LenderTechnologies

To serve as an advocate for the advancement of mortgage banking technology, information solutions, products and services
To partner with businesses that can provide services and resources to our members and other industry players
To provide a potentially wide range of products and services that build on LTC and MBA expertise and resources

QUESTIONS ABOUT THE RFP

Responses to the many questions and comments received on the Draft RFP are posted below. All remaining responses have been posted.

Questions answered on April 16, 2008

Questions answered on April 29, 2008

Questions answered on May 14, 2008

April 16, 2008

Q: We came across the press release & knowledge of the RFP process. We want to respond to the RFP jointly with software vendor partners. Since we just came to know of this initiative & we had missed out on responding to RFI earlier or participation in discussions on draft RFP. I wanted to check if there will be any issue with our response being considered for evaluation.

A: While the deadline for comments and questions has closed, this does not mean that you cannot respond to the Final RFP once distributed. All comments/questions and their responses will be posted to the website shortly. All interested parties are free to review them. Participation in the RFI and Drafting process are not necessary in order to respond to the Final RFP.

April 29, 2008

Note: Question numbers represent internal numbers and have no significant meaning to respondents.

Confidentiality/Privacy

Q: Subscribers network and invoke/revoke accesses shall be part of FPD system. FPD to be private networked application rather than internet-based? Separate window/tunnel to be provided for investors accessing information through the internet?

A: There is no specific requirement for the transport mechanism. The requirement is strong authentication (FFIEC Internet Banking), confidentiality, integrity and availability (CIA). All access to the FPD will be accomplished via system-to-system interfaces in Phase 1, for all lender and investor participants.

General

44.

Q: Is there any flexibility in development time schedule? 65 days from contract award, the system needs to be ready to implement?

A: The proposed development time schedule is admittedly aggressive, and reflects the concept that some bidders may have a level of pre-existing infrastructure which might be leveraged to accomplish a fast implementation. Bidders should propose a schedule which accurately reflects their ability to implement the FPD.

48.

Q: If a Bidder can demonstrate significant and important opportunities for improving the value and impact of the FPD how significant will that be in the award of the contract?

A: Within the scoring methodology (Section 5.11) there is the ability to receive extra credit for significant and important opportunities for improving the value and impact of the FPD. The final RFP will include more specific details on quantifying such extra credit.

49.

Q: If the bidder can accelerate the time frame, how significant will that be in the award of the contract?

A: Early service delivery will be weighed as part of the evaluation process. Basic requirements, value added features, early delivery and overall experience will all be considered in bidder responses.

50.

Q: How will subscriber feedback be collected and processed to insure that Phase I and II functionalities and reports evolve to improve the value of the FPD?

A: Subscriber feedback will be collected as part of the overall subscriber management infrastructure, and will definitely be instrumental in helping to develop and improve the capabilities and industry value of the FPD.

51.

Q: What role will the LTC and IWG play in the ongoing evaluation and refinement of the FPD?

A: The IWG and NewCo (not LTC) will have a direct role in the ongoing evaluation and refinement of the FPD.

54.

Q: The RFP focuses on skill sets for the creation and administration of the FPD however, developing and operating the FPD will require administrative and legal abilities that may require consultants or acquiring partners. Does LTC & IWG encourage hiring consultants or partnering to enhance breadth of management and industry experience to ensure successful operation of the FPD?

A: LTC encourages Vendors to partner as they see necessary to provide the best services and proposal. If Vendors do so choose to partner, please be aware that they should choose a "lead" as primary contact when responding to the RFP.

57.

Q: Are proposals due by May 23rd or April 30th? Table 2-1 (page 9 of RFP) states May 23, while section 5.1 (page 27 of RFP) states April 30th.

A: This error was corrected on April 10 and an update RFP was posted. The dates in Table 2-1 are the correct dates and the incorrect dates on page 27 were corrected.

IPR

15.

Q: The RFP references the inclusion of a non-compete clause in the resulting contract. We currently provide risk mitigation tools and services that closely resemble the database as defined in the RFP. What limitations may be included in the clause and will the vendor awarded the contract have any involvement in drafting the language?

A: Any non-compete clause developed would exclude prior work created by the selected Vendor and would be narrowly drawn to the specific functions and purpose of the FPD.

16.

Q: There are concerns with confidentiality clause stated in paragraph 2 of the Introduction. The limited scope of the confidentiality protection, as currently written, for our intellectual property and client/contract information may restrict our ability to fully disclose critical elements and information to LTC. FIS recommends that LTC reconsider the limited coverage of the confidentiality clause and execute Non-Disclosure Agreements with each RFP participant as well as all "Industry Working Group" participants such as Fannie, Freddie, MBA, etc.

A: Attorneys for several IWG participants were adamant that LTC not assume confidentiality obligations on behalf of the IWG participants whose representatives will be reviewing and acting upon the RFP responses. All proprietary information of the bidder (such as financial documents etc) shall maintain confidentiality; however the general content of the proposal shall not be deemed confidential.

31.

Q: With regard to IPR, was it LTC's intent that it or NewCo would be entitled to the rights to IP that was developed and funded by the Operator? If so, would there be any compensation paid to the Operator for such rights?

A: Neither LTC nor MBA will have any rights to IP developed for NewCo. As between NewCo and the selected vendor, IP rights will depend on the final business structure established between NewCo and the selected Vendor. A proposed FPD Pricing Models reference will be incorporated in the RFP and can be found below. Models A and B would leave all rights developed by Vendor for NewCo with NewCo and compensation structures would provide a return to the vendor for the value of work provided. To the extent that a vendor intends to build the FPD using its existing proprietary IP rights, requisite licenses would need to be identified in pricing proposals. Model C would allow for shared rights.

Legal Support/ Compliance

19.

Q: The legal considerations that should be added to the RFP document include: (a) who is responsible for handling the legal review of issues related to the development and use of the fraud database , including the associated legal costs; (b) data portability, which is critical; and (c) compliance with the Fair Credit Reporting Act and other applicable statutes.

A: Will largely depend on the business model selected. A proposed FPD Pricing Models reference will be incorporated in the RFP and can be found below.

30.

Q: Specifically, what does it mean that the database will be operated as an "industry utility"?

