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A New Era In Valuations

This may come as a shock to some of you, but according to the Appraisal Institute, the number of active real estate appraisers has been dropping at an annual rate of 3 percent per year for the past five years. Reportedly, this is due to retirements and fewer people choosing appraising as a career.

At the same time, alternative valuations have become a hot topic in the appraisal community with fast-growing demand among lenders and investors alike. Sometimes referred to as AVPs, alternative valuation products blend new technologies with human expertise to deliver faster, more affordable property valuations than traditional appraisers. They have become increasingly popular choices for lenders, servicers and investors. Just last year Fannie Mae and Freddie Mac decided to expand their accepted uses for alternative valuation products to include certain purchase loans.

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While many have welcomed these changes, not everyone has. The rising popularity of these products has led to fear among those who believe technology is replacing the traditional appraiser’s role. So, are alternative valuation products a rejection of the appraisal norms? Do they belong outside the current system of appraisals? Could they actually cause harm to an industry that has come so far from the depths of the 2008 economic crisis?

Personally, I don’t think so. In fact, most alternative valuation products perform as well as traditional appraisals and actually meet the definition of an appraisal. More importantly, alternative valuation products are a great potential source of new business for appraisers—and they couldn’t come at a better time.

A New Type of Appraisal

One of the biggest misconceptions with alternative valuation products is that they do not include the expertise of a licensed appraiser, which creates an element of risk in the secondary market. The truth is that many alternative valuation solutions were built specifically to provide a more affordable option to full appraisals while keeping licensed appraisers in control of the valuation decision. And because alternative valuation products have many different uses, they actually increase opportunities for appraisers.

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Alternative valuation products are being used on everything from conforming loans to non-QM loans, correspondent lending, warehouse lending and home equity lending. With the technology available today, however, any of these products can be completed with either the help of a local appraiser or one who lives hundreds of miles away.

For example, when a valuation order is placed, the inspection can be performed by someone other than the appraiser, who is able to gather all the property and market data to form a valuation. The licensed appraiser’s role is to then review all the data, including the list of comparable sales that were used and any notes about the property’s condition, and determine whether the value is valid. In most cases, these types of alternative valuation products actually count as appraisals, as long as they are completed by a licensed appraiser and disclosed to the borrower.

Traditionally, alternative valuation products have been used in the home equity space, since home equity loan valuations need to be supported by a licensed appraiser and delivered much more quickly and at less cost than a full appraisal. But the use of alternative valuation products is quickly spreading to other types of loan origination as well as on warehouse loans and non-QM loans.

Servicing has also adopted an appetite for these valuations. While the servicing requirements of some investors still require a traditional appraisal, more and more investors are accepting alternative valuation products, as long as a licensed appraiser is involved. For example, a growing number of investors are using alternative valuation products for conforming loans in which a high credit quality and low LTV ratios are required. Alternative valuation products are also useful for pre-close valuations in cases where a correspondent lender requires the original appraisal be performed by a licensed appraiser. In these cases, alternative valuations can help lenders that want to save they extra time and cost it would take to get a traditional appraisal.

Limitations and Safeguards of Alternative Valuation Products

Even though alternative valuation products typically perform as well as traditional appraisals, safeguards must be in place before an appraiser can effectively evaluate a property valuation long-distance. For example, USPAP states that in cases where an appraiser is preparing a report on a property located in an unfamiliar market, the appraiser must spend enough time to understand the nuances of that market, including local supply and demand and any other relevant factors about the type of property and its location.

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The process of becoming familiar with the market can be accomplished in several ways. One is through a careful analysis of the property and market data and any supplemental information that may have an impact on a property’s value. Another is to use an appraiser who is licensed in multiple states and has previous knowledge of the market because they spent time living there.

