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The Future Of Digital Mortgage Technology Innovation

High-powered mortgage executives gathered at the Seventh Annual ENGAGE Event in Denver, Colo., to discuss the future of the mortgage business. The discussions that happened were both lively and informative. Here’s how they see the future of digital mortgage technology innovation:

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“We have to move this industry forward by streamlining the process, and cutting the cost to originate,” said Michael Hammond, Chief Strategy Officer at PROGRESS in Lending Association and the Founder and President of NexLevel Advisors. NexLevel provides solutions in business development, strategic selling, marketing, public relations and social media. “This is far more then just hype. This is something that the industry has to do and it is not just about one technology or one platform, it is about coming together as an industry.”

Neil Fraser, Director of U.S. Operations at Paradatec, believes that this will be an evolutionary process. “You don’t need a revolution to convert the document into data that you can believe. You need technology to read the documents, and convert that to data that can be both read and understood. I see that as an evolutionary step in mortgage technology innovation.”

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Paradatec is a mortgage OCR technology organization that automates the data entry operations of large lenders through intelligent document analysis. Neil was Paradatec’s first U.S. employee and has grown the organization every year since the company incorporated here in 2002.

As the mortgage industry embraces innovation to become more digital, everything starts at the point-of-sale. Realizing this fact, a lot of new POS vendors have emerged claiming to offer the true digital mortgage experience. Curt Tegeler, President of WebMax, warns lenders not to be fooled by vaporware as they march toward more digital processes.

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“There’s a lot of buzz today around the digital POS. Why is that? We’ve found that 90% of homebuyers start the process online,” Tegeler notes. WebMax’s digital lending platforms expedites the borrowing process, helps maintain compliance, delivers dynamic online lending tools, and provides a highly innovative borrower experience. “Make sure that the executives behind your POS have deep mortgage experience. You have to understand the market so you know what you’re fixing.”

One area that everyone agrees needs fixing is the appraisal process. If the industry is going to move to a more data-driven process and a fully automated point-of-sale, slower processes like the appraisal need to be addressed.

“Appraisals were really left on the side,” noted Arturo Garcia, the Senior Vice President of Account Management at Mercury Network. He leads all customer retention efforts and strategies for the company, responsible for continuous improvements and increased returns for customer investments and overall satisfaction. “Appraisals didn’t get a lot of attention. However, it’s antiquated to send an appraiser out to the field time and time again. I envision a day when you have a system that can automatically flag issues with the appraisal, fix them or send them right back to the appraiser for fixing.”

The big takeaway from this discussion was that the digital lending process is coming and must touch all parts of the mortgage process in order to make a difference in how loans are done.

About The Author

 

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Making AVMs Even More Reliable

Mercury Network’s OptiVal Automated Valuation Model (AVM) Cascade has expanded to include HouseCanary’s AVM. The addition of HouseCanary brings yet another AVM to the Cascade to assist lenders in reducing risk and maximizing profit.

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The OptiVal Cascade now contains twelve AVMs, and is the only independent and objective Cascade that evaluates multiple AVMs to select the most accurate for a particular piece of real estate. OptiVal is updated every 90 days with the highest quality data representing the most recent sales – months ahead of county recordings and other data offerings.

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Mercury Network’s technology is used by nearly 1,000 of the nation’s lenders and appraisal management companies (AMCs) to manage real estate valuation operations and collateral risk. “We’re proud to be selected for the OptiVal Cascade,” said Chris Stroud, Chief of Research at HouseCanary. “Lenders need easy access to highly accurate data to mitigate risk and HouseCanary’s AVM has an excellent history of pinpointing property values. Objective testing will make our AVM more accessible to lenders when they need it most.”

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“The OptiVal Cascade is an independent test of multiple AVMs against the freshest test data available on the market today,” said Craig Zielazny, VP of Data and Analytics at Mercury Network. “Our objective is to include all the AVMs that lenders are interested in using, and providing them with the specific performance for a particular AVM in the subject property’s area. We’re pleased to welcome HouseCanary to the OptiVal Cascade.”

Founded in 2014, HouseCanary’s mission is to help people make better real estate decisions. Built on a foundation of great data, powerful models, and predictive analytics, the HouseCanary platform aggregates millions of data elements, including more than four decades of property data and a rapidly expanding arsenal of proprietary calculations and analytics, to accurately define and forecast values and market influences.HouseCanary is financed by notable investors including Hillspire (Alphabet Executive Chairman Eric Schmidt’s family office), PSP Growth/PSP Capital (firm founded by entrepreneur and former Commerce Secretary Penny Pritzker), Alpha Edison, ECA Ventures, Raven Ventures and others top Silicon Valley investors. The company is headquartered in San Francisco.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Lender Uses Technology To Manage How Its Brokers Order Appraisals

JMAC Lending has implemented the Mercury Network platform to manage all appraisal orders placed by their brokers; routing the orders intelligently to their appraisal management company (AMC) partners. This implementation also ensures compliance with established appraisal independence and third-party oversight requirements.

