Alltel will help develop software to automate the property-tax side of mortgage servicing.
The Florida company announced deals last week with the two largest operations in the tax fulfillment business, Transamerica Real Estate Tax Service and First American Real Estate Information.
The aim is to reduce costs and ensure that taxes are paid on time.
Alltel, based in Jacksonville, has a computer role in servicing 20 million loans, with balances exceeding $2 trillion.
Dallas-based Transamerica, a unit of Transamerica Corp., is the leader in mortgage tax fulfillment, providing such service for 18 million loans. First American, a unit of Santa Ana, Calif.-based First American Financial Corp., would not provide such data but is widely considered to be the No. 2 company in the business.
Most lenders outsource tax fulfillment, but the job of keeping the provider up to date is still "largely manual ... and subject to a lot of errors," said Bob Hunter, an executive vice president at Alltel.
With the planned software, lenders could update their servicers and their tax fulfillment providers with a single computerized operation.
"Between Transamerica and First American we have the lion's share of the industry in trying to create databases that will automate the process of seeing taxes are being paid on a mortgage," Mr. Hunter said.
John Breitfeller, chief operating officer of Transamerica Real Estate Tax Service, said the software to be developed "will cut lenders' work in half."
"Transamerica and Alltel have huge data bases that we will share so lenders will not have to double-update all their loans," Mr. Breitfeller said. "Whatever Alltel knows we will also know, in real time, with this system.
"This streamlined servicing in lenders' shops means less time, less paper, and less employees."
Mr. Hunter said Alltel would help develop such software for any tax servicer.
"I wouldn't see that there would be any big market change with this software," he said. "Banks were contracting this tax work out to these companies anyway; this just makes it faster.
The project will take two or three years to get to "full power," Mr. Hunter said. "We're delivering the product in components and hope to have the first of it out in 1999."
