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Here’s What The Future Of Mortgage Technology Innovation Will Look Like …

For the sixth consecutive year, PROGRESS in Lending Association hosted its groundbreaking ENGAGE Event designed to engage the mortgage industry to discuss and find solutions to so many pressing  industry issues. This was a frank and thorough exchange of ideas and tips about how to solve the problems that face the mortgage industry.  Yesterday we reported on what the speakers said about the future of mortgage regulatory compliance. Here’s what they had to say about the future of mortgage technology innovation:

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“Looking back, the industry under estimated the amount of effort required to comply with TRID,” said Roger Gudobba, vice president, mortgage markets at CSi. “The industry is always reactive instead of being proactive. The new buzzword going around now is the digital mortgage. I hope it’s more then a buzzword. We as an industry need to focus on the data, which is what we always needed to do.”

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So, what will define a truly forward-looking and innovative mortgage company in the years ahead? “Burdens in many areas continue,” answered Paul Wetzel, product management lead for Mortgage Cadence. “You need an open platform with a modern interface. Ease of use is critical. The innovative technology firms will be adding quality development staff. The innovative system of the future will be scalable, compliant and include all of the fun stuff, too.”

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Case in point, let’s look at Fannie Mae’s launch of Collateral Underwriter. The GSE has invested a lot in development to roll out new tools to both digitize the process and ensure compliance, but is it working? “People are accepting of CU,” pointed out Lisa Binkley, senior vice president business development and mortgage services at Platinum Data Solutions. “However, people say that it is too manual. The UI is easy, but many feel like they need to know what’s underlying the decision of CU so they can address the findings. CU is an advance, but it has to be improved.”

The key to innovating is getting as many lenders to embrace smart automation. If lenders won’t automate at all, innovation just can’t happen. One way to get lenders to move faster is to offer more automation in one platform that is either all-in-one or tightly integrated to best-in-class players.

“It is an expansive and timely process for lenders to vet so many technology vendors,” explained Marc Riccio, president at Specialized Data Systems. “Vendors have to offer both lenders and borrowers a truly better process. You can’t just automate an old process, you have to automate to improve the process. For example, if you are working with someone on a mortgage, you should be able to offer them other products like a credit card, a boat loan, or something else, all from one system. Innovative technology allows lenders to work smarter.”

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.

Big Appraisal Technology Acquisition

Mercury Network, the valuation vendor management platform used by more than 700 lenders and Appraisal Management Companies (AMCs), has entered into a definitive agreement to acquire Platinum Data, a leading provider of valuation data and analytics solutions headquartered in Aliso Viejo, CA.

The country’s top 10 mortgage lenders already rely on Platinum Data’s analytical tools for appraisal quality control, and the two companies have offered an integrated solution serving the industry since beginning a partnership in January, 2015. No sale price was disclosed.

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“Appraisal quality is an increasingly important compliance requirement and the addition of Platinum Data’s technology will expand the suite of services available to both companies’ customers,” said Will Clemens, CEO of Mercury Network. “Platinum pioneered automated appraisal underwriting and quality control, and expanding these tools in Mercury Network will help the industry enhance appraisal quality and gain efficiency.”

“Mercury Network and Platinum Data customers will have even more options”, said Jennifer Miller, President of Mercury Network. “Both companies already have integrations with other quality control solutions and appraisal management systems, and those relationships will continue. Our goal is to make it as easy as possible for lenders, AMCs, credit unions, servicers, investors and their vendors to choose the best suite of services for their business.”

“This is one of those ideal situations where one plus one equals three,” said Phil Huff, president and CEO of Platinum Data Solutions. “We can do more together than we could individually. It’s an exciting time for both companies. Everyone—customers, partners and employees of both Platinum and Mercury—will benefit from the innovation and growth this venture will bring going forward.”

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Lance Fenton, Partner at Mercury’s primary investor, Serent Capital, noted, “Mercury’s growth over the past year has exceeded all our expectations, and this acquisition positions the company to rapidly expand their transaction footprint in the mortgage cycle. We look forward to working with the entire team to help deliver unmatched value to all customers.”