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Specifically, Mercury Network announced the addition of JMAC Lending, a wholesale and correspondent lender based in Irvine, Calif., to their client portfolio. Mercury Network’s suite of software solutions is used by nearly 1,000 of the nation’s lenders and appraisal management companies to manage real estate valuation operations and collateral risk on their web-based platform.

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With Mercury, JMAC has a single view into appraisal ordering regardless of the AMC selected and can train brokers on one system while maintaining single audit trail of the entire appraisal transaction.  Mercury integrates with each of their AMCs so that orders, payment, statuses, and completed appraisals flow seamlessly between Mercury and the AMCs platform without the need to visit multiple sites or re-key information.

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“We are proud to provide all of our customers with a fast and efficient solution to order appraisals from their AMC vendors”, said Jennifer Miller, President of Mercury Network. “JMAC Lending is an industry leader and we are pleased with the opportunity to provide technology solutions that provides efficiency and high-quality service to their business, and their brokers.”

JMAC joins a growing client list at Mercury Network seeking access to the company’s web-based platform that automates vendor management, valuation ordering, tracking, documentation, and review for AMCs and Lenders. With the in-depth data provided through Mercury Network’s tools, clients are better equipped to manage workflow in more efficient means, which contributes to the company’s productivity and success.

“Companies like JMAC Lending recognize the need for the data and processes that our solutions provide in workflow management,” said Miller. “I’m honored that they have chosen to work with us, and I’m confident that our technology will help in their overall productivity and contribute to their long-term success.”

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Lender Embraces A More Efficient Appraisal Process

American Financial Network, Inc. (AFN), one of the country’s fastest growing mortgage companies with more than 30 appraisal management company vendors, has deployed Mercury Network to manage efficient, compliant appraisal operations. Mercury Network’s technology is used by more than 800 of the nation’s lenders and appraisal management companies (AMCs) to manage real estate valuation operations and collateral risk.

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AFN’s collateral valuation operations will be managed using Mercury Network’s web-based platform to place and track appraisal orders with their AMC partners. The implementation allows AFN to order and see status on valuations from within their loan origination system, significantly reducing delays and human errors, while effectively routing orders to AFN’s chosen appraisal management companies.

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“The appraisal process is critical for our loan officers and clients, and we weighed several possible solutions. Mercury Network gives us consolidated control across all our AMC partners and efficiency gains that have already made a great impact for our customers and staff”, said Jonathan Gwin, Esq, COO and General Counsel at AFN. “Now, staff can order and manage all appraisals from a single secure dashboard, rather than navigating to each vendor’s website.”

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“We’re excited to welcome American Financial Network”, said Jennifer Miller, President of Mercury Network. “Their commitment to innovation and client service is well known in the industry, and we look forward to helping AFN continue to scale operations at their rapid pace.”

Established in 2001, American Financial Network, Inc. is a licensed mortgage lender (NMLS #237341) based in Brea, CA. AFN is a FNMA, Freddie Mac, GNMA approved direct lender with over 100 branches in numerous states.

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The State Of Innovation

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Over 100 mortgage executives came together to attend PROGRESS in Lending Association’s Seventh Annual Innovations Awards Event. We named the top innovations of the past twelve months. After that event, we wondered what would happen if we brought together executives from the winning companies to talk about mortgage technology innovation. Where do they see the state of innovation? And what innovation is it going to take to get our industry really going strong? To get these and other questions answered, we got the winning group together. In the end, here’s what they said:

Q: Some say innovation has to be sweeping change. Others say innovation can be incremental change. How would you define innovation?

LEONARD RYAN: I would define innovation as more of a process improvement over current methods. Sometimes major breakthroughs happen after a lot of thought on process improvement. Today when we talk about innovation, it often means computer programs and their contribution to making the mortgage process faster, more secure, less complicated or instant. Thirty years ago an innovation was printing a 1003 on a laser printer. That would hardly qualify today since that is now an everyday process. In terms of your awards, it seems the more significant the process improvements, the more likely to be recognized.

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REBECCA MAYERSON: No change in mortgage banking can be sweeping due to the layers of regulation and compliance by federal, state, GSE, and big banks. So innovation must be incremental due to the risk/reward.

TIM ANDERSON: Incremental. Because the mortgage business is a highly regulated one consisting of a multitude of participants each adding a step and receiving their cut of revenue to get from point A to Z it is a hard business to affect sweeping change. Still too many players, steps touching too many different disparate systems in the process to affect sweeping change or significant impact by itself.  Because of this I don’t see a company developing something like the iPhone coming into the mortgage space with a whole new app or mobile device that is singularly going to revolutionize this business.