Of course, there are plenty of instances in which an alternative valuation product is not the best option. Generally speaking, alternative valuation products are best used when the valuation provider has an abundance of data about the subject property and the local market. For example, neighborhoods with properties that have similar attributes and where there is plenty of recent sales data are relatively easy to evaluate. By contrast, alternative valuation products shouldn’t be used when there is limited or little available information available. Without good data, it’s difficult if not impossible for an appraiser who is not familiar with an area to make an accurate conclusion of value.

Alternative valuation products are also not allowed by all investors or asset classes, which is why it’s imperative to understand investor requirements and whether there are any limitations on the type of valuation that an investor will accept. Knowing the current condition of a property is critical, as well. For this reason, an alternative valuation product that does not include a current inspection of the property should not be used for non-performing lending, because they will not uncover any recent changes to the property. However, many alternative valuation products do in fact have options to include both an exterior and interior inspection.

New Opportunities for Appraisers

The biggest challenge facing the appraisal industry is not the increase of technology and automation in the appraisal process, but whether or not we’ll have enough appraisers to serve the housing market. The 3 percent annual decline in active appraisers that I mentioned earlier has caused concern throughout the housing and banking industries.

Critics of alternative valuation products claim the increase in use of alternative valuation products will only speed up the decline in appraiser numbers. Some believe technology will replace appraisers altogether. Because most alternative valuation products rely on the expertise of a licensed appraiser, however, the more frequently alternative valuation products are used, the more business opportunities there will be for appraisers. Another benefit is that most alternative valuation products do not require a licensed appraiser to personally inspect a property, which takes up a good chunk of an appraiser’s business expenses.

Alternative valuation products are also creating new career opportunities for appraisers by giving them more ways to leverage their skills. By playing a role in the alternative valuation products process, an appraiser is no longer just a valuation expert for local home purchases, but also an expert for asset management, investment properties, compliance issues, valuation due diligence and a host of other assignments that can be completed with alternative valuation products.

Besides providing high-quality, supportable values and saving time and money, alternative valuation products can also make appraisers better at what they do. Many valuation providers that offer alternative valuation products (though not all of them) are investing in new valuation tools and data analytics for their appraiser teams that are far superior than what the average appraiser has access to, which adds value to the appraiser’s services.

The bottom line is that alternative valuation products are no more or less risky than other types of valuations—if they are done correctly. They do not represent a rejection of trusted appraisal standards and practices that have guided the industry for years. However, it is up to the users of alternative valuation products and other valuation products to understand what they are getting and choose their valuation providers wisely. After all, we can automate and simplify processes, but only if we are maintaining or improving quality. Let’s all hope this remains the goal, and endeavor to make it so.

About The Author

Jim Smith

Jim Smith is the president of Property Solutions, part of the Computershare group of companies and a provider of REO asset management, valuation and title services for the mortgage industry. He can be reached at jim.smith@computershare.com

Addressing Online Loan App Challenges

As the industry changes, Fiserv, Inc. is helping banks and credit unions deliver enhanced digital account opening and loan origination with Originate, a new suite of solutions built to provide the functionality and ease of use that on-the-move consumers are demanding.

The first solution in the suite, Originate Deposits from Fiserv, features a simple, step-by-step user interface with optional ID scanning, autofill, and facial recognition to allow consumers to easily and securely open an account or initiate a loan application from a mobile device, tablet, computer, or at a branch.

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Fiserv conducted extensive consumer research and user experience testing as a part of the product development process to identify pain points and shortcomings in current digital account opening and loan origination experiences. Originate Deposits alleviates multiple layers of friction to create an intuitive, step-by-step user experience that is fast, easy to use and uniform across channels – and results in higher user satisfaction and reduced abandonment. Numerous institutions are already selecting the solution for online account opening.

“When we saw Originate Deposits at the annual Forum client conference, we knew it could address a challenge we wanted to solve for our members,” said Paul Simons, CEO of Rantoul, Illinois-based Credit Union 1. “While we maintain a high volume of account openings, only a small percentage of our members were completing the process online. It was just too complex. The interface and flow in Originate Deposits are as intuitive as buying from a leading online retailer, and we are confident the solution will positively impact how our members start or expand their relationships with us.”