Platinum Data Solutions provides valuation data and analytics technologies that help mortgage lenders, servicers, investors, AMCs and their vendors value collateral, identify potential collateral weaknesses and manage collateral risk. The company’s online platform and analytical tools protect the country’s top 10 mortgage lenders and help hundreds of companies to perform due diligence and prevent collateral-based loss. Each year, Platinum Data protects billions of dollars in assets across the U.S. against collateral-based non-compliance, buybacks and other risks.
The company’s RealView system pioneered computer-assisted appraisal underwriting. Its valuation analytics channel provides the industry’s only turnkey services that assure the responsible use of AVMs. Platinum Data Solutions is based in Aliso Viejo, California and was founded in 2002.

“Going forward both companies will operate with open systems that collaborate with competitors in some cases,” added Clemens. “For lenders, we now have two other Platinum Data Solutions applications that we can offer them. For example, some of our lenders may want to use AVMs for HELOCs. We can now offer that service. We also have a bigger organization as compared to Platinum Data Solution so we can invest in Platinum and advance their systems faster.”

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.

Integration Streamlines Appraisal Quality

Platinum Data Solutions has enhanced its integration with Ellie Mae. The enhanced integration allows lenders to order Platinum Data’s RealView appraisal quality reports by submitting appraisal data in MISMO XML format directly through Encompass, to drive quality and efficiency in the loan origination process.

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Fannie Mae and Freddie Mac require appraisals to be in MISMO XML format when submitting appraisals to the UCDP (Uniform Collateral Data Portal). This enhanced integration enables lenders to maintain consistency of format throughout the appraisal underwriting, QC and UCDP submission processes.

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Platinum Data’s online platform and analytical tools are used to protect the country’s top 10 mortgage lenders, and are integrated into several leading mortgage and appraisal software systems.

RealView, Platinum Data’s flagship appraisal quality technology, pioneered automated appraisal underwriting and quality control. It uses business intelligence to analyze the thousands of data fields in an appraisal, identify inaccuracies, and relay its findings. In seconds and with just a few clicks, RealView produces a comprehensive yet streamlined report that enables lenders to quickly elevate quality and compliance. Each RealView report features color-coded scoring, a summary of findings, and a simplified dashboard format, and provides all the information users need to prevent appraisal-based compliance violations, enhance appraisal quality, and gain efficiency of process.

Making Appraisal QC Easier

Platinum Data Solutions, a provider of valuation data and analytics solutions, has launched RealView QB (Quality Bridge), an appraisal quality technology that allows users to authorize access and share information with third parties, including lenders, AMCs, appraisers and investors.

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RealView QB is a workflow feature in RealView, an appraisal quality technology. It enables a single, centralized system of record for appraisal quality control. With RealView QB, users can invite virtually any relevant party to access their appraisal quality and underwriting process on a limited, user-defined basis. These third parties simply log in to RealView, review appraisal QC results and immediate take action. Examples of these actions include resolving issues, providing explanations or revisions, asking questions, such as clarification on comp selection, and much more.

By sharing a single system of record, RealView QB can eliminate some of the most time consuming, error-prone activities in the mortgage process, such as rekeying appraisal information, communicating findings and requesting additional information.

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“The back-and-forth nature of the appraisal QC process slows the mortgage process and costs companies thousands of dollars each year. Plus, when lenders, AMCs, appraisers and investors operate in silos, it’s difficult to achieve transparency,” said Phil Huff, president and CEO of Platinum Data. “RealView QB’s real-time information sharing reduces mistakes and repetitive tasks while bringing transparency to appraisal QC. All parties benefit from lower costs and protected margins, and the industry as a whole gains the transparency it needs.”

About The Author

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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.

New Appraisal Review Product Launches

Platinum Data Solutions, a provider of valuation data and analytics solutions, has launched RS3, an automated appraisal compliance review tool that evaluates appraisals for compliance with USPAP (Uniform Standards of Professional Appraisal Practice) Standard 3 guidelines. Several states have adopted regulations that require appraisal management companies (AMCs) to review a percentage or portion of the appraisals they transact in compliance with USPAP’s Standard 3.

“RS3 helps AMCs comply with state appraisal review regulations in moments, and for a fraction of the price that they’d pay to conduct these reviews manually,” said Phil Huff, Platinum Data’s CEO.