A: It is intended that NewCo earn a rate of return consistent with giving a vendor a reasonable return and allowing NewCo to adapt to member needs as mortgage fraud evolves. The idea is not to maximize shareholder return but rather provide a reasonable return to those entities that provide seed money to the project.

36.

Q: Aside from reporting info back to subscribers, are there any requirements to report out to other 3rd parties for compliance purposes (i.e. FBI, other Gov't Agencies, and Industry org's.)?

A: While we are not currently aware of any requirements, the IWG has briefed the federal financial institution regulators and law enforcement agencies on the FPD initiative.

37.

Q: Will law enforcement agencies have access to the system? If so, under what conditions?

A: To date, this is an open question. Although federal law enforcement agencies have been briefed on the general FPD, it is not anticipated that law enforcement agencies would participate until a Phase 2 is launched to assure proof of concept.

39.

Q: Aside from matching between records submitted to the database, will any data validation checks, using either government or commercial databases, be required to identify possible fraud activity?

A: With the exception of the normalization of the addresses (property) data elements, Phase I has no requirement for external database validation checks. Vendors are free to propose additional validation checks that would increase the accuracy of the database.

43.

Q: Who will be responsible for drawing up subscriber and member contracts? LTC, NewCo or awarded company?

A: Subscriber contracts will be agreements between the subscribers and NewCo, from a legal viewpoint. The awarded company will execute the day-to-day management of those agreements.

52.

Q: There are clearly other possible applications and benefits of the FPD, such as identifying high fraud regions, tracking industry trends, and quantifying regional issues that could be produced if subscribers volunteered to be included in various studies. Does LTC envision such possibilities?

A: LTC and the IWG do envision many possible future applications and benefits of the FPD, as do many observers and potential bidders. The scope of Phase I operation has been deliberately limited to help reach initial rollout as quickly as possible. No specific plans have been defined for additional applications, but we recognize that potential.

62.

Q: What type of entities does LTC anticipate will be the primary subscribers to the FPD? Is this limited to firms primarily involved in the primary market (brokers, lenders, mortgage insurers, appraisers, title insurers, and closing agents)? Does LTC anticipate secondary market investors and issuers, fixed income insurers, ratings agencies, and regulators
also subscribing?

63.

Q: Section 1 of the RFP states, “The FPD, therefore, will not be available for data mining.” Was this intended to mean the FPD will not be available for data mining for purposes other than Fraud detection? Please clarify this stated restriction, as it would likely affect the FPD’s adoption rate and effectiveness in Fraud prevention.

A: The data will not be available for generalized data mining for any purposes other than Fraud detection and shall not be available for mining by any party other than NewCo except to the extent a subscriber grants a service provider agency status to deal with its data under a sublicense conforming to terms that NewCo prescribes.

64.

Q: Section 1 of the RFP states, “Loan data provided to the FPD will be licensed to the FPD.” From whom will the data be licensed, the data owners (i.e. the subscribers that enter the data) or “NewCo”?

A: The owners of the data (the subscribers) will license the Data to NewCo for limited use in the database. The owners of the data will retain all right and ownership of the data.

Liabilities & Risks

17.

Q: In addition to the non-disclosure concerns noted above, there are concerns with the release and obtaining authorizations from lenders for the usage of such data.

A: There is no authorization for the use of the data other than specific FPD operations.

21.

Q: What are the general liabilities and risks to the owner of the system & database?

A: Although ample precedent for the proposed activities exist that provide guidance on legal structuring, the general issues relate to consumer privacy rights, defamation and information security.

55.

Q: The RFP states that the proposal "should include proof of ability to obtain insurance, Situs of incorporation, and proof of ability to conduct business in the District of Columbia". Would you please expand on this requirement?

A: Vendor should provide proof of insurance (such as a certificate of insurance), indicate the state in which vendor is incorporated (a certificate of incorporation). The requirement for proof of ability to conduct business in DC will be removed.

Operations

Q: The very large database will be commissioned for the national Real Estate Fraud Protection Database (FPD). Will it initially carry past 7-years data which is not terminated / closed? Are plans drawn to capture this data into the database which would call for one time migration activity?

A: It is envisioned that the participating lenders will submit a bulk loading of data to initially populate the database.

Q: There are two aspects specified. Development of FPD and administer FPD permanently. Arriving at infrastructure requirements would be a preamble to development. Is infrastructure decisions already taken by LTC? Will it be part of SRR?

A: Infrastructure requirements should be inferred from the detailed System Requirements in Appendix A.

Q: If notifications and other alerts by the system need to be provided through e-mail system alone

A: FPD communications to subscribers (i.e., NAs or Notification Alerts) will be system-to-system. Subscriber management communications or notices will primarily be accomplished via email.

Q: The operational reports will tailorable and provided. The tailoring need to be online by Administrators of the system or through change requests these will be tailorable?

A: The specific formats and details of operational reports will be fully defined during the FPD development phase. Bidders may recommend report management structures as part of their proposals.

13.

Q: The timeline presented in the RFP does not include system operation and maintenance phase. Should this be provided after Phase-I and Phase-II are completed?

A: System operation and maintenance will logically commence when Phase I design and testing are complete.

29.

Q: Will there be actual live mortgage application data to use for test and acceptance testing?

A: The IWG intends for real-world mortgage test data to be available for acceptance testing. The exact details of this test data are not specified at this time.

68.

Q: Section 3.1 states that one of the objectives of the FPD is, “reducing the risk of loss associated with [fraudulent activities] to a more manageable level than currently exists.” Will there be metrics, reports, or success criteria based upon a comparison of historic and current risk loss levels due to Fraud? If so, will these results be determined by MBA, ‘NewCo’, FPD Vendor, subscribers, &/or by an independent entity?

A: The FPD will report on operational information such as LDS, IR, and NA. Statistics measuring the impact to the industry may well be compiled by outside entities, and may be difficult to measure accurately.

Revenue/Compensation/Ownership

FPD Pricing Models

The RFP will outline three pricing models which will aid with the clarification of revenue, compensation and ownership. Respondents should use one or all of these models when drafting their RFP response.

Model A:

NewCo front ends the cost for development of the FPD and pays Vendor for services via contract. Once development is complete, a maintenance and service agreement will be put into place. All ownership and IP rights will remain exclusively with NewCo. All transaction revenue would remain with NewCo.