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Importantly, Originate Deposits supports multichannel strategies for financial institutions by maintaining the same experience and interface across channels, allowing users to complete an application wherever they are, in one or in multiple sessions, on a mobile device, tablet, computer – or in a branch.

“We’ve been looking at options for a better digital account opening experience, regardless of where or how our customers choose to complete the process,” said Sherri Wilson, senior vice president, technology of Towson, Maryland-based Hamilton Bank. “We’ve been able to work closely with Fiserv as we prepare to roll out Originate Deposits. It will allow us to deliver a better experience to our customers, who are increasingly mobile and have a high standard for their interactions with us.”

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Originate Deposits is launching now with account opening functionality, including credit cards and personal loans, and is integrated with other Fiserv digital solutions including the Mobiliti mobile banking and payments platform. Additional Originate solutions will add even more loan origination capabilities at the end of 2018 including retail, auto and mortgage.

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.

Millennials’ View Of Home Buying Examined

Millennials’ perceived value in buying a home dropped below 50 percent, down significantly from post-Brexit high, according to the latest ValueInsured quarterly Modern Homebuyer Survey:

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In the third quarter of 2018, 48 percent of all millennials believe buying a home in America today is a good investment; this is a record low, down from 54 percent in the second quarter. The previous high was 77 percent two years ago.

Fifty-eight percent of millennials now agree buying a home is the best financial decision they can make for themselves and their family, another survey low in ten quarters.

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Just over six in 10 millennials (61 percent) now believe buying a home is more beneficial than renting, again a survey low, down from a high of 83 percent two years ago.

While 76 percent of all homeowners believe now is a good time to sell a home, only 39 percent of millennials who want to become homeowners believe now is a good time to buy a home.

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The ValueInsured Housing Confidence Index for millennials registered a score of 56.9 on a hundred-point scale in Q3 2018. It is the lowest level recorded, down 1.7 points from Q2, and down 10.1 points from a year prior.

In addition to reporting a steady slide in their conviction for home buying, more millennials now associate owning with sacrifices:

Nearly one in four (23 percent) believe they need to delay having children in order to afford buying a home

Thirty-two percent do not believe they can afford a healthy and balanced diet while saving for a home at today’s high prices

Thirty-one percent seriously consider relocating to another city to afford buying

“Conventional wisdom assumed millennials were buying homes later because they chose to get married and have children later,” says Joe Melendez, CEO and founder of ValueInsured.  “New research now suggests homeownership may be the cause, not the effect, of delayed family formation. It is an alarming trend, and we see more acute evidence in expensive housing regions.”

Among millennials who are still interested and motived to become homeowners “in the near future,” their anticipation is often filled with anxiety. Among motivated first-time buyers, 49 percent are concerned rising mortgage rates could make homes currently within their budget become unaffordable later; 67 percent are concerned they will not save enough for a home they would actually like to live in; and 52 percent believe a home they buy now will likely drop in value within one year. Sixty-eight percent are concerned about another housing crisis; and 64 percent admit they will likely experience buyer’s remorse after reaching their homeownership goal.

Their trepidation could be explained by the high stakes these millennials plan to undertake. Eighty-five percent in the survey expect their home down payment to represent over half of their total personal assets.

“Most homebuyers experience a healthy amount of jitters before such a milestone purchase – that’s normal,” Melendez said. “But the new normal is highly anxious, inexperienced buyers bungee jumping in without knowing if their safety harnesses will work. That is an unhealthy, bordering on dysfunctional trend that our industry needs to mitigate to ensure we do not lose an entire generation of future homeowners.”

