Fidelity National Information Solutions sudden emergence onto the real estate services scene and acquisitions, as well as its upswing in its stock valuation, is reminding more than a few of the early days of Homestore. But the Fidelity National Financial spin-off doesn't have as much in common with the high-flying dot-com as people may think.

In a nutshell, the company is a business-to-business data broker, and it is evolving into a sophisticated transaction management service which says it will make transactions easier and less expensive to complete for lenders as well as real estate professionals.

In this exclusive two-part interview with Blanche Evans, publisher of Agent News, Eric Swenson, president of FNIS explains what his company is and what it is really up to. Part One will concentrate on FNIS's lender services.

B.E.: What is FNIS?

E.S.: We are not a consumer company; we are a business-to-business company. Our key customers are lenders, Realtors, and risk managers on the property casualty side. They need data to make underwriting decisions and on policies like homeowner's insurance and we provide the data that they need.

B.E.: You've got lender services, Realtor services, and property records. Let's take them one at a time.

Credit services - you process credit reports - what's special about that as a lender service when other companies can do the same?

E.S.: What the key component is we provide a merged opportunity between all the owners of credit services, merged logic of the credit repositories. We provide merged logic, or they can get a merged report. Merged logic takes all the duplications that might be in each database so that it only comes up one time.

B.E.: How do you correct reports? Two out of five consumers have errors on at least one credit service.

E.S.: The merged logic is drilling three different ways of deduplicating. The listing stack shows the variations - the most conservative approach. The underwriter decides which to go with it, blended- they are a blend. One is that you pick one - you pick which repository has the worst data; that is more conservative. A 60-day late, or a 30-day late reporting date is the same. You take the worst representation. We can set it based on consumer preferences.

Affiliate services, we do merged credit, we own some regional bureaus for the national repository in Indiana and New York. They collect data on behalf of Experian, so we get compensated for the collection of data, as we also are the provider of the data. If a competitor is running a report, they would access our data if they pull Experian.

There is also another thing we do - license our system under private label, they can license our technology, and we are licensed on both Fannie Mae and Freddie Mac. We are one of a handful of approved providers that are in both. They have to be an affiliate.

All these products that differentiate us are delivered real time electronically through RealEC - a Micro General, a joint venture between Land America and Stewart Title. The best way to describe it is as middle ware - the pipes that hook up lender origination systems with vendors in the supply chain like FNIS (flood, credit). It processes hundreds of thousands of transactions, it is unique because multiple vendors can be served and integrated with many loan origination systems. They can input data one time and order services from us or other companies.

That's it in a nutshell - MGEN is a transaction platform facilitator that hooks up vendors with loan originators- hundreds of thousands. It's the number one value-added network in the marketplace today. Fannie Mae's loan origination platform is really the RealEC brand, and they are using the technology.

Since we are on RealEC, we have a system to the Realtor/broker community called Transaction Point, a robust transaction management engine from contract to close that gives multiple views of transactions based on Realtors controlling those views.

The interesting thing about the platform is we have integrated it into RealEC. Up until now, they have worked with large suppliers and now we are taking it to the residential side of the platform to hook up homeowner's insurance, inspectors, title insurance, escrow companies - any vendor that works for Realtors to close a real estate transaction is hooked together through a proven platform for lenders. We are really excited to have a proven technology to provide the largest lender's access to their vendors and the same can happen with real estate agents.

Using the same technology - it is an open architecture platform. The client is the lender or the broker - they choose the vendors in their supply chain. If a real estate broker on the East Coast owns a title agency, they could use our transaction platform to status and track transactions. It would have an open order component that would open transactions to their own title and escrow operation, they choose who the vendor is. We are committed to being the facilitator to streamline the transaction.

E.: How are you planning to sell it? Transaction platforms haven't been widely embraced by brokers or agents.

E.S.: Our TransactionPoint is embedded with other agent and broker productivity tools, and we are looking to automate a broker/agent desktop. TransactionPoint will be one of the applications that we provide.

We recognize that the business models for transaction management in the past were flawed. We have developed the RealEC to be more like an ATM charge, physically opening and tracking it so you can liken it to an ATM withdrawal. Some vendors who thought they would receive a $50 or $100 charge for using the system - that is flawed and not going to work. There is a minor charge for using the RealEC product. TransactionPoint would be like any software, but when the transaction is opened on RealEC, there is a minor charge.

We are really working to tie together and create a simple and efficient transaction platform where a Realtor talks to consumers contact to contract using CRM tools and lead management tools that are all integrated, and they feed our transaction engine and the engine tracks and statuses the transaction to close.

We are looking to create efficiencies in the whole transaction cycle. Contact information of a buyer/seller, name address, legal description, those types of data are not shared across the whole cycle which creates inefficiencies, so we are focused on creating single entry data. There is data that is proprietary which is owned by the consumer or the broker. Based on privacy rules, we allow it to move across all elements of the transaction cycle. We are just building the software to allow that to occur.