Model B:

Vendor front ends the majority of costs for development of the FPD and in return will receive X% of the transaction revenue for X number of years. All ownership IP rights will remain exclusively with NewCo.

Model C:

Joint Venture/Partnership/Investor relationship is established between NewCo and Vendor wherein the ownership of the FPD and the IP Rights will be shared as will the costs for development and the transaction revenue.

Vendors should address each pricing model either by providing pricing under the model or specifically stating that they would not be willing to operate under a model. If Vendors would like to suggest another pricing/business model, LTC will entertain other suggestions.

20.

Q: How will the ownership structure for the system and database be considered, especially with relationship to termination?

A: This will depend on the final business structure established between NewCo and Vendor. Models A and B would require a negotiated termination clause, while model C may involve changes to the corporate structure of NewCo.

23.

Q: Should bidders count on any external investment from the MBA, LTC or subscribers/partners?

25.

Q: It is not clear whether the Operator or NewCo will have control over certain functional requirements. For example in Section 3.3.3 - Range - who decides what is an acceptable range? Same question for Variance within the same section.

A: Functionality described in Section 3.3.3 is for possible Phase II operation, and can be fully defined only after Phase I operation has been achieved.

27.

Q: Please specify in Section 4.1.2 when the Business Process Requirements will be available.

A: Business Process Requirements will be included in the final RFP.

28.

Q: Does the winning Bidder maintain control of the system design specification, system architecture, hardware/network system design and implementation of such designs?

A: Yes, the vendor will be responsible to maintain control of all these activities. Level of control will depend on the business structure established.

32.

Q: How will compensation for operating the database be determined? Will it be based upon the number of companies that use the data?

58.

Q: What is the process by which LTC’s successor (a.k.a. “NewCo”) will be identified, established, and authorized to conduct business, i.e. per section 4.3.3, “execute agreements with each organizational subscriber…[and participate in]…a revenue sharing agreement…with the Vendor.”

A: NewCo will be established prior to contract execution. Depending on the business model agreed upon between NewCo and Vendor, Vendor will either enter into a final contract with NewCo or become and investor/partner with NewCo. Neither MBA nor LTC will have a controlling interest in NewCo.

59.

Q: Will LTC/NewCo fund the winning Vendor for the upfront system design and build costs and a reasonable rate of return? Alternatively, is LTC/NewCo’s preference a build out by the Vendor who then recovers their initial system design & build costs and gains a reasonable rate of return based on subscription revenue sharing – or some hybrid of these two options?

60.

Q: Given the question above, what is IWG/LTC’s estimated annual subscription revenue from the FPD for the first 4 years of operation and what are the assumed margin limitations on this revenue stream given the statement that the FPD should be run as an “industry-utility” and not a “profit maximizing entity”?

61.

Q: Can you elaborate the current thoughts regarding the subscription service; Are you open to considering different revenue models? Are any models NOT to be considered?

65.

Q: Appendix G., Section B.1 states, “The right, title and interest in all intellectual property developed during the term of agreement and as part of the provision of services or products hereunder will be owned by COMPANY.” Does LTC view this statement as negotiable under alternatively proposed funding arrangements for both system build and operation?

A: Yes, this statement will depend on the business model chosen between NewCo and Vendor.

66.

Q: Section 2.2 of the RFP has several bullets related to the governance of data quality, security, and subscriber content contributions. Is it anticipated that this governance will be administered and enforced by “NewCo”, by the Vendor, or a combination?

A: This will depend on the final business structure established between NewCo and the Vendor. It is envisioned that these entities will have shared responsibilities.

Sales & Marketing Support

18.

Q: As with any project utilizing a subscriber model, the success of the FPD project will largely depend on the commitment of the largest industry players. Have all the members of the IWG committed to becoming Subscribers/Contributors to the FPD?

A: The Industry Working Group (IWG) initiated the project and has substantially funded the development of the requirements, RFI, and RFP. This financial and resource commitment from the IWG demonstrates their intent to fully utilize the final product.

42.

Q: Will it be the responsibility of the awarded company to sign up subscriber companies or will 'NewCo' need to have dedicated sales support?

A: NewCo will be responsible for exercising Subscriber agreements and the vendor will be responsible for registering and managing approved NewCo Subscribers.

45.

Q: Broad and rapid enrollment in the FPD will be a large factor in the success of the FPD. What commitment is there from the LTC and the IWG to ensure that there will be broad adoption of the FPD?

A: Dupe of 19

46.

Q: There are many factors that will impact industry acceptance of the FPD beyond the support of LTC and the IWG such as price, ease of use, responsiveness, accuracy, security, and reliability. Will the LTC and IWG make the elements essential to broad acceptance significant factors in the award of the contract?

A: LTC and the IWG are fully committed to the broadest possible adoption and success of the FPD. To that end, they will consider all factors and suggestions to facilitate that success.

47.

Q: The RFP states, "Create a target service (i.e. database & process) that is an industry utility, rather than a profit maximizing entity" and "Establish reasonable fees". Are these statements in conflict? If fees are reasonable but allow room for profit, is that an issue?

A: Subscriber fees for the use of the FPD must be sufficient to fund full operation and possible future enhancements, yet be low enough to encourage the broadest possible use of the FPD as an industry utility. Depending on the funding model between NewCo and the vendor, fees that allow for a reasonable profit are certainly possible.

System Maintenance

14.

Q: The RFP makes no reference to ongoing system maintenance and operations following the end of the fourth one year option. Will LTC or its successor assume all operations and system maintenance after this period or will a new bidding process begin? Please elaborate.

A: LTC anticipates that NewCo and the FPD vendor would continue to operate the system long-term, assuming the industry partnership and FPD operation have been successful. No specific commitment can be provided at this early stage, however.

Technical Requirements

Q: MERS Mortgage Identification Number (MIN). We assume this to be Mortgage Electronic Registration System. Is there a web service (or any other invoking facility) provided to access this system for validation purposes?

A: Detailed information on the MIN (Mortgage Identification Number) assignment and usage is contained on the MERS (Mortgage Electronic Registration System) website, www.mersinc.org.

Q: The alerts assumed to be formatted using a reporting tool prior to publishing by adapting results obtained from FPD? Will the contents of the alerts be standardized at design time?

A: See Appendix D for data contents of Notification Alerts (NA) and Incident Responses (IR), and Appendix B for detailed data elements. These alerts will not be formatted as reports but will be system-to-system data transactions.

