CLOSING THE DEAL

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RISMEDIA-NRRE August 2001

CLOSING THE DEAL

How LandSafe is fast becoming the one-stop source for closing services

By Erin E. Harrison

“Coming together is a beginning; keeping together is progress; working together is success.” ?Henry Ford

What began less than a decade ago as an in-house real estate loan settlement company is fast becoming a key player among some fierce competitors?the venerable bigwigs of today?s mortgage industry.

LandSafe, Inc., a multiple closing services company, has in recent years become a leader in one-stop shopping. The Plano, Texas-based company has taken a modern approach to streamlining today?s paper-shuffled closing?offering multiple services under one roof, combining speed with quality customer service.

“We?ve been able to integrate an essential array of closing services,” says Michael Faine, the president and chief operating officer of LandSafe since 1997. “Being able to go through one loan settlement services company or vendor is a tremendous benefit. We remove the paper shuffle for underwriters and lenders, which ultimately allows our customers to close faster and more economically.”

Times have changed for the young organization. When the company started in 1994, LandSafe worked exclusively for its parent company, Countrywide Credit Industries based in Calabasas, California.

Initially, LandSafe primarily served Countrywide, but in recent years, services have expanded and deepened, taking mortgage brokers, real estate and relocation professionals from one end of the transaction to the other. LandSafe recently launched its external sales efforts nationally, expanding its market to new prospects and offering multiple services through its five principal subsidiaries.

“Management wanted to create a more efficient production process?one that ultimately would result in more loan applications and more business for the Countrywide production divisions,” says Faine. “They wanted to reduce the cost of loan-closing services and increase the efficiency of transmitting the information. At LandSafe, we operate virtually in a paperless environment. We have a seamless production process, and almost all of our products are automated and downloaded electronically to our customers.”

While earning the loyalty of and embracing its relationship with its parent company, LandSafe began looking at alternative revenue sources and developing external business ties with home loan originators.

“We have an arm?s length relationship with Countrywide, but at the same time we are responsible for growing the business and expanding our markets,” Faine says. “We?re focused on expanding our relationships with lenders that originate mortgages on a regional and national basis.”

For the past seven years, LandSafe has spent time refining its production processes to meet one of the nation?s more demanding loan origination customers, Countrywide Home Loans. Last year, LandSafe generated more than $140 million in gross revenue across all product lines. Faine projects significant increases in gross revenues this year.

“Countrywide is still our primary customer, but we are strongly focused on what we refer to as the external business development of LandSafe?s products and services?sales outside of our parent. Currently, about 10 percent of our revenue is being generated from external sources. However, we?re looking to increase that dramatically in the next 12 to 24 months,” says Faine.

In May, LandSafe announced a combination of new product development with strategic planning. The move, Faine says, will strengthen the company?s ability to meet the increasing market demand for its family of closing products and services and will further enhance LandSafe?s position in the real estate industry.

In the past year, LandSafe brought in several key industry experts and created an external sales force to help launch its national business development efforts. According to Faine, the goal for LandSafe is to arrive at a 50/50 split between Countrywide and external business development efforts. Relocation companies account for a rapidly growing segment of LandSafe?s external business, profiting most from its home inspection, appraisal and title insurance services, Faine says.

Close Fast, Close Smart

The company?s “close fast, close smart” marketing slogan is more than just a catch phrase. LandSafe is a practical solution for customers looking to have all their needs met from one source?five individual entities complete LandSafe as a whole with its appraisal, credit, home inspection, title and flood services. This array of products positions LandSafe as a single-source provider for businesses to rely on to close efficiently and cost-effectively. Faine says the company is seeing some real payback from those operations. In June alone, LandSafe processed more than 490,000 units across all product lines.

Before being named president and COO of LandSafe, Faine worked for Old Republic Title Insurance before moving to TRW Real Estate Loan Services. After founding Faine-Duey, a residential appraisal company in California, he became president of Nations Appraisal Services, and joined the Countrywide family about six years ago to develop and launch its appraisal subsidiary. The move to lead LandSafe made sense. This hard-hitting approach to consolidate closing services came at a time when Countrywide was looking to expand and further develop its ancillary business.

Eliminating the Paper Shuffle

“Lenders are looking for a more efficient loan production process. In the current environment, they want to get things done faster, quicker and with higher quality,” says Faine. “At LandSafe we offer that through our technology and our significant focus on customer service.”

Automated ordering, downloading information and consolidated billing help reduce the manual data entry involved and speeds up the closing transaction. Built to empower the user, LandSafe?s software and services provide easy access and fast turnaround.

In the past five years, LandSafe has become heavily automated, offering more features and options to the user.

ValueFinder?, an automated valuation software program, streamlines the entire appraisal process and provides access to one of the nation?s largest networks of licensed appraisers. It is designed to deliver estimated market values instantly. In addition to the estimated market value, ValueFinder produces a “measure of uncertainty” in the market value. To achieve this, it uses two different models:

The Adjustment Model: Takes the known sales price of a set of comparables and adjusts it based on differences in the characteristics of the subject and the comparable property. The average of the adjusted sales prices is then the value.

The Regression Model: Performs a multidimensional regression on comparable properties, and uses those characteristics as independent parameters. The Regression Function is used to model the value of the property.

The final result is a weighted average of all valid models.

LandSafe?s Decision Manager system provides access to all three credit-reporting bureaus, and delivers customized credit risk scoring models based on the specific needs of the customer. The technology offers the following services to efficiently process lending decisions:

The Three-Bureau Merge Report is designed to deliver reports in 15 seconds or less when ordered electronically.

The Merge Plus Report can be delivered in 48 hours or less and allows lenders to research up to three tradelines.

The Residential Mortgage Credit Report (RMCR) is a comprehensive report that includes landlord and employment verifications and is processed according to the terms of Fannie Mae and Freddie Mac.

From the beginning of the transaction, LandSafe strategically partners the customer with a designated team manager who has researched specific needs and delivery channels of that customer?s business. The hands-on team manager assists in data reporting and tracking information, managing each order from receipt to delivery, ultimately providing a high-tech, high-touch service from start to close.

“Increasingly, a majority of our business will be accessed, processed and handled through the Internet. We are investing significant capital in the development and enhancement of our Internet site and want to use it as a portal for our clients to apply for, and receive delivery of our products and services?electronically, at a much speedier pace,” says Faine.

More automation, faster delivery of services and external business growth are all on LandSafe?s agenda for enhancing its value to the real estate industry.

“The LandSafe model?a family of closing services literally under one roof?definitely works,” Faine says. “And, if LandSafe can play a key role in helping a company like Countrywide Home Loans achieve record growth, then imagine what we?ll do next as we focus on the rest of the industry.”

For more information, call (877) LS-CLOSE or visit the Web site at www.landsafe.com.


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