On the strength of a rise in per-file fee income for residential and commercial files, Stewart Information Services Corp. saw its title operating income hold steady.

[caption id="attachment_7239" align="alignleft" width="150"] An increase in file fees helped Stewart's financial performance.[/caption]

The domestic residential fee per file increased 10% to around $2,200, a result of the shift to more purchase transactions; and the commercial fee per file increased 43% to around $8,400 due to increased transaction sizes. All told, title revenue in the third-quarter 2018 ($486 million) were comparable to the prior year quarter ($485.4 million), a result of higher commercial and independent agency revenues, which a decline in non-commercial direct title revenues offset in part.

"Stewart delivered solid third-quarter results as increased fee-per-file levels in both commercial and residential operations offset lower order counts," stated Matthew Morris, chief executive officer at Stewart. "Even though order counts were down year-over-year as interest rates rose through the quarter, the growing mix of purchase transactions in our residential business and larger transaction sizes in our commercial business helped keep title revenues flat with the third-quarter 2017.”

Included in non-commercial domestic revenues were revenues from purchase transactions, which were roughly flat year-over-year, and centralized title operations (processing primarily refinancing and default title orders), which declined $5.7 million in the third-quarter compared to the third-quarter  2017. Also, gross and net revenues from independent agency operations increased 2 percent, compared to the third-quarter 2017.

Commercial revenues rose $7.3 million, or 16 percent, compared with the prior year.

Employee costs for the third-quarter 2018 were $138.3 million, a decrease of 1 percent compared to $140.1 million in the same quarter one year earlier. Average employee counts decreased around 8 percent in title and ancillary services in the third-quarter 2018, compared to the third-quarter 2017.

The reduced employee counts resulted in an 8 percent decrease in salaries and other employee benefits, which was partially offset by increased commissions on commercial title compensation. As a percentage of total operating revenues, employee costs for the third-quarter 2018 improved 40 basis points, or 27.7 percent compared to the same period a year earlier.

Third-quarter 2018 results included $6.8 million of third-party advisory expenses from the Fidelity National Financial merger transaction and $3.4 million of net unrealized gains relating to changes in fair value of equity investments.

“Our senior management team remains focused on the merger process as we continue to work with the FTC and the appropriate state regulators, and, as our results illustrate, all associates remain focused on delivering solid operating results," said Morris.

Lake Michigan Credit Union has completed the implementation of MSP, the loan servicing system from Black Knight. The solution encompasses all aspects of servicing--from loan boarding to when the loan is paid off--for first mortgages and home equity loans and lines of credit. MSP is used to service 34 million active loans and was designed to increase  efficiency, reduce costs and improve risk mitigation.

Also, Lake Michigan Credit Union has deployed Black Knight's Actionable Intelligence Platform to provide proactive intelligence that will benefit its servicing operation. The Platform delivers strategic, proactive and actionable analytics to the right people, across an organization at the right time, so they know what action to take next. For instance, an app makes it easy for members to check their mortgage balances.

"Our servicing portfolio has grown to $11 billion and 55,000 members, we want to retain servicing rights, so we thought it was time to upgrade to a more robust system,” said Eric Burgoon, chief lending officer of Lake Michigan Credit Union. “We made this decision because we wanted to stay on top of regulatory changes as well as automated features that allow us to send notices to members, for instance, on a specific date, so we never miss a date.”

"We are excited that Lake Michigan Credit Union has selected Black Knight to support its growing business. As a leading mortgage software provider, we've made significant investments to further innovate our servicing system, which offers our clients many compelling advantages to optimize their servicing operations and mitigate risk," said Joe Nackashi, president Lake Michigan Credit Union. "Integrating Black Knight's comprehensive analytics with our MSP technology will help Lake Michigan Credit Union prepare its business for the future of the mortgage industry."

Experian, FICO and Finicity have developed a new credit score—UltraFICO Score, which leverages account aggregation technology and distribution capability from Experian and Finicity to help consumers improve access to credit by tapping into consumer-contributed data, such as checking, savings and money market account data, that reflects responsible financial management activity.

A consumer grants permission to contribute information from banking statements, including the length of time accounts have been open, frequency of activity, and evidence of saving, which can be electronically read by Finicity and combined with consumer credit information from Experian to provide an enhanced view of positive financial behavior.

Experian, FICO and Finicity estimate this new score has the potential to improve credit access for the majority of Americans and is particularly relevant for those who fall in the grey area in terms of credit scores--falling in the upper 500s to lower 600s--or fall just below a lender's score cut-off.  Consumers who are new to credit with limited history or those with previous financial distress that are getting back on their feet stand to benefit the most.

"This changes the whole dynamic of the lender and customer relationship," said Jim Wehmann, executive vice president, Scores, at FICO.  "It empowers consumers to have greater control over the information that is being used in making credit risk decisions.  “It also enables a deeper dialogue between the consumer and lenders to help both parties make better financial decisions.  It's a game changer."

UltraFICO will launch as a pilot program in early 2019. The pilot is designed to validate the score and assess willingness of consumers to share financial data for a potentially higher score. Pilot participants were sourced across various lines of businesses.

The model developed by FICO will be implemented through Experian and integrated into a lender's existing operational workflow. Borrower data will be aggregated through Finicity.

The UltraFICO Score builds off of the framework of the base FICO Score and is designed to reflect the same odds-to-score relationship so that the new score can be easily incorporated into lending strategies and origination, account management systems. The UltraFICO Score is slated to be broadly available to lenders mid-2019.

"As the consumer's bureau, our goal is to help empower consumers and to give better access to credit for more consumers, all while promoting fair lending," said Alex Lintner, president of consumer information services at Experian. "Through this project, we've found a new way to use consumer-permissioned data that allows lenders to make better decisions and helps consumers gain access to credit."

"This approach allows Americans to benefit from positive financial behaviors," said Steve Smith, chief executive officer at Finicity.

Corelogic is automating some what it considers the most manual, time consuming and expensive underwriting processes—through a single interface—AutomatIQ Borrower. It’s a comprehensive underwriting solution designed to help lenders streamline workflows by digitizing, standardizing and automating borrower analysis and verification.

Corelogics has placed all of the borrower verification tools together into one interface. Clients will be able to order tri-merge credit reports as well as verifications of employment, income and assets. “Automating the underwriting process can save days, and that’s a value to lenders,” said Jay Kingsley, executive for credit solutions at CoreLogic. “The result is a reduced cost to originate, a better consumer experience and a faster time to close.”

The one-stop shopping eliminates the need to employ several borrower verification tools, from different vendors. Also, it provides a streamline way to help lenders improve their underwriting processes, generate efficiency, streamline processing, and help shorten turn times, and improve loan quality.

The AutomatIQ Borrower solution standardizes income analysis with a comprehensive suite of consumer data and verification services. By eliminating time-consuming manual tasks and workflow redundancies while helping to enable lenders to conduct reliable borrower analysis sooner in the process, AutomatIQ Borrower helps increase underwriter productivity and overall loan quality while reducing origination costs and time.

For regulatory purposes, an electronic audit trail is created and easily accessible, if a report is needed for a regulator. For instance, in a paper-based system, where there is a question about a borrower’s income, the underwriter had to trace back his steps and determined there’s a second income. With AutomatIQ, users can annotate a file, and explain that there was a second job, and the borrower’s income was adjusted to reflect that.