Q: How SSN numbers could be validated for authentication or correctness. Should it be coupled with Tax-payers ID (TID)? Could SSN be verified through web service access?

A: There is no requirement in Phase 1 for SSN validation. Appendix B contains Tax Identification Number (TIN) elements for business entities associated with the FPD. Vendors are free to propose additional validation checks that would increase the accuracy of the database.

Q: The Phase I will include only Machine-Machine interface development. Would there be a need to have a User interface design to manage administration activities like creating and maintaining subscribers and their access rights

A: The Machine-Machine interface requirement is for LDS, IR, NR and FPD response transactions. The methodology for subscriber administration has not been fully defined, but it is likely that a user interface will be required.

10.

Q: How many levels of access restrictions to be applicable in displaying the data in screens, reports?
• Location Specific
• Functional Module level
• Page level
• Field level
• Any Other Restriction

A: We assume this question refers to system administrator access and not to subscriber access, since subscriber communications have been specified to be system-to-system. Specific levels of access restrictions for the system administration staff, such as those described in the question, will need to be defined. Vendors should recommend access levels and mitigation techniques as a result of their risk assessment.

11. Q: What is the number of total/simultaneous and concurrent users that will be accessing the system?

A: Subscriber submissions are system-to-system asynchronous transactions. It is envisioned that relatively few subscribers would ever be simultaneously accessing the system for account management purposes.

12. Q: The entire interfaces, pages, documentation assumed to be in English. Is there localization required to be built in – whether it is all pages and controls / only error messages / only data?

A: Primary use is for the US mortgage market. English is the only language requirement.

26.

Q: Please specify in Section 3.3.4.2 what "demographic specific NA's issued" would include.

A: This Phase II functional report envisions an analysis of NA s issued according to some specific demographic factors (state, entity's role, etc), which are not fully defined at this early stage.

38.

Q: Will the MISMO standards be required for all subscribers? Should there be consideration for accepting other data formats? Will XML be the only transmission supported? What about FTP, MQ, manual web entry, etc.? What type of output formats to subscribers will be required (XML, Web user interface, PDF reports)?

A: While MISMO-based XML standards will be the primary form of system-to-system transactions, consideration for other data formats may be given in order to facilitate broader industry participation.

41.

Q: There are some additional data elements we have found useful in the detection of mortgage fraud. If feasible, we suggest that you add these input fields to Appendix B, Data Elements:
-Credit Bureau Score
-Years in Profession
-Years in Current Job
-Self Employment Indicator
-First Time Home Buyer Indicator

A: Thank you for your suggestion on additional data elements. Vendors are permitted to propose enhanced data elements or enumerations to improve the quality of the database. However, all vendors proposed enhancements will require approval of NewCo and the IWG.

53.

Q: What roles will the LTC play in the choice of Strong Authentication methods? Can the LTC provide more specific guidelines if Strong Authentication methods will be a significant factor in the award of the contract?

A: The LTC and IWG are aware of the issue of privacy breaches and identity theft. Strong authentication best practices will be considered as part of the overall bid evaluation.

67.

Q: In Section 2.2-Project Scope, Page No.8, RFP states, “This RFP describes a very large database project which will need to provide data security, data integrity, and near-real time responses to subscriber data submissions”. What is the mechanism by which subscriber data is submitted into FPD system? Are there any preferred mechanisms proposed for the subscribers to connect to the FPD? How many subscribers are likely to use the system? Are there any preferred channels that LTC is currently considering to allow the subscribers to input IR data?

A: As stated in the RFP, loan data submissions into the FPD will be accomplished by machine-to-machine direct interfaces. Phase I has no requirement for direct human interaction or browser support. The transaction model will be business-to-business (B2). This model implies a limited number of partners, but does not restrict the number of transaction or data. Other than a Subscriber's service provider there are no other channels permitted. Support for browser is a Phase II query language feature.

69.

Q: In section 3.2 - Terms and Definitions, page no.10, RFP states, “A set of loan data sent in standardized format from an FPD subscriber at various times during the loan process (application, pre-closing, post-closing, etc…).” What is the standardized format that LTC is referring to?

A: Review Appendix E Loan Data Submission (LDS) Content for an abstract of the transactions. The fields will be mapped to Appendix B Data Elements.

70.

Q: In section 3.3.1 - Phase I Functional Operations (Initial Capability), page no.12, RFP states, “The database will be designed to maintain a registry of all subscribers of the system. It will be required to manage all subscriber registration information, including initial registration, maintenance and modification of subscriber information and deletion of subscribers terminating their relationship with the FPD.” With regard to creation/maintenance of subscriber information, is there a need for a “user interface” to be created? If yes, are you seeking an interface recommendation from the vendor or have you concluded e.g., Client/Server based or Web based?

A: Vendors have the flexibility to propose their own solution for registration.

May 14, 2008

Confidentiality/ Privacy

127

Q: Can the reason behind the decision to suppress (non-disclosure) of the MIN between parties be explained, is this not a common identifier which will assist in locating individual loans during investigations involving multiple parties (particularly when dealing with multiple accounts in fraud ring investigations etc)?

A: Since the MIN may identify the reporting entity (via the Org ID), it is suppressed to maintain confidentiality.

General

Q: Can you provide a technical, data, and business process architecture/schematic of how you see this database solution fitting with other industry data inputs and outputs? What are the known or assumed technical and/or process constraints?

A: The assumption is that the FPD will interface with Loan Origination Systems (LOS), underwriting systems, pre/post closing platforms and QC systems. Phase II may add online query support for Loan Officers and QC personnel.

Q: Has the MBA/LTC coordinated with the National Association of Realtors (NAR) on interaction between the proposed FPD and the set of disparate MLS systems, or if deemed in scope, will this be a responsibility of the Vendor?

Q: Has the MBA/LTC coordinated with state-county governments on interaction between the proposed FPD and the set of disparate county tax & land ownership recordation systems, or if deemed in scope, will this be a responsibility of the Vendor?

Q: Please provide a list of the members of the IWG that hold ownership interests in a few of the respondents to the previously listed Request for Information

A: Section 5.8 of the Final RFP will address Conflict Procedures. It is LTC and the IWG's policy to avoid any conflicts. However, in order to avoid ex parte communications, disclosure of the IWG members will not occur at this time.