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“A lot of AMCs are using compliance desk reviews, which generally cost less than a standard review, but can still run $75 to $150, and take anywhere from 48 hours to four days,” said Chris Brownlee, chief appraiser for Property Interlink, a national AMC with headquarters in Houston, Texas. “Platinum’s RS3 allows us to be a lot faster, more efficient and more cost effective than AMCs who are handling these reviews manually.”

USPAP represents the generally accepted standards for professional appraisal practice in North America. USPAP’s Standard 3 dictates the accepted process for determining how well a given appraisal report complies with USPAP Standards 1 and 2, which govern the development and reporting of an appraisal report.

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RS3 is built on Platinum Data’s RealView appraisal quality platform. It can review an appraisal report for compliance with USPAP’s Standard 3 and relay its findings in a matter of seconds. The RS3 report is designed to help users immediately identify the most important findings. It uses visual cues like color and object placement to differentiate findings such as compliance violations, inconsistencies, errors and outliers.

“The RealView platform is making appraisal quality and compliance accessible for the entire industry,” said Huff. “Lenders, AMCs and appraisers can all benefit from using automation to impart speed, accuracy and consistency to rote and tedious tasks. However, different parties have different needs for the level of analytics needed to evaluate an appraisal. RS3 was designed for AMCs that want to conduct compliant appraisal reviews, and it’s priced accordingly.”

Talking True Innovation

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Over 100 mortgage executives came together to attend PROGRESS in Lending Association’s Fifth 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 most of 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 again? 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?

TYLER SHERMAN: Innovation comes from the Latin nova/novus, which simply means “new”. Innovation is a term that can be used anywhere anyone is trying something new. This doesn’t have to be new by global standards. What is new to one organization may not be new to another, but that doesn’t mean that the former isn’t innovating. Whether a firm is undergoing a comprehensive change or trying new things a little at a time, any time an old methodology is discarded in favor of a new one, it’s an innovation.

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MARK HOPKINS: I think innovation could be both, sweeping and incremental. The most successful innovators I know are always aware of the value of iteration. That means they release a tool that’s very useful, but is really only a smaller version of their bigger idea – the seed. Then, they build from there to create innovations that are sweeping. Ideas can be innovative, but to be considered successful innovations, I believe the ideas must also be well-executed, and that often means executed incrementally.

ROB STRICKLAND: Innovation represents a new way of thinking about and solving existing and anticipated industry challenges. Varying degrees of value can be achieved in line with the number of problems solved, ease of integration and use as well as the improved results achieved. Because mortgage origination is an extensive supply chain, the greater the number of dimensions a single solution stack addresses, the more valuable and “sweeping” it will be. Conversely, if a solution addresses a few challenges, but that solution comes with its own limitations, what is the point? For instance, piecing together functional modules based on disparate stone-age technology may represent vendor progress, but its inherent architectural limitations would forever restrict it from being labeled as the “break-through transformation” the industry deserves.

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CHRIS APPIE: The mortgage as a financing tool has been around for hundreds of years, and for much of that time the body of law governing it was largely based on case law. While statutory law has displaced case law as the tool that affects industry change in the last 50 years or so, that does not change the fact that the fundamentals of the mortgage system were built slowly over a long time period. Not surprisingly, changing that system and the processes around it takes tremendous time and commitment. Historically, ours is an industry of incremental innovations that lead to continuous improvement. That said, when there are significant innovations in our space, they are often implemented in response to a major regulatory change; the system is so complex that it literally takes government involvement to cause rapid innovation. I would say that innovations can be both sweeping and incremental but for our industry, the sweeping changes are almost always the result of major regulatory developments. It’s my hope (and the hope of many others) that our industry can somehow harness some of this energy and provide sweeping innovations to other parts of the mortgage system based on market conditions rather than governmental requirements alone.

CHERI BOOTH: Innovation is a new method idea or product to improve productivity, and bottom line profit. Sometimes you have an archaic process that consumes a large amount of labor and by innovating a new process you are able to get more productivity, which lowers costs and improves profit.

LISA BINKLEY: Innovation is identifying a need and creating the solution that fulfills that need. Some companies have solved market needs without identifying the need first. While lucky, that doesn’t count as innovation. Platinum, however, has a history of innovating. We identify marketing needs and produce solutions. We were the first to create an appraisal QC technology, and we’re still the only company to provide not only an AVM suitability testing technology, but also a free appraiser-facing appraisal review tool.

