FNC Plans Major Expansion While Innovating Mortgage Lending Business

Bethany Cooper, Sage Nichols, Jon Fisher, Mike Mitchell, Glen Evans

FNC employees Bethany Cooper, Sage Nichols, Jon Fisher, Mike Mitchell and Glen Evans.

FNC, the Oxford-based financial software innovator, is building a multi-million dollar, 25-acre campus expansion with the help of the Mississippi Development Authority and MDOT.

Impressive growth since the company’s founding by four Ole Miss professors in 1995 has driven plans for the expansion that will extend FNC’s property north along Highway 7 all the way to the current Popeye’s fast-food restaurant. The new campus will feature walking paths, a connecting trail to the city park, water features, a new frontage road and an amphitheater.

If you live in the Oxford area, you’ve surely heard of FNC. But you might associate the name more with the beautiful park and athletic fields the company sponsors on Old Sardis Road. FNC’s real niche, however, is its pivotal role in the worldwide mortgage software business.

 

FNC--MasterPlan-

“We’re developing a new 68,000-square foot headquarters,” said FNC President Glen Evans. “We’re thankful to the Mississippi Development Authority, the Mississippi Department of Transportation and the Oxford and Lafayette County officials who have embraced FNC’s value to this community and helped make the expansion possible.”

The expansion will be a multi-million dollar, multi-phase project that FNC believes will support its space needs for another 10 years. FNC is receiving significant support for the project from the Mississippi Development Authority based on the projected job gains of more than 300 well-paid, high-tech jobs. Mike Tagert, Northern Distirct Transportation Commissioner, and MDOT, have also been instrumental in supporting the infrastructure development needs for the project, as have the city and county governments, TVA and Northeast Power.

The project was a catalyst for the recently announced  $2.3 million Community Development Block Grant, which will extend the new frontage road north from Office Park Drive along to soon-to-be, four-lane Highway 7 South, benefiting the entire community.

FNC CEO Bill Rayburn attributes the company’s growth to the mortgage industry’s need for technology.

Bill Rayburn, FNC CEO

Bill Rayburn, FNC CEO

“FNC technology automates the appraisal process, which used to be very paper heavy,” Rayburn explained. “So our software replaces all that paper and streamlines and organizes the bank’s appraisal workflow while also keeping them in compliance with all the regulations they’re required to obey. Basically, we provide solutions that make the mortgage process more efficient and secure and that’s all good.”

So how does FNC fit into the U.S. residential real estate engine that represents 24 percent of U.S. GDP annually?

“We’re a niche part of the biggest financial market in the world. We build software that enables residential mortgage lenders to communicate with appraisers so they can receive and review appraisals,” Evans added.

FNC’s early years on the Ole Miss campus reflected constant software development and fine-tuning a product that the company founders believed would revolutionize the industry. In 1999, the company signed agreements with Charter One Financial before landing Bank of America in 2000, and then Washington Mutual Mortgage in 2001.

Despite hard times in the housing market in recent years, FNC has continued to grow through visionary leadership and innovative services and products.

The company’s primary product is appraisal software that is used by lending institutions and appraisers to make the home appraisal process more transparent, secure and uniform.

“When the bank hired an appraiser in the old days, the appraiser would use a variety of printed forms, but we offer a an automated software program accessible on laptop, desktop or mobile device that enables the appraiser to communicate directly with the bank based on industry standard guidelines,” said Mike Mitchell, FNC’s chief strategy officer. “There are other competing software products available today, but the question is ‘What product will give appraisers and banks the best results?’ Ours is the best available. Our software gives all parties the highest probability of getting the correct appraisal”

Mitchell says that 80,000 appraisal firms around the country have accounts on FNC’s website, AppraisalPort. The appraisers report back to lenders who use an FNC-developed Collateral Management System to produce guidelines called GAAR — Generally Acceptable Appraisal Rules. The awful sounding acronym is nothing more than a set of rules used to evaluate appraisals used for lending decisions.

“If the appraisals are based on uniform rules, then the likelihood is a house valued at $275,000 will really be worth $275,000,” Mitchell said. “That means that the bank can make a good, informed lending decision that minimizes risk and keeps the housing market performing efficiently.

Evans adds that FNC is working with a firm in Brazil to take the technology to the booming Brazilian housing market.

Evans is quick to point out that the reliability of FNC’s appraisal software is only as good as the integrity of the appraisers and lenders who use it. “FNC doesn’t sell appraisals,” he adds. “We don’t pick appraisers. That’s the bank’s role and that decision for good or bad controls the result you get.  We don’t do the appraisals; we just provide the software system.

Rayburn believes FNC’s product can have a positive economic impact beyond the company’s bottom line. “Our software system is faster, more accurate and more efficient,” he said. “We think facilitating accurate appraisals can improve the housing market, which is good for the economy as a whole.”

Another aspect of the FNC business model is evaluating housing data for clients. The company compiles data on more than 110 million U.S. properties. Analysts can access and extract data on residential areas across the country in 925 data fields. “They might be looking at comparable sales of  three or more homes  ranging from $300,000-$400,000, Mitchell explains. The operation is managed out of FNC’s Costa Mesa, Calif., office where we have about 30 employees.”

Through this data and related software, FNC can offer lending clients sophisticated analytic products that allow them to assess appraisal quality and produce broad benchmarks such as the Residential Price Index, which demonstrates important economic trends in housing.

FNC's innovative software is revolutionizing the mortgage business.

FNC’s innovative software is revolutionizing the mortgage business.

Evans sees FNC’s role in the housing market as a bridge to increased transparency: “We provide the tools and the lenders and appraisers use the tools to efficiently drill down down on risk.”

The problems that have plagued the housing market and mortgage solvency in recent years have largely arisen because of a lack of transparency. As government regulators and the private-sector investors commit to higher scrutiny of real estate transactions, FNC’s high-quality products become more viable and in demand.

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FNC tracks employees’ hometowns on this wall.

Rayburn agrees: “Our company has a very bright future. Our products, when used properly, will provide strong transparency to help lenders and appraisers answer the question of what really is the value of the house. The definition of risk is uncertainty and our company is dedicated to lowering uncertainty in the housing market.”

FNC leaders agree that the company is committed to Oxford. “Talented, innovative people make our company go and this is a great community from which to recruit,” Mitchell said. “We hire a lot of Ole Miss people and when we do woo someone from Atlanta, or Austin or the East Coast, they love the quality of life here. I can honestly say we’ve never lost one employee candidate who visited us here.”

The FNC work force, mostly software developers, has grown from the original four professor founders and three other employees to 275 today, and is on the way to more than 300 with expansion. The FNC work culture takes a page from the West Coast high-tech computer giants who spawned the current technology revolution.

“Our employees enjoy an open culture with freedom and flexible work hours and fitness classes. We pride ourselves on being green with real upward mobility and a dedication to community involvement,” Mitchell said. “You’ll find FNC people involved in the Humane Society and the Rotary Club. I’d guess there’s very few clubs, churches or volunteer groups that we’re not involved in. At the corporate level we maintain active partnerships with Ole Miss, Oxford and Lafayette County and we’ll continue to increase that support as the company expands.”

That’s good news for Oxford, and it sounds like our area and the rest of the World, will be getting to know what FNC means to a healthy economy led by a resurgent housing market.

Story and photos by Andy Knef. Knef is the editor of HottyToddy.com and he can be reached at Andy.Knef@Hottytoddy.com

 

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