Equity National Title Launches Transaction Management Application

Equity National Title, a national settlement services provider, has launched a transaction management application which allows all parties to monitor the status of a real estate transaction in real time. Equity National Title partnered with Salem, Massachusetts-based Easy Mortgage Apps in the design and production of the new app. It is believed to be among the first to allow REALTORS, loan officers and consumers to securely monitor their transactions from the moment they enter Equity National Title’s workflow until the real estate closing.  

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The app will allow users to place orders; generate quotes; receive and share status updates and even determine whether an eClosing is permissible and, if so, in what form. All functions are available to the user 24/7 and any authorized user with Internet access can access the information. Users can also upload documents (such as missing identification; buyer authorizations and the like) and see scheduled closings, including the location (and map directions) and parties expected to attend. The app also sets forth the process in a series of timelines, including important dates and milestones, as well as current status.  The app is available for Apple devices.

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“The industry has talked for decades about an easier way for REALTORs, loan officers and borrowers to know where the transaction stands without having to call the title company,” said James K. O’Donnell, Esq., President of Equity National Title. “It has historically been one of the chokepoints of the transaction. With the Equity National Title app, authorized users simply have to log in—at any time of the day—to see exactly where their deals are. No voice mails. No waiting. No miscommunication.”

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According to O’Donnell, the app came about after a series of anonymous surveys Equity National Title conducted among mortgage lenders and REALTORS. The consensus finding in the surveys was that loan officers and REALTORS alike sought, above all else, responsiveness and clear communication from their title and settlement services partners.  Easy Mortgage Apps President, Michael Kelleher, agreed. “The idea of using an app to cut unnecessary waiting and uncertainty from the process was past due for the industry, and we were delighted to partner with Equity National Title to make it reality. In fact, we went from concept to launch in about 90 days.  Both partners were on the same page with the same focus:  eliminating as much wasted time and needless delay from the title transaction as possible.”

O’Donnell continued, “As important as compliance and service are, we’ve been told repeatedly that our lender and REALTOR partners want, above all else, to know exactly where the transaction is at all times…and not have to wait or dial into a website to chase that information.  The app will save users an enormous amount of time and help improve the L.O.’s ability to serve her own clients as well as the clients’ real estate agents.

O’Donnell is quick to confirm that security is not compromised for convenience with the Equity National Title app. Users must undergo a three-step authentication process, including an initial authorization which identifies (and later confirms) the device being used by the authorized party. The access to the production system is also not direct, but instead, routed through an intermediate server designed to prevent unauthorized access to the platform.  The app has no connection to or access to NPPI whatsoever.

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.

Ways For Title Agencies To Ensure Faster Closings For Their Lender Clients

Title companies have been under increasing pressure to increase efficiency, while also ensuring regulatory compliance and reducing costs. Across title operations, multiple parties are involved in almost every deal. Because no title agent wants to staff up, given the volume swings that the industry is seeing today, finding capable partners is the need of the hour.

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Title agents need to take control of their systems and processes so that they can ensure faster closings for their lender clients. What are ways for them to do this? In a new eBook the company has published, the company outlines the 8 key ideas for title agents to ensure faster closings for their lender clients.

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The work we do in the mortgage lending industry is too complex and has too many compliance ramifications; this work requires sophisticated technology,” said Alok Bansal, Managing Director at Visionet Systems. “The title industry, in particular, can significantly benefit from technology that will help them streamline and automate their workflows and meet their changing needs.”

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Some of the ideas that the eBook talks through in detail include automated workflows, intelligent vendor management, integrations, ease of use, managing security and compliance, having convenient features like bulk upload, auto-typing, the role of a customer communication portal, and the ability to customize and personalize your title production platform.  Download the eBook

Visionet provides back-office title services as well as a modern title production platform that meets or exceeds several or all of these requirements. With pay-as-you-go pricing to fit the specific needs and budget of each title company, Visionet’s back-office service offerings include title searches, loan reviews, loan modifications and HUD settlements to help agencies work faster, cheaper, and more accurately.

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.