Q: Has the timing for Phase II been determined yet and if yes what is it?

A: No specific dates have been determined for Phase II.

100

Q: How will the RFP responses be managed? Will the responses be publicly available? If so, what will be displayed and how will it be available?

A: RFP responses will be carefully managed and will not be made publically available, since they may contain proprietary information that respondents would not want their competitors to view.

101

Q: There are several requirements of the selected vendor listed in the draft RFP with regard to response time frames and deliverables which may be dependent on responsiveness, dedication of personnel, and similar service levels from the MBA/LTC which are not defined which may affect the cost of meeting the RFP requirements.

A: This is a reasonable concern. LTC, the IWG and NewCo will make every effort to be responsive to vendor questions and issues as they arise.

104

Q: Section VIII of the RFI described a “funnel process” to limit RFP response. Who is eligible to bid on the RFP and has that changed from the RFI?

A: In order to limit RFP responses to a manageable number, the RFP contains language specifying that qualified respondents must have at least three years

105

Q: There are inconsistencies throughout the document with the mixed usage of the terms “NewCo”, “Successor” and “LTC’s Successor” which should be reconciled or better defined.

A: Every effort to correct inconsistent terms will be made prior to the release of the RFP.

109

Q: The RFP Response date is stated as May 23rd, 2008 which is contrary to the date of April 30th, 2008 in Section 5.1. Please confirm the RFP Response date.

A: This error was corrected on April 10 and an updated RFP was posted. The dates in Table 2-1 are the correct dates and the incorrect dates on page 27 were corrected.

115

Q: In Table 4-1 please define the days as business days or calendar days.

A: The reference is to calendar days. Clarification of days and dates will be added to the final RFP.

120

Q: Will project reviews take place virtually or at a specific location?

A: Project management and reviews will be negotiated with Vendor after award of the contract. An assumption is that major milestones will require on site presence.

131

Q: Can LTC provide some clarification about the differences between deadline dates found in different sections of the draft proposal?
• Questions submission date 4/11/2008 vs. 4/18/2008?
• Proposal submission date 05/23/2008 vs. 4/30/2008?

A: This error was corrected on April 10 and an update RFP was posted. The dates in Table 2-1 are the correct dates and the incorrect dates on page 27 were corrected.

136

Q: Can LTC provide additional information regarding the functionality for registration, appeal and workflow processes?

A: The RFP has been modified to include additional information on registration and the appeals process. No additional information will be added for workflow.

137

Q: Does LTC expect both Phase I and II to be completed in the base year?

A: No. Just Phase I is expected to be completed.

145

Q: The page limit on the volume abstract indicates 4 pages, while Table 5-1 indicates a 3-page limit. Can you please clarify?

A: The final RFP will indicate the correct page limitations and Table 5-1 and associated text, regarding page limitations, will be aligned.

146

Q: Do the page limits identified reference the number of “sheets” or “page numbers” (i.e., for a 4-page limit, is that 4 sheets of paper double-sided that would equate to 8 page numbers, or is it referring to 2 sheets of paper double-sided that would equate to 4 page numbers)?

A: The page limit equates to page numbers (i.e. for a 4 page limit, it is 2 sheets of paper double-sided).

147

Q: The “project management approach” section of the response requests a “detailed master project schedule” to be included in our response. Can you provide more insight into what level of detail you are looking for?

A: The master project schedule should be at a sufficient level of detail to indicate the projected timelines for all design and development activities and should include the critical path events to achieve the schedule

148

Q: Under the “project management approach” section of the response, it requests the Bidder to “present an analysis of programmatic risks and the associated risk mitigation strategy.” Can you clarify whether you want our approach or to come up with this analysis based on reading the RFP? Also, can you clarify as to the level of detail desired?

A: The Bidder’s analysis of programmatic risks and associated risk mitigation strategy should be based on the bidder’s approach to designing, developing, delivering, operating and maintaining the system described in the RFP. The Bidder may utilize any approach they like but at a minimum the risk analysis and mitigation strategy should focus on the risks and mitigation strategy for the following areas: 1) Cost: Development cost and Lifecycle cost, 2) Schedule: Development Schedule, 3) Technical: Technology/Security, Personnel Availability and Complexity, and 4) Programmatic: Consistency with Customer Needs, Legal and Operational.

Legal Support/ Compliance

Q: Please clarify the statement in Paragraph 3.3.2, "Vendor may be required to notify select parties identified of performing wrongdoing".

A: The final RFP will address notification and adjudication procedures and requirements.

Q: As analytics are added in phase 2, will the MBA or NewCo plan to permit those MBA members that already offer such analytical solutions and thus would be potential competitors of NewCo to have access to the database?

A: At least initially, the subscribers will be mortgage lenders that fund loans at closing, mortgage servicers because they bear financial risk in the event of fraud, and mortgage investors, given that they also may bear a risk of loss in the event of fraud. Subscribers will be authorized to designate third-party service providers as their agents for purposes of submitting the subscribers' data and receiving responses from the FPD. The service providers may also be able to perform analytics on their clients' data under a sublicense conforming to NewCo prescribed terms, including but not limited to protection of consumer data. Although NewCo through its vendor may provide some fraud analytic services, other vendors may continue to provide services. The IWG recognizes the potential value of allowing fraud prevention and detection vendors to run analytics on the full FPD dataset. It is possible that future enhancements could provide such capability, but there would be numerous issues to resolve first.

Q: Has the MBA established a framework for who will be able to access the aggregated industry data as a Subscriber? Will access to the data be limited to Lenders or will the information be provided to other interested parties, such as technology vendors who may wish to use the data to create additional fraud prevention services?

Q: Has the MBA considered the implications of the FPD in regards to the Basel II Capital Accord? Does the MBA anticipate that the FPD could be utilized by lenders to meet their requirements under the Basel II Capital Accord, especially in regards to the operational risk requirements of the Advanced Measurement Approach?

A: It is too early to predict what applicability, if any, the FPD will have for lenders under the Basel II framework.

102

Q: Please clarify how the RFP respondents will balance the requirement in 5.2 (page 26-27) to provide detailed responses to demonstrate compliance with the RFP (which may or may not require the disclosure of intellectual property) versus the lack of confidentiality/restriction in LTC’s use of that information?

