From the appraiser's perspective: FNC Inc. and Bill Rayburn, connecting appraisers and lenders—part oneCharlie Elliott Jr., MAI, SRABill Rayburn, FNC, appraisal technology
In an attempt to address some of the technological issues
that connect appraisers and lenders, who better to contact than a
leader in the field? This month's column is part one of an
interview with one our industry's true technological pioneers, Bill
Rayburn, CEO of FNC Inc. In addition to being CEO of the company he
founded, Bill holds a Ph.D. in finance and CFA (Certified Financial
Analysis) and MAI (Member Appraisal Institute) designations, three
of the most sought-after credentials in the finance and appraisal
industries.
Charlie Elliot: How did a Mississippi college professor
become interested in real estate appraisal to the extent of
obtaining an MAI appraisal designation?
Bill Rayburn: You could say that my foundation in real
estate came straight from the cradle. My father was a real estate
developer and builder in southern Mississippi, so I grew up with
real estate. My educational background was in finance, real estate
and insurance, with my primary focus on financial institutions.
I started doing work for financial institutions on the
collateral side, and doing market analysis and feasibility studies
on large real estate. I just plain needed the expertise, which I
gained while obtaining my MAI.
CE: What prompted the idea of starting a company that
would become one of the premiere mortgage appraisal system
companies in the country?
BR: Before founding FNC and alongside our professorial
careers, Dennis Tosh and I conducted seminars for major banks and
state banking associations around the country on how to apply the
Financial Institution Reform, Recovery and Enforcement Act
(FIRREA). Around 1994-1995, one of the bankers asked us, "Can you
build me one of these systems similar to the one you are talking
about?" I said, "Absolutely!" We came home, and I remember Dennis
saying, "Where are you going to get this? You dont know how to
write software!" And I said, "No, but I have a banker who has
money, and there are plenty of smart people around here. We'll
figure it out."
We approached two of our colleagues, also professors at the
University of Mississippi. One was a management information systems
professor named John Johnson, who knew technology, and the other
was an economics/statistics professor named Bob Dorsey, who knew
operations. So, we got together and went to work on the software.
Our first two employees were Ph.D. students whom we hired
part-time. One of them is now our chief technology officer and
chief software architect, in charge of the design on all of our
systems. We worked on this software for three years, with the
University of Mississippi incubating us and Mississippi investors
helping us financially. Our first big customer was Charter One
Financial in Cleveland.
CE: FNC has come a long way from an ambitious idea to a
large national company. Would you care to expound on some of the
challenges you have faced as a start-up company as well as any
slam-dunks that you have experienced?
BR: A couple of the challenges we faced as a startup have
also been blessings. Our headquarters is in Oxford, Miss. In the
past, we've received many questions about that--Oxford is way off
the beaten path when you consider the traditional technology
centers in this country, but Mississippi has been good to us.
Our investors come from this region, and without them, we
wouldn't have been able to get off the ground. Many of our talented
folks are connected to Mississippi, either former staff or
graduates from the University of Mississippi, or folks who used to
call Mississippi home and moved away but then came back to work for
FNC.
And finally, Mississippi has turned out to be the perfect place
to house our secondary disaster recovery facility. Our primary data
center is in California, and clients used to be really glad to hear
thatthey didn't want their data in Mississippi. But after 9/11,
Oxford, Miss. is a good place to have data. Like I said, it's off
the beaten path.
Another challenge we've faced is that our sales cycle and
installation/implementation cycle are long, especially during the
last three years of record volumes. Mortgage originators were so
covered up in application volume that it was all they could do to
get the paper processed and out the door. They didn't have time to
think about anything else. Both of those issues have begun to
resolve themselves. Lenders have more time to be proactive about
technology that will make them more efficient and risk averse. And
weve developed a fast installation plan that's going strong right
now with three of our new clients.
Many of our challenges have turned into slam-dunks. We have
systems in place or in the works at four of the top 10 mortgage
originators and five of the top 10 sub-prime originators in the
United States. We worked with the Appraisal Institute to develop
what is now the recognized standard for communication and storage
of appraisal information, "AI Ready." We have thousands of title,
flood, inspection and AVM providers, appraisers and other vendors
connected to our lender clients through our ports. We have
absolutely fantastic people on board. We have many successes, and
we're thankful.
CE: Would you care to comment on the number of employees
you have or the national client base you serve?
BR: FNC has offices in Oxford, Miss. (the headquarters),
Costa Mesa and Carlsbad, Calif., as well as onsite technical staff
at several client offices and telecommuters working from home. We
have 230 employees.
Our clients include Allstate Appraisal, American Home
Mortgage/HomeGate Settlement Services, Ameriquest Mortgage Company,
AmSouth Bank, Aurora Loan Services, Bank of America, Centex,
Countrywide, Frost Bank, Greenlink (the vendor management arm of
Wachovia), IndyMac Bank, Just Valuation Inc., Key Bank, LMS/RBC
Mortgage, Option One Mortgage Company, Quicken Loans Settlement
Services, Union Bank of California, Washington Mutual, Wells Fargo
and others.
Charlie Elliott Jr., MAI, SRA is president of ELLIOTT &
Company Appraisers, a national real estate appraisal company. He
can be reached at (800) 854-5889,
[email protected] or through
the company's Web site at www.appraisalsanywhere.com.