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The GSE’s because of their critical role in financing and market share (aggregator) have been the ones to affect real change in this business. If you look at their Uniform Mortgage Data Program, (UMDP) it’s a phased in approach at developing systems to better evaluate critical data elements to reduce risk. They moved the traditional post-closing pre-funding QC process to pre-closing QC and leveraging their new technology and regs like TRID (with three day delivery rule) to support this trend. Also because the mortgage process has very distinct processes with siloed departments dedicated to the mortgage manufacturing process, (POS, origination, processing, underwriting, closing, secondary marketing, servicing) each re-entering the same data that introduces a lot of steps, divisions, (overhead, operational costs and risk) vendor players and participants all have to agree to change their processes and automate to affect real change and ROI in this business.

CURT TEGELER: Innovation can be both sweeping and incremental. Innovation must be persistent and a mindset. It is a necessity to remain relevant in any industry and to enhance the products and services we offer. This involves implementing new strategic ideas, creating dynamic products and improving existing services. In having an innovative approach, you are increasing the probability of success and development in your business.

CRAIG ZIELAZNY: Innovation is creating an impactful solution to a problem. The innovation process can’t be boiled down to just listening to customers, though. Only through continuous and meaningful engagement can you identify real problems and execute effective solutions. It doesn’t become an innovation until the unmet need has been overcome by an appropriate and well-executed solution. Rarely is innovation the product of an individual person experiencing an “aha” moment. Ideas are easy, execution is hard and it is what makes any idea tangible.

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RICK TRIOLA: I think we all want sweeping change that solves problems quickly and delivers on the promises technologists have made and that consumers all want, but unfortunately we don’t see that, at least not in our industry. Most innovation fails because it never gets to the end user because the innovation can’t get passed through all the gatekeepers and entrenched stakeholders.

For example, the mortgage industry had the opportunity to adopt eSignatures as soon as the Federal ESign Act was signed into law in June 2000. Instead of leapfrogging over the antiquated paper processes and skipping a generation by heading directly to digital lending, too many players decided to invest instead in scanning and faxing devices and processes. Borrowers, buyers, sellers — everyone — would have loved the opportunity to just eSign instead of papering out and couriering documents all over the place, but instead our industry took more than a decade to move in the right direction.

We wish innovation would sweep down on our industry quickly, but the extensive eco-system here combined with and entrenched and outdated status quo results in new innovators being forced to ‘stand down’ while the industry accepts incremental change.

JOHN VONG: In other industries, change and innovation can happen simultaneously and dramatically. However, because the mortgage origination process is very complex, innovation in our industry tends to be more incremental and less sweeping. Take, for example, e-mortgages. As an industry, we’ve been talking about doing e-mortgages since 2000. It’s seventeen years later and less than one percent of originations are e-mortgages. One of the key reasons for this was that there were differing and competing priorities from parties within the mortgage origination and closing ecosystem including lenders, investors, warehouse banks, county recorders, notaries, and GSEs, among others, and not everyone was on the same page about digitization. Customized closing processes throughout the country is another impediment to innovation. Finally, the average borrower gets a new mortgage or a refinance infrequently compared to other common financial transactions, so they are willing (or at least have been in the past) to put up with inefficiency and inconvenience.

Q: How would you define the state of innovation in the mortgage industry? Is it thriving or in a state of decay?

CURT TEGELER: Innovation in the mortgage industry is stronger than ever. The industry is so far behind in technology innovation that it can only advance from here. There are countless opportunities to embrace innovation and the industry is becoming more and more digital. Every phase of the mortgage process is evolving, from the consumer experience to the lender experience.

CRAIG ZIELAZNY: As is the case in all industries, there are firms which innovate and those that don’t but rather choose to follow. The firms which continually innovate maintain close ties with their clients and the market, always searching for a better way to do something or to solve a seemingly unsolvable problem. The state of a firm’s innovation status is largely a function of the culture and the value placed on listening to clients and doing the math to unearth needs which are not clearly identified by the client.

RICK TRIOLA: Despite the fact that I feel our industry moves too slowly in general, we’re actually at a very exciting place right now. While we had the technology to do end-to-end digital lending a decade ago, lenders weren’t ready and consumers weren’t pushing for it. Today, consumers are ready at the same time investors and regulators are pushing for it. Even loan officers we’re talking to are excited about doing digital.

And they want to share all of the benefits of digital with borrowers, that means closing the loan from anywhere. We know this is possible because we have now completed tens of thousands of online notarizations and cracked the code around the ‘last mile’ friction of having to appear in person.

I believe that over the next few years, we’ll see a great influx of lenders moving into fully digital lending and realizing cost and time savings at the same time they offer better experiences to consumers. In 5 years, no one will deliver a mortgage on paper.