A: Attorneys for several IWG participants were adamant that LTC not assume confidentiality obligations on behalf of the IWG participants whose representatives will be reviewing and acting upon the RFP responses. All proprietary information of the bidder (such as financial documents) shall be maintained confidentially; however the general content of the proposal shall not be deemed confidential.

106

Q: Please describe the intended legal protocols requiring compliance. Pg. 5

A: Specific procedures will be established in the Subscriber's Agreement and the internal rules of NewCo. The appendix lists applicable laws and regulations.

110

Q: The state where Vendor “…may be required to notify selected parties identified of performing potentially wrongful acts…” may materially affect the RFP response and cost and should be additionally clarified.

A: The final RFP will address notification and adjudication procedures and requirements.

114

Q: If an IR appeal process is a requirement of the RFP then this section needs to be defined as it may materially affect the RFP response and cost.

A: The final RFP will address notification and adjudication procedures and requirements.

142

Q: There are a few areas identified in the RFP requiring command of laws and regulations, including potential functions regarding notifications in accordance with laws and regs. To what extent will LTC or MBA’s legal counsel be involved? Can you provide more insight into the Vendor’s legal responsibilities in order to more fully understand the extent of the legal role on the Vendor’s team?

A: LTC and MBA will not be involved at all. The extent of involvement by NewCo's attorneys will depend to some degree on the business model, and responsibility for legal compliance may be subject to negotiation. In any event, vendors are expected to be generally familiar with the legal framework controlling the FPD's activities, to conduct their own research into the potential legal liabilities of such a project and to work with NewCo to minimize liabilities.

Liabilities & Risks

Q: Given the importance of data portability with the recent litigation that has transpired with FNC over appraisal data, what risks and liabilities should be covered in developing and operating a FPD system?

A: In that suit, a group of professional appraisers sued a major mortgage technology firm, charging that it systematically took their appraisal report information, warehoused it, and marketed it to lenders and developers of electronic substitutes for traditional appraisals. Subscribers will provide the FPD with a limited license to use the subscribers' data. NewCo will use the data for the limited purposes of fraud prevention and detection. NewCo will not have the authority to sell or otherwise use the FPD's data.

Operations

Q: Will the FPD have any mechanism in place to track/manage how lenders take action and resolve NAs, IRs and SARs? Collecting and aggregating lender responses to suspected fraud can help identify effective fraud prevention techniques

A: The FPD cannot control or manage how lenders take action to resolve suspected issues of fraudulent activity. Subscribers do have the responsibility to correct and update IRs if new information can be shared with the other FPD subscribers.

132

Q: Does the LTC expect the system to allow subscribers to self register into the system and upload their own data?
• Does LTC expect to load the system with seed data?
• What is the expected period for data population?
• When does the system need to begin its notification process, i.e. after the system has been populated with a threshold volume of data?

A: Subscribers will apply and establish an agreement with NewCo prior to registration with the FPD. IWG foresees batch submission of data to populate the database and no timeframe or threshold has been identified.

144

Q: For billing and collections, does MBA or LTC currently have such systems that can be leveraged in this process or will the Vendor be expected to start from ground zero?

A: NewCo and the FPD vendor will operate as independent entities and will not have relationships with the MBA and LTC. The FPD vendor is expected to provide the necessary billing and collections capability as part of the subscriber management function.

Revenue/Compensation/Ownership

Q: How will the profit from the database be used by the MBA?

A: The concept behind the NewCo is that the MBA will not have a direct relationship with the operation. Hence, the MBA will receive no direct profits. Additionally, this will depend on the final business structure established between NewCo and Vendor. Models A and B would require a negotiated termination clause, while model C may involve changes to the corporate structure of NewCo. See the “FPD Pricing Models” outlined in the April 28th Q&A.

Q: Has the budget for the project been approximated? How long is it for and has it been allocated between the Build and Maintain aspects yet?

103

Q: Please clarify what the winning vendor delivers to LTC/NewCo as part of this RFP: functionality & services or ownership of code/equipment/intellectual property?

107

Q: What are the expectations on ownership of the “product” if the contract
options for subsequent years are not awarded? Pg. 5

108

Q: If the contract is not awarded for additional years please clarify the
disposition of intellectual property.

116

Q: It is unclear what the definition of “profit or fee” is with regard to “cost” and needs to be defined.

121

Q: Requirement to meet "budget parameters", what are these parameters specifically?

129

Q: Does the LTC expect the vendor to define a business model (i.e. financial model) for LTC or NewCo?
• Creation of Cash flow and Pro forma statements?
• Suggestion of different types of services for subscribers?
• Suggestion of different types of packages and pricing for subscribers?

140

Q: Can LTC provide some additional clarification regarding cost and pricing expectations?
• Does LTC expect to implement a revenue sharing model for payment for services?
• Is LTC considering standard T&M and Fixed Bid proposals?
• If yes, will this proposal be considered under T&M pricing format?

141

Q: Does LTC expect the vendor to price all infrastructure components (i.e. hardware, networking equipment) in the costing model?

A: Yes.

Sales & Marketing Support

Q: How will the MBA or NewCo encourage lenders to participate in the database?

A: Precise marketing and solicitation plans have yet to be determined.

Q: The type of information that the MBA is proposing to collect and share in an industry utility fashion may have significant implications beyond mortgage fraud prevention. Has the MBA formed any specific intentions around using this type of industry utility database for other objectives? Examples include predatory lending protections, and mortgage suitability.

A: Currently, the FPD is being developed for Fraud Prevention Purposes Only. While LTC is aware that the system may have application beyond this, there are currently no plans in that regard.

Q: What are existing plans to market and/or obtain commitment from new potential subscribers prior to launching the design and development of the DB?

A: Precise marketing and solicitation plans have yet to be determined.

Q: How many new subscriber commitments from major market participants are forecast to be obtained?

A: As this project concept is supported by some of the largest originators and investors in the market today, it is anticipated that significant interest will be generated by other subscribers.

Q: Do you have any member banks who have already agreed to buy these alerts once the solution is launched, or are you planning to launch and then attract the lenders?

143

Q: Will there be any sort of mandates to the subscriber community to participate in this?

A: No. Participation will be strictly voluntary. However, members of the IWG have invested significant time and funds to the development of this RFP and it is anticipated that they will subscribe to the FPD.