The value-add is we also bring data to help populate some of those fields, valuation products that they can build into. We were talking about property reports - that is such a value-add to a real estate agent. We have so much data to compliment that report, historical trends the agent can take and make a report and use it to interact with customers, with hard-core analysis of what has occurred in that marketplace.

E.: Would you explain your appraisal services?

E.S.: I like to call them valuation services. Valuation services provide a spectrum of valuation and appraisal services; we have a huge database of information that is used to put through our proprietary analytical models that will give us real time valuation of properties in the U.S. The automated value model is not something that is used in every loan transaction, these work with straight lot and track environments, similar homes in a similar environment, and provide a good value of what a property's worth. If you have properties outside of that, a property on the ninth hole of an exclusive country club, or it sits on a lake or backs up to a freeway, none of that information is available in a public record format, and because it isn't available, it is difficult to come up with an automated model.

We provide a range of valuation services so we will, based upon a lender's underwriting criteria, recommend certain types of services - an automated value model with a physical inspection of the property, or we could take that information and do a desktop review by a licensed appraiser who reviews the information, or we will work with our internal appraisal network, a list of appraisers that work for us that go out to the property and do a full appraisal.

Today lender's are using an automated value model, (AVM), you own a home worth $250,000 and the loan is $150,000, and the interest rates are high, you want a second mortgage, chances are that is a credit underwriting decision, so they will run your credit, then they want basic tax information - do you own the property? Are the taxes paid up? Then they ask for an AVM to verify that the property is worth $250,000 so they have a cushion on the loan-to-value ratio. Most are using AVMs for credit underwriting decisions, and they may have sent an appraiser out to do a drive-by which is more expensive than using an AVM - $15 as opposed to $300.

For that type of loan, based on underwriting criteria, it makes sense to use the AVM valuation method. Now the data is getting so good that the analytics are so good, we have PHD's that build models, we are getting so accurate that lenders are looking at using these products for first mortgages to lower costs to their borrowers. They are coming up with underwriting criteria. If a borrower has a high FICO score in conjunction with an appraisal by us, a combination of those in addition to a lender feeling they cushion in loan to value. Lenders are looking to go to these valuation products, it shortens the time to send an appraiser to the property. In a lot of refinance business, or a lot of mortgage activity, it takes appraisers two or three weeks to get to the property - this method can be done in real time.

Last spring we introduced that we will provide insurance guaranteeing the value that we come up with, in conjunction with a physical inspection of the property.

B.E.: If you are still visiting the property, then what's the difference?

E.S.: The appraiser goes into the property, measures all the rooms and provides a detailed report. A physical inspection is more of a drive-by. We have a network of real estate agents that provide the service - these are done by contractors that go to the property.

B.E.: BPOs.

E.S.: BPOs are another valuation service we provide. We are one of the largest providers of BPOs in the U.S. BPOs are used for defaulted properties, the lender wants to get an immediate idea of value to update their files, so we have a network of 17,000 agents that we send BPO orders to and they go to the property and deliver it back to us online. We send them on order online and they deliver it online and send it back to the lender. We pay Realtors in excess of $30 million to provide BPOs. The average Realtor gets about $50. They can make their car payments with those.

B.E.: What about tax services?

E.S.: When a lender makes a loan, they want to make sure that the taxes are paid throughout the life of the loan, they want to be assured taxes are paid because they take precedent over a mortgage lien. We go to the taxing authority like the county or multiple taxing authorities like there are in Houston, and we go and gather tax data from each authority and monitor and track the borrower's loan to assure that they pay the taxes.

If there are impound accounts, we will pay the taxes to the taxing authority. We have an outsource component for lenders who don’t set up tax departments, we manage the tax department for large national lenders. We aggregate public records, and tax data, we can use that data.

B.E.: What about property records?

E.S.: We have 160 million records from tax data to deeds, mortgages, notices of default, data that we repurpose and use in different ways. Coverage is over 80 percent of the U.S. population, in some areas we have 100 percent. We can deliver it in bulk online or in an XML feed, or as a product. We have 82 percent of the U.S. footprint, and we sell that data to the MLS systems.

The MLS needs the public records data to supplement the MLS data that they own. All transactions don't go through an MLS, so if a Realtor needs information for comps they might not be able to get all the data from MLS so they use our public records to supplement that.

You can access the data two ways - The MLS contracts with us, and some MLSs have businesses where they do that themselves. In most cases, MLSs work with us to provide that data and we charge a minimal amount on top of our MLS system.

We also provide the data to power their Web sites. Let's say we build an agent Web site and they want to provide that data to enhance their offerings to consumers, they can use the data for lead opportunities - find out how much your house is worth, or what your neighbor sold their home for. To get their information, that consumer has to register and that would turn the consumer into a lead.

All the data is like a well, and that well of data is used for everything as well as driving our tax service, AVMs, and we also sell that data to competitors who are in similar businesses who require that data. We are very open to selling that information to whomever, and it is easily transferable because it is already online.

Part II of the Eric Swenson interview will publish tomorrow. It will cover services for Realtors.