TIM ANDERSON: I think now that we have gotten past TRID this has freed up resources and initiatives to implement some change and innovation. I give Quicken Loans a lot of credit as well because everyone now wants their version of Rocket Mortgage and push to better qualify and verify the loan quicker and faster with initiatives like FannieMae’s Day One Certainty initiative and FreddieMac’ s Loan Quality Advisor tools to streamline the process. We are also seeing a major rise in finally implementing the Digital Mortgage and eClosings to complete the eProcess and deliver not only a better consumer experience but a replicatable, repeatable automated QC process that provides electronic evidence of compliance along the way.

REBECCA MAYERSON: Innovation is at the highest level in over a decade and surging. The need to lower expenses while improving the process for the customer while still protecting risk is driving innovation at a high speed.

LEONARD RYAN: Innovation in the mortgage industry is “making a comeback.” The mortgage crisis and subsequent regulations forced vendors with traditional products to spend resources on implementing those regulations. Only new companies or entrepreneurial minds during those times seemed able to develop substantial changes in process. However, I now see the start of vendors looking to make substantial changes to the process. I believe most of those changes will result in vastly reduced lender costs.

JOHN VONG: From the perspective of a technology provider, it’s thriving. Every loan origination system and service provider is enhancing its technology or developing new solutions.

From the lender perspective, however, cyclicality trumps innovation. When the rates are low and demand is high, lenders are often too busy to focus on technology and innovation. Instead they throw bodies at the problem. When volume declines, there is often a reluctance to invest. Instead, loan production is the top priority. That’s why it takes the mortgage industry a longer time to adopt or upgrade technology than other financial services sectors.

Of course, over the last few years, the risk management and compliance areas are an exception because lenders have more of an incentive to protect their companies from regulatory scrutiny after the meltdown.

Q: Lastly, if there was one innovation that you would say the mortgage industry desperately needs to happen over the next twelve months, what would it be?

REBECCA MAYERSON: Any of the Day One certainty steps that would allow All investors beyond Fannie to accept would be great for our industry.

TIM ANDERSON: A closing collaboration system that exchanges the data between the title system of record and lenders not only for TRID or final CD but the upcoming Uniform Closing Dataset (UCD) requirement coming September 25th. Most lenders look at these as separate compliance initiatives but the proper collaboration should start at time of application with the initial Loan Estimate, automatically check for compliance tolerances anytime the data or disclosures change, conduct a final reconciliation and comparison three days prior to Closing Disclosure and keep tracking 90 days after closing of any changes. This should not only include the CD but all the closing documents and then once approved be able to do a full eClosing to ensure data and document quality, integrity and compliance.

CURT TEGELER: Digital mortgages are significant for the mortgage industry. With millennials becoming a large percentage of homebuyers, being able to complete the mortgage process online is important. Bringing the lifecycle of the process from a lead to a buyer is crucial. Essentially, Realtors should have the ability to advertise and turn leads into homebuyers and borrowers digitally. Even a hybrid approach where the front-end process becomes digitized is a step in the right direction. With procedures and an evolving industry ahead of us, the ability to be move quickly is critical to long-term success, and this is done through being digital.

CRAIG ZIELAZNY: Ball games are rarely won because of home runs… It’s the team that strings together singles and doubles that will win. Our industry is no different. Each innovation will contribute to the overall improvement of the industry and the benefits delivered to the various members. If we listen to our customers and probe for a deeper understanding, we will all become innovators and help move the industry forward.

JOHN VONG: The existing traditional origination process is not geared to cater to Millennials, who have different expectations and are more tech savvy than previous generations. They don’t want to spend ninety days to get a mortgage with a traditional loan officer. Millennials want to go to online, fill out their basic information, and get instant decisioning, as well as shop for competitive rates. Traditional lenders need to significantly rethink the customer experience they offer if they want to be relevant to this growing customer segment. Moreover, both traditional and FinTech lenders are going to have to find ways to qualify non-perfect borrowers and do so in a more digital fashion.

RICK TRIOLA: From the lender’s perspective, we desperately need technologies that will reduce their costs and increase their profits in an environment with tightening margins. At the same time, they need tools that will help them compete more effectively as rates rise, refinances disappear and competition heats up.

There has never been a better time to adopt technology that will answer these needs. In my mind, it’s going to be all about online closings, anytime from anywhere, which exactly what eClose360 offers. In fact, we just ran the numbers for a new client and found that using the eClose360 platform would add $18 million in bottom line profits over the next 12 months. That’s the kind of innovation lenders need now.

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Collateral Valuation: 10 Ways To Prepare For The Busy Season

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Appraisal turn times are longer and fees are higher in many areas of the country, and we’ve just barely begun the Spring buying season. Many lenders are scrambling to make sure they’re ready for an uptick in originations, and process and efficiency of operations can make a major difference to your bottom line.

In the mortgage industry, we almost always see an increase in activity in the Spring, and many analysts are predicting more activity than is usually forecasted for the Spring of 2017. When volume really heats up, it’s critical that your collateral valuation process can support your increase in production. If not, you will waste tremendous time in operations, you could delay closings, face disappointed borrowers, and even lose deals.