Technical Requirements

Q: Will the LDS submitted by each subscriber type (i.e. lender, warehouse lender, investor, servicer) on a given loan be stored as a separate LDS record, or will each subsequent record submitted on the same loan be considered an update to the original LDS record? If the latter, how will discrepancies between data elements (i.e. no-match situations with diff SSN's for the same borrower) be resolved?

A: Each LDS submitted by a different subscriber will be stored as a separate record in the FPD, using the MIN to logically link related loan records. Mismatches between key loan data elements may cause LDS submission error responses from the FPD to the submitter. For all LDS submissions by a single subscriber, after the first LDS submission, all subsequent LDS submissions for the same MIN will update the same LDS record, to avoid data inconsistencies and discrepancies. Though this answer expresses our initial design concept, we will rely on the FPD vendor and their technical expertise to make recommendations on how to best achieve the data integrity and consistency linkages desired while supporting data ownership requirements and technical performance optimization objectives.

A: Although a precise XML Schema transaction has not yet been completely defined, Appendix B (Data Elements) and Appendix E (Loan Data Submission Content) provide a detailed abstract of the transactions.

A: Yes, there will be a need for a subscriber management user interface. Vendors may recommend their preferred solution for accomplishing this.

Q: The sequence diagrams in section 3 do not depict interaction with official sources of identity, income, sale price, and Fraud incidents (i.e. local and federal government & law enforcement). What are LTC’s current restrictions or assumptions regarding interaction with data sources outside of primary mortgage market participants, if any?

Q: Req 102 states that a MIN will be used to uniquely identify a loan submission. It appears that MIN’s are not assigned until time of (or close to) loan closing. Therefore, at time of loan application there is likely no MIN number. Are you stating that subscriber systems will need to begin issuing MIN numbers earlier in the process at time of loan application?

A: Essentially yes. MIN numbers are combination of two unique values; organization ID and sequential loan number. The proposal is for lenders to register with MERS to obtain an organization ID number and to manage their unique loan numbers prior to loan closing. In order to effectively manage multiple loan data submissions from many lenders at different points in the loan process, the FPD must have some type of unique loan identification number. If the MIN is not used, the FPD would have to generate a unique loan ID and subscribers would have to modify their systems to receive and store that number for the life of the loan. Since many systems have already implemented the MIN functionality, it would seem to be more preferable than creating a "new" unique loan ID.

Q: Is Database/ETL/Reporting tool evaluation and selection part of the scope?

A: We expect that any vendor who is qualified to bid on the final RFP would already have extensive experience in evaluating database, ETL, and reporting tools, and would recommend specific solutions based on that experience.

Q: What is the technology landscape present in the organization or envisioned for the FPD - Databases, Hardware, Operating systems, Data Quality tools, ETL, Reporting and Data mining tools, Change management tools, etc or are you expecting the vendor to recommend these/other components?

A: We expect that any vendor who is qualified to bid on the final RFP would already have extensive experience in all of these aspects of a large database system, and would recommend specific solutions based on that experience.

Q: Is there any documentation regarding the source (subscriber input systems) (Data Model, Architecture, HLD) available with LTC? What kinds of extracts are expected from the subscriber input systems? Are the source files in fixed format?

Loan data submissions into the FPD will be accomplished by machine-to-machine direct interfaces. The proposed transactions are XML based and mapping between systems is a non-factor in the FPD design. However, it is envisioned that subscribers may initially provide a "bulk load" file of existing loan data to the FPD, which should be formatted in a consistent data structure as well.

Q: As far as Distribution of Notification Alerts, what mechanism is used to deliver/distribute the Notification Alert? Will it be Email, Portal, Report Push, Mobile Apps? Please clarify. Will the content of the "notification alerts" be the same for all the subscribers irrespective of the particular relationship with the elements of the IR (Incident Reports)?

A: The format for Incident Reports (IRs) and Notification Alerts (NAs) are defined in Appendix D. Notification Alerts will replicate the triggering IR data with the exception of the Subscriber and MIN data elements. For Phase I, NAs will be sent to subscribers via the same system-to-system interface used for LDS and IR responses.

Q: Is historical data migration (7 years) part of the scope?

A: The assumption is that Subscribers will provide an initial bulk load of data that may or may not contain historical information. Regardless, Subscribers are not likely to go back 7 years.

Q: It has been stated that in Phase I, all the reports will be standardized, pre-defined (canned) reports. Page 16 also provides some of the data that the reports should contain. Is there any standard format that these reports should follow? If so, how will the formats be defined?

A: The specific formats and details of operational reports will be fully defined during the FPD development phase. Bidders may recommend report management structures as part of their proposals.

Q: What are the ‘real-time’ requirements of the FPD system - in terms of throughput performance and notification alert, etc?

A: LTC and the IWG recognize that the FPD system will be transaction-based, and may ultimately experience a significant load of transactions during normal daily operation. For this reason, synchronous or real-time responses are not required, but asynchronous or transactional responses are expected within a reasonable timeframe of 4 hours or less after an LDS or IR submission.

Q: In order to meet requirements mentioned in Phase II – Functional Requirements (the rules and processing logic), does LTC envision “out-of-the-shelf” data quality tool to be part of the FPD system?

A: The IWG will rely on industry experts to propose analytics and value-added features for Phase II. Vendors may propose in-house or off-the-shelf data quality or other tools.

Q: How do you assess the quality of data present in the subscriber input systems on a scale of 1- 5? (1: Good, 3: Average, 5: Bad)?

A: LTC and the IWG will not assess the quality of data present in subscriber systems. Subscribers will provide data to the FPD in standardized transactions.

Q: Is the MBA prepared to share any additional information related to the “processing logic” and “higher level analytical services” to be developed as part of Phase II? Does the MBA anticipate developing sophisticated analytical capabilities and predictive modeling in Phase II?

A: The IWG will reply on industry experts to propose analytics and value-added features for Phase II. Vendors may propose any additional processing logic or analytical features that they feel will be of value.

Q: It appears from the RFP that lenders will comprise the primary supplier of loan level data to the FPD. Does the MBA anticipate integrating FPD directly with any additional data sources relevant to fraud prevention at some point in the future? Other potential data sources could include the IRS for income verification, the Social Security Administration for identify verification, FBI SAR database, and other proprietary industry databases.