A New Way To Increase Efficiency And Analyze Fraud Investigation Data

ACES Risk Management (ARMCO), a provider of technology for loan quality and compliance testing, data validation and analytics, announced the launch of Fraud Case Manager, a technology designed for managing and analyzing fraud investigations.

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“Fraud cases are full of confidential details and valuable data, and most lenders aren’t using this data to their advantage,” said Phil McCall, president of ARMCO. “Now lenders can use Fraud Case Manager to protect sensitive information, analyze data for strategies going forward, and increase efficiency and accuracy.” 

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Mortgage lenders, like all financial institutions, are required by law to monitor and report suspicious activities. Most lenders have numerous fraud investigations open at any given time. To manage them, they use spreadsheets or disparate technologies, both of which are prone to security breaches and errors. 

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Fraud Case Manager provides lenders with a secure, fully configurable web-based alternative where they can manage all fraud investigations in one central location, and avoid the risks and delays associated with traditional fraud case management methods. For example, users can track any detail of any case in seconds rather than searching through numerous spreadsheets and technologies. They can limit usage to authorized parties rather than using open access documents like spreadsheets. Fraud Case Manager allows users to analyze data and create comprehensive reports that provide valuable insights for strategies going forward, rather than remaining unaware of trends and reacting to repeated issues as they arise.

“Fraud will never be eliminated—lenders’ best defense is identifying trends as quickly as possible,” said McCall. “Now they can uncover the issues that trigger investigations in moments, whether brought about by staff members, oversights or any other variable. That’s the biggest step forward lenders can take in mitigating fraud risk.”

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.

Avoid Technology Disaster

Stories abound in the mortgage industry of large-scale technology implementations gone awry because what was delivered by the company’s IT department was not what the business stakeholders wanted. To avoid becoming another tale of mortgage industry woe, STRATMOR Group supports the creation of Business Level Agreements (BLAs) in addition to the traditional Service Level Agreements (SLAs) for IT projects.

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In her article, “May IT Be with You; Unleashing the Power of Business Level Agreements,” STRATMOR CEO Lisa Springer explains that in most mortgage companies, IT is guided primarily by internal and external SLAs, leaving out the business measures needed to give IT a voice in, and responsibility for, achieving enterprise business goals. Springer provides supporting data that indicates the disconnect between the business units and their IT team, and she draws on the expertise of two STRATMOR Senior Partners, Len Tichy and Michael Grad, for insight into the IT/business relationship.

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“There is a fundamental misunderstanding that IT is not as central to operations as Underwriting, Processing, and Closing,” says Tichy. “In many mortgage companies, IT is viewed as a group unto itself, a non-business unit expected to do the bidding of the business units who think they really know what the company needs. This approach puts IT into a near-vendor role, often keeping IT from the critical conversations held at the Big Kid’s Table where the decisions about business goals, success measurements and reward factors are decided.”

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In effect, “IT starts with one hand tied behind its back in most implementation projects,” says Tichy. “The relationship between technology and business must move out of the traditional ‘Your sandbox, my sandbox’ paradigm to a more collaborative playground where business and technology leaders have common goals, objectives and BLAs for achieving growth and the supporting financial goals.”

Springer says Business Level Agreements can help lender leadership get everyone on the same page and working toward reaching the lenders’ Target Operating Model objectives. “A BLA requires a business framework in which to work as well as an understanding of the business impact of the services being provided. By understanding the business metrics in which success will be measured, post technology deployment, both IT and the business can focus on the achievement of operational goals.”

Springer provides illustrations of a customer-centric Target Operating Model (TOM) and shows how the various elements of the TOM could be executed with a BLA integrated. She also offers possible BLA metrics and provides information on motivating and leading IT teams. “IT needs to have a seat at the strategy table,” says Springer. “IT’s participation in strategy design ensures that the organization has a well-rounded representation of business and technical experience and problem-solving capabilities to work through the challenges of doing business.”