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You CAN be prepared and meet these challenges head on to really add significant value to your institution. There are powerful collateral valuation tools available that will help you stay ahead of your competition and power your operations to run more smoothly than they ever have before. You can be prepared for the busy season, and even be in a strategic position to support your growth moving forward. Here are 10 ways to streamline your collateral valuation and operations.

1.) Trade spreadsheets for software. If you’re still managing your collateral valuation operations with spreadsheets, consider using an appraisal management system. Change is always hard, but talk to some of your industry colleagues to get feedback on the right system for your institution. Don’t be intimidated by costs. Appraisal management systems typically charge on a per-order basis, so you only pay for what you’re actually using. Plus, many of these systems allow you to pass the software fee to your vendor, so you see all the efficiency benefits and aren’t actually paying for it. You may think spreadsheets are enough if your volume is fairly low, but you can get several more efficiency benefits out of your appraisal management system so take a look at this option before the Spring real estate market really heats up.

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In the mortgage industry, we almost always see an increase in activity in the Spring, and many analysts are predicting more activity than is usually forecasted for the Spring of 2017.

If you’re still managing your collateral valuation operations with spreadsheets, consider using an appraisal management system.

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2.) Get easy access to more than enough vendors so you’re covered. Whether you use appraisal management companies (AMCs) or appraisers directly, now is the time to make sure you have more than enough vendors to support you when things get busier. If you’re scaling up operations in specific regions of the country, plan ahead to make sure your valuation vendors are in place and can handle your assignments. If you’ve had trouble finding the right appraiser or AMCs in certain areas in the past, it’s time to beef up your pool of eligible vendors now so you’re not left without a vendor as your volume heats up.
Make sure you have the flexibility to easily add or swap vendors. In your appraisal management system, you should be able to place orders with either AMCs or appraisers, and you need the ability to quickly add new vendors to your system without hassles or delays.

3.) Monitor your vendors’ capacity so orders can be distributed and your turn times are faster. Your appraisal management system should provide a view into your vendor’s current workload so you’re not assigning orders to someone who is already overloaded. Sending the order to a vendor who is already at full capacity, or even late with some of your appraisal orders, will only delay your report. If they accept the order, you may be waiting longer than you prefer. If they don’t accept the order, you will have wasted that time up front, and have to start again by re-assigning to the next vendor in line and wait for them to accept or decline the order. This inefficient process can add days to your turn times at the beginning of the process, but there are many ways to mitigate these administrative delays.
Instead, you can use technology to automatically select multiple appraisers and contact them before assigning the order. This can get your appraisal started much faster since you will avoid assigning orders to vendors who can’t meet your turn time, only to blindly assign to the next in line, who may also be too busy. In this process of going from individual vendor to the next in line, you can waste days just trying to assign the order.

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4.) Use vendor ratings. Inside your appraisal management system, use the ratings system to grade each vendor after each assignment is delivered. It will only take a few seconds on each order if you’re using a simple star rating system, but it will give you a broad view of performance across multiple orders. You can use those ratings to more efficiently assign future orders, plus you could avoid a problem vendor with poor ratings and save valuable time by choosing a highly rated vendor instead.

5.) Check vendor performance data. Detailed statistics on vendor performance should be automatically tracked inside your appraisal management system. It’s important to take a few minutes to review these performance stats periodically and adjust your order routing accordingly. You can track acceptance rates, rework rates and several other metrics, plus revision turn times. Make sure your appraisal management system gives you easy access to these vendor performance statistics. Also, look for a platform that will deliver custom reports on the performance stats that mean the most to your operation.

6.) Make sure vendors are using technology to accelerate their turn times. Your appraisal management system provides powerful mobile tools to appraisers (for free) that can help appraisers manage orders and respond to you much faster. Mobile apps have proven to reduce order response time by ?, and they can cut a full business day off report delivery turn times. Since the mobile applications are free, make sure to encourage the appraisers in your fee panel to use the technology at their disposal to provide faster service.

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In less than 10 days, you can be in a much stronger and more strategic position to help your institution leverage the busy Spring mortgage markets.

If you want to take advantage of the busy season, it’s critical you have a collateral valuation plan in place to support your production team and your borrowers.

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7.) Integrate your appraisal management system with your LOS. This will save valuable time with several benefits. First, you will eliminate data entry mistakes that cause delays. Since order information flows directly from the LOS into the appraisal data, you won’t have to manually enter orders. Second, an integration with your LOS will give your staff a live status on their appraisal order. Instead of wasting your time with phone calls and emails asking for status, they can see exactly what’s going on with the appraisal right inside the LOS. Third, your staff will save valuable time since they’re not forced to log in to a variety of systems just to order an appraisal. If everything is handled from inside their familiar LOS, the valuation process can be simplified and accelerated significantly.

