of them seemed to be working in document imaging). There has been some movement among executives over the past few months, which I'll be addressing in upcoming podcasts. I'm always very interested in learning why top people switch companies. Which of their skills were responsible for the new company's interest? What technologies caused them to leave their old firms? We'll talk to several of these top players in the weeks ahead to find out.

If you're interested in appearing on the podcast, drop me a line.

I got some feedback on a past post that will prompt me to do some additional research. It appears that some of you are not familiar with Fannie Mae's new technology initiative. That makes sense because the company isn't talking about it yet. First, I would direct you to October Research Corporation's Real Estate Technology Insight publication. I wrote a story for the cover of the Dec. 14, 2004 issue that addressed this topic. You might ping RETI's new editor, Matt Smith, about whether the publication is planning on writing an update. In the meantime, I'll poke around and see what there is to find out.

Coming up on the website: what should be included in your company white papers (and what you might want to leave out).

By the way, if you haven't downloaded the cheat sheet for working with your trade publication editor, do it soon (it's on the homepage). It will be falling into the archives shortly -- from whence it may never return (I hope I don't sound like a frustrated fiction writer!). Fill out the form. The information comes only to me and will not be shared, sold, rented or otherwise violated in any way.