In a second article, “Aligning Back Office Compensation with Achieving a Superior Borrower Experience,” STRATMOR Senior Partner Dr. Matt Lind draws upon data from STRATMOR’s 2017 Compensation Connection Study and MortgageSAT Borrowers Satisfaction Program. According to Lind: “Despite the emergence of Borrower Satisfaction as a key competitive success factor, virtually no lenders incorporate it into their back-office incentive compensation. The reason for this is that they are unable to monetize satisfaction.” Lind then goes on to show how to monetize borrower satisfaction for processors and closers—two roles critical in the origination process—and how they might then be rewarded or incentivized to further improve the borrower experience.

Click here to download the August 2018 edition of STRATMOR Insights for much more. To sign up to receive the report each month, please click here.

Also, connect with the most innovative technology players here.

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.

TD Bank Makes Moves To Go Digital

TD Bank has deployed their initial rollout of the Encompass digital mortgage solution, continuing Ellie Mae’s push upmarket into the largest lenders and banks in the United States. TD Bank is leveraging Encompass to streamline origination and call center vendor integrations onto one platform, speed up deployment of new online products, and significantly reduce the bank’s loan cycle time.

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TD Bank selected the Encompass platform because of their desire to improve the customer experience by leveraging an all-in-one system that will consolidate processes on a single, efficient, and easy-to-manage ecosystem. Encompass will enhance the bank’s ability to audit in-process loans, significantly reduce time to close, deploy new products faster and without gaps in services, and increase the bank’s overall nimbleness and flexibility. In addition, customers will now be able to access their disclosures online.

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TD Bank leveraged Ellie Mae’s Professional Services Organization for the implementation of Encompass. The implementation process required consensus from stakeholders across the organization reaching far beyond Encompass users, from technology groups in the United States and Canada, to downstream data systems to feed the bank’s diverse reporting needs. Ellie Mae’s proven implementation methodology with hundreds of Enterprise-class customers enables lenders to minimize costs, lower risks and accelerate team member adoption, leading to faster ROI. Ellie Mae’s Custom Solutions experience in delivering customized integrations built on top of the Encompass platform was leveraged by TD to collaboratively build out enhancements to further improve user efficiencies.

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“We are thrilled to announce that TD Bank has officially completed its initial rollout of Encompass,” said Jonathan Corr, president and CEO of Ellie Mae. “We’ve worked together to successfully transition TD from a legacy origination system to an agile solution equipped to handle the complexities and loan volume experienced by a leading national bank. We value the opportunity to partner with TD Bank to help them grow the mortgage lending arm of their business.”

“At TD, we place a strong and steadfast emphasis on continually enhancing both the customer and employee experiences,” said Rick Bechtel, EVP, Head of U.S. Mortgage Banking, TD Bank. “By leveraging Ellie Mae’s Encompass platform, we’re able to provide our customers with a simplified process, online access to documentation, and a substantial reduction in their loan closing time, all of which will dramatically enhance the mortgage lending experience. Simultaneously, Encompass will provide our employees with tools that increase efficiency and streamline processes – a huge win for the employee experience, as well. We could not be more excited to bring TD to the forefront of digital mortgage technology, and our Encompass deployment is the first step.”

Court Rules All Participants May Be Liable For Fraud Loss

CertifID, a real time identity management platform that helps protect real estate professionals from wire fraud, released its most recent white paper, “WIRE FRAUD IS EVERYONE’S PROBLEM.”  Written by Thomas Cronkright II, CEO and Co-Founder of CertifID, the white paper addresses the recent ruling by the District Court of Kansas in Bain v. Platinum Realty, LLC et al. which heightened the standard of care owed by transaction participants to prevent wire fraud losses.  (Bain v. Platinum Realty LLC et al., Case No. 16-CV-02326-JWL, Dist. Court, D. Kansas, 2018). According to the ruling, anyone, including title agents, underwriters and mortgage lenders, involved in a real estate transaction may be held liable where fraud occurs, regardless of the relationship between the parties.