8.) Use a single dashboard to view all your collateral valuation operations. With a consolidated dashboard, you can view all your collateral valuation orders across all channels. These technology dashboards are easy to customize to suit your workflow and preferences, so processing and managing your operations is easier and must faster.

9.) Consolidate all valuation orders to one platform to save more time. If you’re ordering residential appraisal reports, QC reports, AVMs, commercial appraisals or AMC services from multiple websites, consider consolidating these orders to one technology platform. You can still use your preferred vendors, and you will save valuable time by avoiding multiple websites or processes. Your appraisal management system can serve as a single login for all your collateral valuation operations, and you gain a wide view of everything in your pipeline, rather than have it scattered on various vendor websites.

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10.) Automate vendor selection based on what’s most important to you. You can use your appraisal management system’s tools to customize criteria so the best vendors are suggested for each order. If you prefer a vendor be within a certain radius of the subject property, use technology to filter and show you only those eligible vendors. The automation options are endless, and you can easily filter vendors by their ratings, their turn times, on time percentage, quality ratings, professionalism ratings, order acceptance percentages and more.

If you want to take advantage of the busy season, it’s critical you have a collateral valuation plan in place to support your production team and your borrowers. To be prepared, it doesn’t take nearly as long as you might think. In less than 10 days, you can be in a much stronger and more strategic position to help your institution leverage the busy Spring mortgage markets.

About The Author

Patrick Scott
Patrick Scott is a Senior Sales Consultant for Mercury Network, a vendor management platform used by more than 700 lenders and AMCs. His appraisal management and compliance expertise spans smaller community banks and credit unions to the largest lenders and AMCs in the country. He consults with Mercury Network clients on appraisal workflow, compliance, and efficiency issues and he can be reached at Patrick.Scott@MercuryVMP.com.

Slashing Risk With Collateral Data

Housing outlooks are optimistic and we’re all entering the busy season. Every lender is focused on borrower experience while getting deals done, and the collateral valuation process is a critical part of your overall success. Make a mistake there, and someone will end up paying the price.

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With the appraisal process — and evaluating collateral in general — there is no such such thing as a zero cost mistake. Whether an error results in the need for re-disclosure, a returned appraisal or a compliance violation, each time a lender, AMC or appraiser takes action on incorrect property information, everyone risks lost time, lost money, or both.

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The problem is, mistakes are understandably prevalent when it comes to evaluating residential property. While some properties may seem similar, each has a distinct footprint. Each property you’re evaluating is surrounded by different neighborhoods and may have modifications or unique characteristics like lot size and views. These details can make a dramatic difference in the value of a property, and if they’re not recognized in the collateral valuation process it can mean losing a deal or making risky lending decisions.

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Fortunately, in the age of big data, the vast majority of properties have a unique data set consisting of thousands of pieces of data. If you want to make the right decisions, you need to be certain your information is correct. If you don’t have access to reliable, relevant data, it’s virtually impossible to understand a property well enough to avoid decisions that lose money.

You can get the data to verify your collateral valuation decisions very easily. Several providers offer software, property reports, and automated valuation models (AVMs). The technology is advanced enough today that you can integrate these systems and pick and choose the valuation verification methods you prefer.

Before you choose the collateral valuation and verification methods best for your lending institution and risk profile, make sure you ask the vendor these questions:

>>What makes this data or verification solution better than alternatives?

>>Can this solution be integrated with your overall process software so the entire collateral valuation workflow is easy to manage?

>>How is the data or solution verified? For example, if you’re using AVMs to verify appraisal report data, do you have a way to choose the best AVM for each individual property?

When you have a data verification solution in place, remember that collateral valuation is just one way to leverage your insights. Many lenders use the same solutions across the entire mortgage chain. With collateral data, you can determine borrower equity and LTVs in seconds. Before you disclose appraisal fees to the borrower, you will have a better idea of the complexity of the assignment. In post-closing, you can use the data to discover a property or neighborhood’s footprint for better due diligence during audits. Finally, in the loan servicing stage, the same data can be used to ascertain your portfolio’s value direction and determine ideal outcomes for properties in your portfolio.

The data you need to make the right lending decisions is out there, and it’s easy to integrate with your overall process. The cost is pennies on the dollar compared to the risks of proceeding blindly, so it’s time to take a step into big data to verify your collateral valuations.

About The Author

Eric Thompson
Eric Thompson is a Senior Consultant at Mercury Network, an online vendor management platform used by more than 700 lenders and AMCs. Eric has been in the industry for over fifteen years with a wide range of experience from appraiser training to owning and operating a successful appraisal management company. His appraisal management and compliance expertise spans smaller community banks and credit unions to the largest lenders and AMCs in the country. He consults with Mercury Network clients on appraisal workflow, compliance, and efficiency issues and he can be reached at Eric.Thompson@MercuryVMP.com.