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

TYLER SHERMAN: In terms of innovation, the mortgage industry as a whole is in a state of decay. There are some innovations to be found, but by and large, lack of innovation has been harming this industry for decades. While the size and global economic significance of the industry are well known, so are its outdated manual processes. A standard model has yet to emerge that accounts for the operational balance of human and technological resources and the best way to manage them, the hallmark of an industry that has yet to fully mature, even though the industry has existed for two centuries. Although spreadsheets, the chief analytics vehicle of the industry are considered primitive, and in certain cases are being discarded in favor of innovations like business intelligence, there is still a significant contingent that has yet to fully embrace spreadsheets. The degree to which pen and paper, or marker and whiteboard appear as the main record keeping vehicles with no digital counterpart serves to underscore and clarify the pronounced industry-wide reaction to regulatory or procedural changes like TRID. The new TRID rule basically asks mortgage lenders and brokers to be more efficient, essentially finishing loan files at least three days before the loan is scheduled to close. While some lenders are already doing this ahead of the deadline with considerable ease, most of the industry decries the change as insurmountable. This reaction is rooted in a lack of control that is emblematic of any underdeveloped firm or industry.

MARK HOPKINS: I think innovation in our industry is definitely thriving.  As margins shrink and competition heats up, lenders and AMCs are hungry for technology that will solve their new compliance challenges, as well as reduce their overhead and improve operations. When there’s a need like we have in the industry now, smart innovators really thrive. The PROGRESS in Lending Innovation Awards are a great snapshot of what the industry is doing as a whole, and I think it’s clear we’re in a very exciting time for technology innovation.

ROB STRICKLAND: I think the industry is somewhere in the middle. There are many new entrants seeking to address parts of the origination transaction. There does appear to be significant interest in modernizing and improving the user experience, which is clearly warranted. I think the best results will come from firms who have significant industry experience and a knack for using newer technologies to address broader business process challenges.

CHRIS APPIE: I believe innovation is thriving in the mortgage industry both because of market conditions and governmental regulation. It’s an interesting time. Because of the CFPB’s focus on the needs of consumers, the regulatory landscape is evolving based on the perceived needs of consumers rather than a purely market-driven environment. That evolution is not going to stall and companies are going to be forced to keep up with those requirements. In addition, consumers are driving the technology they want to use in all aspects of their lives, including financial transactions. This bifurcation will likely require more innovative development to keep up with demand that is–either directly or indirectly from the CFPB–being driven by consumers. Those in the industry who can’t offer innovative solutions to meet these challenges run the risk of becoming irrelevant and fading into the background.

CHERI BOOTH: It’s all over the board, I think sometimes there is a tendency for innovation to be overwhelming and I think that is why most people don’t implement. I think you need to segment your business into parts and then look to that segment. I would choose the segment that is hurting the most and then move towards the next one, etc.

LISA BINKLEY: When we compare innovation in the mortgage sector with the level of innovation in the rest of the world, it looks like we’re lagging behind. That said, I wouldn’t go so far as to say that we’re in a state of decay. Sure, innovation can be slow in our industry. But that’s because our industry has traditionally been slow at adopting new technology. Rather than innovating and trying to coax a community of slow adopters, most companies play it safe by copying existing technologies that have successfully created or broken new markets. Being an innovator isn’t easy, but someone’s got to take the lead and move the mortgage industry forward.

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?

TYLER SHERMAN: The best possible course of action for any mortgage lender and/or the industry as a whole would be to learn from every other industry on Earth whose survival has depended upon the adoption of new business tools rooted in data science. Mortgage firms inherently have a treasure trove of transactional and ancillary data that if properly leveraged, can clarify business concerns, processes, and decisions and revolutionize the way they operate. Understanding the nature of corporate data stores and their potential, along with embracing the tools and techniques necessary to leverage that data to its fullest should be the chief concern of every mortgage enterprise in the market today.

