Oxford's FNC, Inc.

By Raymond Reeves

Much of the innovation in today’s new era economy centers around the streamlining of economic transactions. The aim is to use new technologies to reduce “friction”, be it cost or time, and deliver products and services quicker and cheaper. FNC, Inc., of Oxford, is just such a story.

Anyone who has ever purchased real estate knows about the mountain of paperwork required to close a mortgage loan. It can take hours to complete, and then it has to be processed by an employee at the bank. FNC’s mission is a comprehensive approach: digitize that pile of appraisal paper, automate the process to cut costs for banks, build a successful enterprise and create high-paying jobs for Mississippians.

University of Mississippi professors Bill Rayburn and Dennis Tosh were conducting seminars about how banks could apply for help after the savings and loan crisis when one of their participants asked about building a system to streamline the mortgage loan process.

With help from The University of Mississippi and a team of talented software writers, they started FNC (www.fncinc.com) and invented a mechanism for banks to collect real estate appraisal data in a format that can be quickly analyzed by a computer.
FNC’s Collateral Management System (CMS) allows lenders to order, track and receive completed information from appraisers, title certification providers and mortgage insurance providers.

“Before we came into being, the bank would fax (the appraisal) request to the appraiser, the appraiser would go out and inspect your house and fax it back and so the bank sends a piece of paper to the appraiser and gets one back. That went into a file somewhere and then they ran it into an imaging system with a lot of other documents, but that was still a picture in essence of the appraisal, and there was no data to be extracted,” said Rayburn.

Before the CMS, a review appraiser at the bank would have to go over each appraisal to make sure all of the required information was present and that the property met the bank’s credit risk rules. FNC’s system eliminates this time-consuming process.
“The computer analyzes it to make sure that everything is there and it meets all the bank’s standards and if it does, then it is done and no human hands have to touch it,” said Rayburn.

The CMS allows mortgage lenders to assess collateral in a way that helps them make loan decisions quickly and at a reduced cost. The CMS is customized to each bank’s requirements and is web-based for 24-hour access. FNC also places its application engineers on site at each customer’s location to provide on-the-spot technical support.
FNC also maintains a national database of real estate property information which lenders can access to determine a property’s history. Lenders simply pay a fee to access the database and learn more about a property before making a loan decision.

Rayburn believes FNC was able to succeed in challenging economic times by offering banks a way to cut costs, pursuing large financial institutions as customers and by having supportive investors.

Just as they were ready to launch their product, the bank they were counting on to be their first customer was acquired by another bank. Fortunately, local investors came to the rescue in mid- to late 1998.

“Some Mississippi folks came forward and took us by the hand and invested some money in the company. We went out and got our very first customer. Our very first bank customer, big customer, was Charter One Financial in Cleveland, Ohio,” said Rayburn.
In return, FNC has shown confidence in Mississippi – growing and expanding their business at home when some would suggest they move to one of the more traditional tech centers.

“One of the top questions people ask us is ‘why are you in Mississippi?’” said Rayburn.
FNC has found that competition for talent and security are two good reasons to be located in Oxford.

“If a bright young person goes to school somewhere in the mid-south, and they want to work in the software industry, one of the most exciting industries in the world, there are not a lot of choices to stay home. You have some in Huntsville, some big defense firms, but it gets to be, as we say in Mississippi, ‘slim pickins’ after that.”

FNC recruits those graduates, and others who have worked in Silicon Valley, The Research Triangle Center in North Carolina, and Austin, Texas, but who want to return home to be closer to family.

Rayburn says his customers are also concerned with the security of their stored data. Prior to the 9/11 terrorist attacks, most customers preferred that their data be stored at FNC’s data center in California. Now, Rayburn says, customers are more comfortable with the idea of a data center located in Mississippi. FNC is planning a disaster recovery center to back up their primary data center. It will be located in Oxford. Rayburn praised the work of the Mississippi Technology Alliance in championing technology-based economic development in the state.

“I think it is an excellent thing what the Mississippi Technology Alliance is doing. I think fostering innovation in Mississippi is first rate. This is how we grow as a state, as a community.”

It has been a long road from the S&L bailout through the Dot.com and Telecom bust. FNC began in the ashes of the first, survived the second and picked up a lot of lessons, wisdom and gray hair along the way. They have reduced their customers’ costs, saved them time and in the process developed a business model with a recurring revenue stream and valuable data assets. They also provide a great example of what can happen when the research and intellect on our college and university campuses is successfully commercialized.


For more information on FNC Inc. visit www.FNCINC.com.
You may contact Ashby at ashby@vectormm.com