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The jury in the Bain case found a real estate agent and her broker jointly and severally liable for 85% of losses incurred by a buyer when the buyer was tricked into wiring funds to a fraudulent account in connection with a real estate transaction.  Based on the pleadings and motions filed with the court, the real estate agent’s email account was compromised by cyber fraudsters who used the account access to send fraudulent wiring instructions to the buyer.  The buyer trusted the wiring instructions because they were sent directly from the agent’s email account and contained information relevant to the upcoming real estate closing.  The jury found the agent and her broker liable for negligent misrepresentation and ordered both of them to pay $167,129.27.  Importantly, there was no direct tie between the buyer and the agent or the broker, as the agent and broker in this case, represented the seller.  The buyer was an experienced real estate investor that was unrepresented.

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“The moral of the story appears to be that, no matter your role in the real estate transaction, you have a duty to take reasonable steps against cyber fraud,” said Cronkright. “Title companies; loan officers, attorneys or financial institutions…this ruling sends a strong signal that we’re all responsible to guard against cybercrime and wire fraud.”

Cronkright states the case appears to expand the duty of care in two ways. First, participants may be held jointly and severally liable for losses due to cybercrime if their email, systems or information is compromised.  Secondly, the standard of care may expand to all parties in a transaction regardless of direct contract or fiduciary relationships between them.

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The white paper includes the following:

>> Key facts, pleadings, pre-trial motion activity, verdict and post-verdict motions; and

>> Ways to meet the new standard of care including best practices to keep you and your customers safe.

It is now available for download at no cost at https://certifid.com/white-paper-new-standard-care/.

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.

SimpleNexus Recognized As A Top 500 Company By Inc.

SimpleNexus, a provider of enterprise digital mortgage solutions, was recognized as a top 500 company by ranking No. 359 in the recently-released 2018 Inc. 5000 List.

The recognition comes at a time of tremendous growth for SimpleNexus in both revenue and customer satisfaction. The company is known primarily for their private-label digital mortgage platform and mobile app. The platform connects mortgage lenders with borrowers and real estate agents, streamlining the exchange of data and documents for all parties throughout the loan lifecycle.

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SimpleNexus has 15 of the top 25 retail mortgage lenders in the US using its enterprise digital mortgage platform. Over $100 billion in transactions have flowed through the platform, and over 450,000 borrowers have used the SimpleNexus app.

The swift adoption of digital mortgage solutions is indicative of need for this service within the mortgage industry. “We are humbled by this recognition and acknowledge the direct role our lenders’ success using the platform has played in the significant growth we have experienced as a company,” stated Matt Hansen, SimpleNexus founder & CEO.

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More and more lenders are beginning to turn to a mobile-first approach for their digital mortgage solution, and as a result, more than 18,000 Mobile Originators™ are using SimpleNexus. The platform enables loan officers to close loans more quickly, increase realtor referrals, and gain a competitive advantage.

“The data shows that using SimpleNexus, originators can close loans up to 20 percent faster,” Hansen noted. With the ability to close loans quickly and efficiently, both lenders and borrowers are eager to switch to this mobile-first mentality for their digital mortgage needs.

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SimpleNexus joins the ranks of companies such as Intuit, Zappos, Under Armour, Microsoft, Patagonia, and other household names. Inc.’s 36-year history celebrates the unprecedented growth of American organizations from a multitude of industries.

“Companies that made the list, on average, have grown sixfold since 2014,” stated James Ledbetter, Inc. Editor-In-Chief. “During a stretch when the economy grew around 11 percent, that’s a result most business can only dream of,” Ledbetter continued.

Other inductees to the 2018 rankings include Peloton, Brooklinen, and PopSockets. All inductees will be recognized at the annual Inc. 500 conference and gala, which will take place in San Antonio, Texas, from Oct.17-18.