MARK HOPKINS: Obviously, all innovation to support lenders in meeting new compliance and investor requirements should be our top priority. There’s a basic level of need that must be met, and those innovations may take up the majority of the next twelve months, leaving very little room for much else. However, stemming from compliance requirements around transparency for borrowers, I’ve seen some exciting progress on innovations that could actually create more mortgage demand by engaging more potential borrowers in the process.

ROB STRICKLAND: I think the industry has been craving an agile integrated origination solution that can simultaneously addresses its core challenges of Processing Efficiency, Customer Satisfaction, Compliance Rules and Lower Costs. Most of today’s well known LOS solutions are grounded in outdated inflexible architecture so their ability to orchestrate automated digital processing is severely constrained.   Newer Cloud solutions that can deliver an improved digital experience will be well received.

CHRIS APPIE: The next year is going to be focused on ensuring compliance with all aspects of Dodd-Frank without exposing lenders to more risk in the process. The industry needs to provide solutions that support business agility while helping lenders avoid the various and evolving risk types to which they’re exposed.

CHERI BOOTH: The loan originator needs to become the educator, not the sales person. The millennial is thirsty for information, but more importantly the right information, in short byte size chunks of video. The other thing that needs to happen is this customer requires a lot more patience on our part. They take a long time to make a decision. This borrower needs to research, absorb, research some more, make a decision. It is ultra-important for the word pipeline to be redefined, maybe even call it pre-pipeline.

LISA BINKLEY: A technology that leverages big data in the valuation sector. Virtually every other segment is using big data to make decisions. The mortgage industry, its components and it processes are at the crux of the American economy. Even so, the mortgage sector still fulfills the majority of the collateral valuation process manually. I’m not saying we need to rely 100% on technology. We need human talent, in the form of trained analysts in this segment. However, those analysts are missing out if they’re not leveraging big data analytics. Any entity that incorporates big data into their evaluations, whether the appraiser, AMC, lender or investor, will make better, safer—not to mention faster—decisions.

True Leadership

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Market conditions call for innovation. Now is not the time to retrench or recoil, now is the time to step up and improve this business. So, at the fourth annual ENGAGE Event held last year we invited four of the most dynamic women leaders in mortgage lending to speak on this topic. The conversation was so spirited and thoughtful, that we gathered these women again to discuss what a true mortgage leader should be doing now in order to thrive. Here’s what (pictured left to right) Kelly Purcell, Executive Vice President, Global Sales and Marketing for eSignSystems; Lisa Binkley, Senior Vice President at Platinum Data Solutions; Lisa Springer, Managing Director, Chief Operating Officer at STRATMOR Group; and Molly Dowdy, the Executive Vice President of Marketing at Mercury Network; had to say:

Q: What does the industry need to do to develop the next generation of women mortgage leaders?  

KELLY PURCELL: The bottom line is that we need to encourage young women to get involved in professional mentoring groups, associations in the industry to get them to gather with each other and other industry leaders so they have a voice at the table.

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MOLLY DOWDY: I think the lack of women in management positions in the mortgage industry is a serious problem, but it will eventually correct itself regardless of what we do. The fact is, women control the majority of mortgage decisions in this country, and that rate will continue to rise. The companies strategically planning for success will pay attention to those trends and will put women in top positions to capitalize on more of that growing market. In this industry, I don’t think any metric is more compelling than bottom line revenue, and companies that recognize the importance of diversity will be far more profitable and competitive than those that don’t. Diverse companies that are squarely focused on their customers (more than half of which will be women, if they’re not already) will dominate the old fashioned companies that keep doing the same old things.

Of course, there are dozens of other compelling reasons to put women in leadership positions in our industry, but money talks. Firms in our industry that are interested in maximizing profits will undoubtedly hire women for key positions. Those that don’t will be passed by.

LISA BINKLEY: The mortgage industry has actually done a fairly good job of providing opportunity to women in middle management roles, quality assurance and underwriting. What they need to do is to provide more opportunity to women in and above the senior executive level. There are a number of women who have become very successful CEOs in this industry, but with the large players—like Citi, Chase, BoA, Wells, Equifax— the executive arena is still a white male-dominated field. The big players need to get women in leadership roles to drive the industry forward.

