Niche Players Still Prominent in Default Servicing Technology.

NEW YORK -- Despite the emphasis of large technology providers on incorporating default management and workout technology into core servicing systems, specialized technology providers still believe they can offer something better. And they aren't afraid to wrap their technology around a lender's basic servicing automation system.

Duke Olrich, President and CEO of DRI Management Systems, said it's clear what lenders want when it comes to default management technology. "What they want is rules based template oriented to user defined methodologies." The user-defined aspect is key. And service-oriented architecture allows companies such as DRI to provide that in a way that stresses simplicity and compatibility with existing systems, he said. In the old days, an individual had to review a file, assign an attorney to manage the default, and put it into a tracking system. Today, with SOA technology, the system itself can automatically push the loan onto the appropriate next step when one step is completed, all based on the criteria established by the investor who ultimately owns the loans. "A manager doesn't want a long list. They want an overview and the ability to drill down," Mr. Olrich said.

DRI also relies on .Net technology, which is the Microsoft framework for rapid deployment in the Web arena. Mr. Olrich describes this as a "very robust language" that facilitates rapid development and deployment of software applications. "The ideal would be that there would be as few touches at the servicer's shop in the default department as possible."

DepotPoint, an independent technology firm based in Bellevue, Wash., has created a Web-based workflow tool, TrackPoint, designed to make default management more efficient. With the spread of alternative loan products and higher interest rates creeping into the market, executives at the firm believe the time is right for new foreclosure management technology, especially with the industry anticipating higher defaults related to new ...