SAN FRANCISCO -- Most suppliers to the mortgage industry are hurting because of slack demand related to the decline in origination volume. But some of the exhibitors at the Western Secondary Mortgage Market Conference here last week are bucking the trend and, for various reasons, having a good year.

For some vendors, business is being propped up by an expanding customer base as thrifts and commercial banks move back into home loans. Others offer servicing-related products that are little affected by production volume, And still others offer cost savings or productivity tools intended to improve the bottom line.

One of them is Contour Software, a Hamilton, Calif.-based company that calls itself the largest provider of home-loan software. Contour announced that it had been invited by the Federal Home Loan Mortgage Corp. to provide an interface enabling Contour's customers to access Freddie Mac's new automated underwriting service. Freddie rolled out the service at a news conference last week.

Scott Cooley, president of Contour, said, "We're not losing money, we're not laying off people. And because of the lending slowdown, people are looking more toward inexpensive PC-based systems. They're looking at word processing and seeing they can buy an inexpensive product off the shelf, so why not loan processing, too?"

He said the decline in volume has brought with it a shift in the kind of users it has to support. "They're now more likely to be office managers, not just loan officers," he said. "They're looking for productivity these days."

Six Months Old and Flying

I. Hale Oliver, president of Nationwide Appraisal Services Corp., Pittsburgh, had no hesitation in saying the company was having its best year ever. Interviewed at his booth, he said the company had just started business in January.

Nationwide uses a network of independent appraisers in all 50 states, all of whom have been licensed or certified as required by FIRREA, to provide all types of appraisals. Mr. Oliver says business so far has not only been brisk but has far exceeded all pre-startup projections.

In his first six months of business, Mr. Oliver has lined up a customer list (which he would rather his competitors did not see in print) that reads like a Who's Who in the mortgage business.

The secrets of Nationwide's early success, Mr. Oliver says, are fast turnaround, quality service and, with emphasis, "extremely competitive prices." According to literature distributed at the conference, the turn-around time for most services is five days for eigher verbal or hard-copy reports.

Stress Means Profits

Mortgage Risk Assessment Corp., Hoboken, N.J., is also doing a brisk business, partly because of the stress in the home loan business. The company has developed a data base of residential property values that enables it to credit risk services, portfolio evaluations, marketing, and other services to a broad swath of the mortgage business, including lenders, investors, agencies, and insurers.

Manning the company's booth was Fred B. Horner, senior sales executive, who said risk management was a hot product today.

He said one popular product was a prescreening service that gives insight into property values without the expense of an appraisal. "If someone is asking for a $250,000 loan in an area of $125,000 houses, for example, a lender may simply not be interested in proceeding," he said.

He said the company was also adept at tracking present loan-to-value ratios by finding new second liens and taking into account rising or falling prices. And it also specializes in detecting "silent seconds," in which a seller has lent the buyer the down payment. He said this type of fraud was more prevalent in California than elsewhere.

Steve Drew, senior vice president of Servantis Systems Inc., or SSI, also said business was good. "We do a lot of different banking software, not just mortgages, and a lot of banks are in pretty good shape these days," he said.

"But our mortgage software is doing well, too. Servicing just goes on no matter what happens to originations. On the front end, a lot of companies are trying to put PCs in the loan officers' hands. There's an advantage for mortgage banks because you put your whole office into the computer."

He explained that companies wanting to move into new territories could put a loan officer to work without the need for bricks and mortar.

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