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LISA SPRINGER: The actions we need to take to bring up the next generation of women mortgage leaders equally applies to how we bring up all generations of leaders, male and female. In fact, while gender inequality has long been a critical issue for female leaders who are now of a certain age, I believe it will be much less of an issue for future generations of women. And that’s good, because we have plenty of other cross-generational issues to deal with right now.

Our industry must first focus on the differences between the various generations that are now working together in our companies. I would argue that the differences between these generational groups form much wider gaps than the differences between male and female co-workers within any of these groups. Each generation thinks and works so differently that building effective teams is becoming increasingly difficult. For instance, Baby Boomers focus on working harder, Gen Xers work to live versus live to work, and Gen Yers work for a “cause.” These divergent work philosophies pose a significant threat to companies today. According to Caliperonline.com, women leaders “demonstrate an inclusive, team-building leadership style of problem solving and decision making.” Lenders that recognize and leverage this quality in women leaders will improve their success as they strive to close these generational gaps.

Q: How would you define mortgage lending innovation these days?

LISA BINKLEY: Innovation for today would be a process for originating compliant, profitable loans in a cost-effective, efficient manner. Innovation means removing manual processes wherever possible, and implementing technology that differentiates between the processes where technology elevates compliance, quality and efficiency, and the exceptions that require human logic to resolve. A best-of-both-worlds innovation keeps humans as the decision-making entity but eliminates the box-checking, i-dotting and t-crossing from their process.

KELLY PURCELL: Innovation happens when you think creatively. When we look at the mortgage industry today, there is a lot of forward thinking, and out-of-the-box solutions coming out about how to improve the process. Most of this energy is all focused on the new Loan Estimate and Closing Disclosure, but that will broaden after the August deadline. Out industry is innovating.

MOLLY DOWDY: For now, innovation needs to be focused on helping lenders and others understand and comply with all the new regulations. We’ve seen several instances lately of technology providers just continuing to trick out their own software offerings, without paying attention to what their customers really need. It sounds ridiculous to say out loud, but technology companies that serve the industry have to be in front of the latest requirements so their customers have at least the basics covered. Features on top of those that ensure a lender’s minimum compliance are icing on the cake, but can’t come first. It’s sort of like sending your kid to school on a snowy day with a really awesome new hat, but forgetting their coat.

LISA SPRINGER: Many would be tempted to answer this question by tying innovation directly to technology. I know I would have when I was working for mortgage technology vendors. Today, I believe that the innovation our industry most desperately needs isn’t about technology; it’s about the relationships we choose to value.

In the past, our “customers” were the next players in the chain that took the mortgage asset from origination through to the secondary market. Brokers served wholesale lenders, who served larger correspondent lenders or aggregators, who created securities for sale to other investors. The borrower wasn’t a customer so much as a work input. Today, our federal regulator would see that changed.

The consumer experience is where I expect to see future innovation in the mortgage space because failure here comes at very high cost. The government expects us to refocus our businesses on the consumer and is fining those who fail to do so. But beyond that, failure to meet the expectations of today’s consumers will result in a much greater negative impact than ever before due to their vast social networks. An unhappy consumer of 20 years ago may have only told a handful of people

Q: What key elements and/or technology do lenders need to implement to adapt to new regulatory change?

LISA BINKLEY: Appraisal quality technology. The collateral approval process must be standardized. Companies need to forcefully demonstrate that they are treating all appraisals in the same fashion, every single time, for every different consumer. Additionally, they need to leverage their own appraisal data for market and appraiser intelligence OUTSIDE of UCDP or the Agencies.

KELLY PURCELL: It’s all about going electronic or “e.” If you think about it, “e” will be key to compliance with TRID because there just is no other way. Lenders must use the same provider to produce the Loan Estimate and Closing Disclosure, so that the lender can compare that the data is the same. And that’s just one example of many that I can site where “e” is the answer.

LISA SPRINGER: I have two perspectives; one with a long-term view and one for 2015.

The long-term adaptation is a keen focus on measuring the customer experience. We need to develop methodologies, technologies and protocols to reliably measure our impact on the consumers we serve and then quickly repair mistakes while we capitalize on our successes. Some tools are available for this now and we expect to see more innovation here in the future.