Q: Can you expand a bit on the expected help desk functions? Would the help desk be limited to technical support, or would the help desk be expected to handle other administrative and customer service functions, such as subscriber maintenance, general questions, etc?

A: The help desk will be the primary contact point for technical support, customer service and administrative issues.

Q: In the RFP you request that the vendor run, manage and support the system, we want to confirm that you want to outsource this system in entirety.

A: Yes, under the corporate oversight and management of NewCo.

Q: The picture of the solution and the data fields listed in the appendix look centered around the application data. However, in order to categorize against the fraud classifications listed in the appendix, we think you may have to also have either OEM or get data feeds from other data sources (public and proprietary databases). Is this contemplated or part of the strategy?

A: With the exception of the normalization of the addresses (property) data elements, Phase I has no requirement for external database validation checks. Fraud classification is assigned by the FPD subscriber when an IR is submitted. Vendors are free to propose additional validation checks that would increase the accuracy of the database.

111

Q: Please clarify and explain the intended usage of information from the FPD requiring query development.

A: Online query language support is a Phase II proposed requirement. The feature will allow Loan Officers or QC personnel to submit simple queries to the FPD. The queries will consist of a known data element; borrower, appraiser, etc. and some additional qualifier information such as the borrower's social security number, appraiser's tax ID, or property address details. The response will either indicate no NA information or return any applicable NAs.

112

Q: The requirement for logic to determine data anomalies based on data variances, data ranges, and data match/no matches may materially affect the RFP response and cost. This requires more clarification by User Interface definitions and Use Cases.

A: The IWG will reply on industry experts to propose analytics and value-added features for Phase II. Items listed are proposed features and provide examples of possible enhancements.

113

Q: If a subscriber registration process is a requirement of the RFP then this section needs to be defined as it may materially affect the RFP response and cost.

A: Subscriber registration requirements will be addressed in the final RFP.

117

Q: The display of information from the FPD system has been discussed in the RFP but not detailed with examples, use cases, and or user interface mockups which leaves ambiguities as to the requirements which may materially affect the RFP response and costs. These should be clarified prior to the final RFP issuance.

A: As stated in the RFP, loan data submissions into the FPD will be accomplished by machine-to-machine direct interfaces. Incident Reports (IRs) and Notification Alerts (NAs) are machine-to-machine transactions as well. The FPD will receive a transaction (LDS, IR), update and check FPD and respond to appropriate relationships if an alert is detected.

118

Q: All fields should be defined in number of characters, alphanumeric, numeric, formats, and ranges prior to the final RFP issuance as the technology required to validate input fields may materially affect the RFP response and cost. One simple example is if the date field should be MM/DD/YY or MM/DD/YYYY and if logic and associated quality assurance testing should be developed to allow/disallow date ranges that may seem unreasonable.

A: The primary proposal is for MISMO XML data types for characters strings, amounts and dates.

119

Q: Please define "tailorable" when referring to periodic reports.

A: The specific formats and details of operational reports will be fully defined during the FPD development phase. Bidders may recommend report management structures as part of their proposals.

122

Q: How long should live data be readily accessible in the database? Should there be separate accessibility periods for IR and LDS data? Is it acceptable to archive live data after a certain time period?

A: LDS information will be available for 7 years. IR data will remain active for the life of the FPD.

123

Q: What is the expected response time (Service Level Agreement) when accessing archived data?

124

Q: We assume the 8 seconds processing time relates to single transaction? Would that 8 seconds include the time to connect to our system?

A: LTC and the IWG recognize that the FPD system will be transaction-based, and may ultimately experience a significant load of transactions during normal daily operation.

125

Q: What is the maximum batch size?

A: At this time, no reasonable estimate has been determined.

126

Q: The RFP refers to the process for having multiple subscribers contribute data related to a single loan (identified by a MIN), is it the intention that each subscriber can see the previous investigations, notes etc that have been conducted by any previous subscriber? e.g. if an LDS is submitted by Bank A (which triggers an alert and is cleared) then the same loan is serviced by Servicer B, can Servicer B see everything that was done by Bank A or is the second submission of an LDS totally independent?

A: Multiple subscribers can submit loan data containing similar information, but these are not the same loan as they are originated by different subscribers. Investors and Servicers are permitted to update an existing LDS and once the relationship has been established, receive all Notification Alerts (NAs) associated to those data elements.

128

Q: Can LTC provide additional information about expectations of additional functionality beyond what has been identified in scope for Phases I and II?

A: Given the limited requirements specified for Phase II it would be extremely difficult to define anything beyond what is currently outlined.

130

Q: Does the LTC expect the vendor to include a Data Profiling effort as part of the proposal response? Should this include:
• Definition of Data Quality assessment?
• Assessment of quality of source data?

A: There is no specific requirement, but an assumption that vendor will perform some forms of data validation. Such value-added features will receive additional scoring in the RFP evaluation process.

133

Q: Does LTC expect this system to have interfaces, linkages, processes, and or workflows to integrate policing and governing authorities? For example:
• A workflow management system to allow NewCo or LTC staff to review IRs and forward fraud notifications electronically to governing authorities

A: There is no specific requirements for workflow management and is the discretion of the vendor to design a system to meet the requirements. Subscribers will be responsible for sending fraud notifications to governing authorities – the FPD will not do so on their behalf.

134

Q: Does the LTC expect the system to utilize a rules engine process in Phase I as well as Phase II? For example:
• Phase I requires notification of affected parties based on the submission of an IR report.
• Phase II requires additional rules engine processing and data mining of the IR report and historical data to determine additional levels of fraud.

A: There are no specific requirements for rules engines and is the discretion of the vendor to design a system to meet the requirements.

135

Q: Does LTC expect the vendor to establish EVMS reporting?

A: There are no requirements for EVMS reporting. Vendors have the ability to propose any reporting method that meets the requirements.

138

Q: Based on the conceptual schedule does LTC expect for the system to be operational and actively receiving subscriber information for a period of performance before it is used for notification, alerting and reporting?

A: IWG foresees an initial operation period of batch submission of data to populate the database, which will include both LDS and IR data. Once populated, the FPD will commence full operation as required by producing NAs and reporting.

139

Q: Does LTC expect data to be accepted, stored and transmitted in an encrypted fashion?