Mercury Network Announces Another Big Acquisition

After recently acquiring Platinum Data Solutions, Mercury Network continues to complete strategic acquisitions. Now, Mercury Network, the valuation technology company used by more than 800 lenders and Appraisal Management Companies (AMCs), announced it has acquired Appraisal Scope, Inc., a fast-growing provider of valuation management software. Here’s what this acquisition means for the mortgage industry:

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“The nation’s housing economy depends on efficient, accurate valuation operations,” said Will Clemens, CEO of Mercury Network. “The acquisition of Appraisal Scope, combined with our expanded investments in R&D, allows us to offer lenders and AMCs of all sizes the most innovative collateral valuation tools from a single provider.”

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Jennifer Miller, President of Mercury Network, added, “With this acquisition the combined companies now have more than 45 staff members dedicated to product development and IT. Both platforms, Mercury Network and Appraisal Scope, will continue to be offered, and we plan to continue our investment into both.”

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“We feel great alignment with Mercury’s culture and mission,” said Jordan Rothstein, Founder of Appraisal Scope. “The combination of the two companies will allow Appraisal Scope customers to benefit from Mercury’s greater scale and infrastructure. We will thrive and continue to grow and innovate as part of Mercury.”

No sale price was disclosed. Appraisal Scope, Inc. is a leading provider of valuation management software for appraisers, BPO providers, AMCs and mortgage lenders. The company’s technology is integrated with more than 40 industry vendors and offers a single destination for AMCs and lenders, no matter how complex their valuation management needs. Appraisal Scope, Inc. is based in Baltimore, and was founded in 2011.

Mercury Network now serves almost 1,000 lenders and AMCs with six core valuation technology solutions, including the two leading appraisal management platforms, as well as Add-on modules for commercial appraisal, appraisal quality control, alternative valuations, and additional closing services such as flood certificates and income verification.

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And The 2017 Winners Are …

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Prominent mortgage executives gathered to see who the Executive Team of PROGRESS in Lending named the top industry innovations of the past year at the Seventh Annual Innovations Awards Event. This honor is the Good Housekeeping Seal of Approval, the Gold Seal when it comes to recognizing true industry innovation. All applications were scored on a weighted scale. We looked for the innovation’s overall industry significance, the originality of the innovation, the positive change the innovation made possible, the intangible efficiencies gained as a result of the innovation, and the hard cost and time savings that the innovation enables industry participants to achieve. In alphabetical order, the top innovations are:

ComplianceEase

ComplianceEase-2017-WinnerPROGRESS in Lending Association has named ComplianceEase a top innovation. In preparation for the TILA-RESPA Integrated Disclosure (TRID) rule, ComplianceEase spent 18 months enhancing its flagship compliance management platform, ComplianceAnalyzer. The company released the new module, called TRID Monitor, which provides the comprehensive, real-time auditing of disclosure timing, changed circumstances, and fee tolerances across all disclosures. ComplianceAnalyzer with TRID Monitor allows lenders to insert flexible TRID compliance controls into any system and can be used at any point in the lending process and across multiple origination channels. The module can also be used for pre- and post-close quality control and securitization due diligence. Depending on a lender’s workflow needs, lenders can use ComplianceAnalyzer with TRID Monitor to review the latest terms and fees on any single TRID disclosure or to monitor changes in fees and terms throughout the origination and closing processes.

DocMagic

DocMagic-2017-WinnerPROGRESS in Lending Association has named the work done by DocMagic a top innovation. As the mortgage industry slowly embraces the Digital Mortgage, DocMagic launched what was dubbed its “Total eClosing solution,” which enables a comprehensive, true 100% paperless eClosing that automates the entire process — from start to finish. Looking back, DocMagic was brought to the forefront of eClosing technology awareness with its participation in the CFPB’s eClosing pilot in 2014. This vendor was 1 of only 12 firms that was invited by the CFPB to participate. If the industry is going to go digital it will need vendors like DocMagic to lead the way. The Total eClose solution includes the seamless incorporation of its eSignature-enabled SMART Documents, a nationwide eNotary network, MERS eRegistry access, eWarehousing, eNotes, a secure eVault, and secure investor eDelivery — all in a single, comprehensive eClosing platform and completely TRID-compliant. There is absolutely no paper involved at any point, at any time.

Mercury Network

Mercury Network-2017 WinnerPROGRESS in Lending Association has named Mercury Network a top innovation. In March of 2016, Mercury Network launched Fee Analytics, a rich set of current data and analytics for actual appraisal fees in every county in the United States, delivered monthly. Lenders subscribe to Fee Analytics to know the most current appraisal fees paid for collateral valuations, along with details on the transactions. Since more than 800 lenders and appraisal management companies rely on Mercury Network for collateral valuation management, more than 10,000 transactions a day are passing through the system, providing rich trended data with many benefits for the industry. With Mercury Network’s Fee Analytics tool, lenders can determine where appraisal fees are rising and where they are falling, a clear indicator of supply and demand, as well as a valuable clue for hyper-local and regional lending booms that present opportunity for business expansion.