In the short-term, for 2015, it’s all about the documents. The new integrated disclosures will go into effect in August and every lender should already be in testing mode, whether they are building their own docs, as some of the larger lenders are, or working with a 3rd party provider. This is a very big change for our industry and many are still not ready for it. Those that fail to have a tested solution in place will be in a very precarious position come August.

MOLLY DOWDY: The most important thing lenders need to do in my opinion, is make sure they have a very flexible technology infrastructure. With a solid foundation, they can plug in any technology solution they wish to use without overhauling their entire back end system. Trying new technology is critical to competitiveness, so a lender’s infrastructure has to be agile enough to allow them to choose the very best solutions available, and not just what works with an old legacy platform built in the 90s.

Q: What industry advances are needed over the next 12 months to ensure every lender’s future success?

MOLLY DOWDY: That’s a good question. I don’t think there are industry advances that can ensure every lender’s future success. But there are many advances that smart lenders can jump on to ensure their own success. A focus on the borrower’s overall experience is critical, and lenders with progressive views on this will gain market share over those that don’t change with the times.

LISA BINKLEY: Companies need to get beyond being “too busy to improve” and implement technology that promotes quality loan manufacturing. They must start promoting consistency and efficiency of process across the origination and funding of a loan. Lenders need to implement fool-proof disclosure processes and insert hard stops to ensure the disclosures and documents upon which the loan decision was made, are the same as the documents they will be delivering with the loan. Additionally, they must start using technology to approve their appraisals, and not rely on Collateral Underwriter—a technology that was designed to protect Fannie Mae, NOT lenders or AMCs—as their appraisal QC. Lenders, AMCs and appraisers all owe it to themselves to know more about the appraisal than Fannie Mae or Freddie Mac knows about the appraisal.

KELLY PURCELL: We need more and better education around key topics. For example, lenders need more education and understanding about the implications of non-compliance with TRID. Other concepts like eNotorization for one, need to be demystified. The possibilities for lenders to use these technologies and succeed are endless.

LISA SPRINGER: Ensuring every lender’s success is not a realistic objective. In any business, some fail each year. In our heavily regulated business, we’ve seen a great many failures and will surely see more. But if I had to choose a single area in which an advance could provide the most benefit to our industry, I would focus on corporate culture.

In many industries, executives often pay lip service to this concept, or they adopt a hands-off approach that usually sees their culture devolve into a “survival of the fittest” type of paradigm. Neither of these approaches will serve our industry well, not in an environment where lenders are held accountable for the actions of everyone within their organization as well as any 3rd party provider they choose to work with. We need to build strong corporate cultures that focus on rebuilding trust in our industry, ensure compliance with industry regulations, and adhere to each organization’s unique approach for success.

INSIDER PROFILE

Lisa Binkley is Senior Vice President at Platinum Data Solutions. She is responsible for the mortgage services division including product development, project management, sales support and client consulting services. Lisa brings more than 25 years of mortgage industry experience to her position. Prior to joining Platinum, she was Senior Director, Product Design & Business Development with IMARC, Director, Product Solutions, Equifax and Executive Vice President with Rapid Reporting Verification Company.

INSIDER PROFILE

Molly Dowdy is the Executive Vice President of Marketing at Mercury Network, the leading provider of technology and web solutions for lenders, AMCs, appraisers, agents, and inspectors. Molly has more than 15 years of experience in marketing to this industry, with specialized knowledge of marketing technology-based products and services. a la mode has twice received PROGRESS in Lending’s prestigious Innovations Award.

INSIDER PROFILE

Kelly Purcell is Executive Vice President, Global Sales and Marketing for eSignSystems, a division of DocMagic. eSignSystems is a provider of e-signature and e-vaulting solutions. She was co-founder of eSignSystems and has over 25 years of mortgage and technology experience. Kelly is recognized as an evangelist and advocate of e-signature and e-vaulting technology driving e-mortgage adoption. She held prior positions at GE Capital and Transamerica Financial Services.

INSIDER PROFILE

Lisa Springer is Managing Director, Chief Operating Officer at STRATMOR Group. Lisa s charged with ensuring that the integrity and “boutique” nature of the STRATMOR Group remains intact while, at the same time, creating improved services offerings, intellectual expertise in the form of salable white papers, case studies, survey results and peer group analyses and instilling best practices across all lines of STRATMOR Group’s business.