Mortgage Network

Mortgage Network-2017 WinnerPROGRESS in Lending Association has named Mortgage Network a top innovation. Mortgage Network has been creating and using its own technology for several years. But in 2016, it took things to a new level by creating an online borrower portal that allows consumers to initiate and drive the mortgage process with very little assistance from the loan officer. The portal gives borrowers the option to upload their own mortgage documents through a drag-and-drop method, virtually eliminating the need for loan officers to keep coming back to borrowers to request more information. Borrowers can also see their loan choices based on the information they provide, receive disclosures electronically, and receive an underwritten loan commitment in as little as two days. In many ways, the new borrower portal might be compared to TurboTax, the off-the-shelf software that revolutionized how Americans prepare their taxes. This portal will do the same for mortgage lending.

NotaryCam

NotaryCam-2017 WinnerPROGRESS in Lending Association has named NotaryCam’s eClose360 a top innovation. As the industry interest in eClosings has risen, with NotaryCam’s eClose360 you no longer have to force participants into the same room, deploy a laptop and signing pad — which is essentially 12-year old technology — to close a loan when it can be done online anytime from anywhere. NotaryCam’s eClose360 is an online notary platform that allows mortgage closings to take place entirely online, removing all associated stress and the friction of having to attend closings physically. Further, Fannie Mae approved NotaryCam’s eClose360 as a provider of both a SMARTDoc and eVault solution. Specifically, this online closing solution is now on the list of software that Fannie Mae has certified and approved for use on loans it purchases from mortgage loan originators. NotaryCam’s eClose360 has legally completed tens of thousands of notarizations in all 50 states and over 65 countries.

QuestSoft

QuestSoft-2017 WinnerPROGRESS in Lending Association has named QuestSoft a top innovation. This industry has been inundated with new rules and regulations for some time now. The key to maintaining compliance is preparation. One of the next big rules for lenders to comply with are the CFPB HMDA changes. Last October, QuestSoft sent specifications to 29 loan origination software companies, and those imports are expected to come online during the first quarter of 2017. Customers can then import live data from those LOS platforms to see gaps, interact with their systems, and internally adjust their procedures. The test version is also being provided well in advance of the CFPB’s schedule. Further, QuestSoft’s Compliance RELIEF application has been designed so that as error codes and other specifications are made available by the CFPB, this company will be able to incorporate them quickly and distribute updates to lenders seamlessly.

WebMax

WebMax-2017 WinnerPROGRESS in Lending Association has named WebMax a top innovation. Last year, 5.8 million homes were purchased compared to 5.6 million in 2015 and 5.3 million in 2014. Further, seventy-seven million millennials make up about one-fourth of the U.S. population. Millennials in the U.S. wield about $1.3 trillion in annual buying power, 85% of them are using smartphones as their daily technology device, and 49% are seeking to buy their first home. Millennials are becoming a significant force in the mortgage industry. To reach these new borrowers WebMax’s MortgageWare application provided an innovative digital solution designed to make Mortgage and Real Estate easy, one that enhanced the online lending experience for both the lender and the borrower. In 2016, the solution assisted with the closing of 123,388 mortgage loans and hosted over 2,990 mortgage websites. WebMax clients are provided with a compliant, ascetically appealing, and user-friendly web solution that include key program integrations.

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Mercury Network Names New SVP Of Sales

Mike Brown has joined Mercury Network as Senior Vice President of Sales. Mike has been assisting lenders and AMCs with vendor management and technology for more than ten years, having served as a partner and client of Mercury Network with industry leaders StreetLinks and RealEC. Mercury recently acquired collateral analytics provider Platinum Data Solutions, and Brown will head the newly combined sales teams, and help set strategic direction for the company’s continued growth.

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“I’m excited to join the Mercury team”, said Brown. “Mercury Network’s agile culture and history of rapid development positions the company to lead the innovation of the collateral management process, at a time when the industry needs it most. It’s the right team and the right time to improve the valuation process and provide more transparency for everyone involved in managing collateral risk.”

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“We’re excited to welcome Mike Brown and look forward to him leading our sales team”, said Will Clemens, CEO of Mercury Network. “We’re developing and releasing new software and services that help our clients’ profitability and efficiency, and Mike brings invaluable insight as a software provider and as an industry principal. We look forward to kicking off 2017 with even greater opportunities for expansion with Mike on board.”

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Mercury Network serves more than 800 of the nation’s leading lenders and appraisal management companies to manage real estate valuation operations and mitigate collateral risk. The company recently acquired Platinum Data Solutions, a leading collateral analytics provider, and offers a full product suite for effectively managing collateral risk operations.

Progress In Lending
The Place For Thought Leaders And Visionaries