Embracing Appraisal Accuracy

Bradford Technologies, a provider of in computer-aided appraising technology, has integrated its ClickFORMS appraisal technology with Platinum Data Solutions’ FreeAppraisalReview.com, a zero-cost appraisal review technology created specifically for residential real estate appraisers. Starting in mid-February, every appraisal prepared with ClickFORMS will be automatically reviewed by FreeAppraisalReview.com.

Based on Platinum Data’s RealView appraisal quality technology for lenders and AMCs, FreeAppraisalReview.com is a comprehensive and cost-free appraiser-facing appraisal review technology. It takes only seconds to screen appraisals for the most common causes of returned appraisals, including Collateral Underwriter’s “hard stops” and warnings, and to report its findings in simple, actionable language.

“This integration makes ClickFORMS the only technology of its kind to provide this caliber of screening, automatically, on every single appraisal,” said Jeff Bradford, CEO of Bradford Technologies. “We’re in a market where mistakes and oversights can bring about some very unwanted consequences. By screening every appraisal with FreeAppraisalReview.com we’re helping our ClickFORMS users protect their reputations, work better and faster with their lender and AMC customers, and prevent losing valuable time dealing with reviewer requests.”

On January 26, 2015, Fannie Mae began using Collateral Underwriter to evaluate appraisals. Many appraisers have expressed concern about how its use will impact them not only on an individual level, but also for the appraiser community as a whole.

“Bradford Technologies’ entire focus is on addressing appraiser needs,” said Bradford. “Appraisers are concerned about CU and other review systems. Automatic screening through FreeAppraisalReview.com is just one more way we’re setting ourselves apart as appraisers’ best, safest choice in appraisal report processing technology.”

“We’re very happy to be partnering with companies like Bradford Technologies that understand the future of the appraisal segment is all about leveraging data and analytics,” said Platinum Data’s CEO Phil Huff. “Platinum Data provides user-specific analytical tools that help appraisers, AMCs and lenders to protect themselves and ultimately, to self-regulate when it comes to appraisal quality. Bradford is furthering that cause by assuring that 100% of their appraiser customers are protected by the objective, thorough analysis of FreeAppraisalReview.com.”

Bradford Technologies is known for pioneering computer aided appraising, the process of utilizing analytical technology to help appraisers determine the value of a property. Its ClickFORMS technology, known for its powerful, yet intuitive simplicity and ease of use, has distinguished itself among the appraiser community with its faster ramp up times and significantly lower support requirements.

About The Author

[author_bio]

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.

Enhancing Compliance Screening

Platinum Data Solutions has updated FreeAppraisalReview.com, a cost-free automated appraisal quality technology designed specifically for residential real estate appraisers. Starting January 26, 2015, FreeAppraisalReview.com will automatically screen for Collateral Underwriter’s findings, including 17 of its 21 “hard stops.”

The remaining four of the 21 “hard stop” findings are based on proprietary information held by Fannie Mae, creator of Collateral Underwriter. Platinum Data’s RealView lender- and AMC-specific appraisal QC technology will also automatically screen for Collateral Underwriter’s findings, including the same 17 “hard stops.” RealView can also be configured to automatically screen for the four remaining findings in a matter of minutes.

According to Fannie Mae:

On January 26, 2015, the severity level for 21 Fannie Mae proprietary appraisal messages that relate to eligibility violations will be modified. The severity level will change from a warning message that is automatically overridden to a hard stop that will require a lender action (a manual override or the submission of a corrected appraisal) to obtain a “Successful” submission status in the UCDP.

“Collateral Underwriter is changing the appraisal process—the professional community that uses residential appraisals is eager for tools that minimize its risks and inefficiencies,” said Phil Huff, CEO of Platinum Data Solutions. “They want CU hard stops incorporated in segment-specific appraisal quality technologies, so we that’s what we did with both our appraiser-facing tool and our lender and AMC-specific software. Platinum Data is the Appraisal Quality CompanySM, and we respond to what the market’s unique segments need.”

Over 5,000 appraisers—as well as numerous lenders and AMCs—have signed up and used FreeAppraisalReview.com since it was launched in September 2014. FreeAppraisalReview.com takes only a few seconds to screen appraisals for the most common issues that cause lenders to return appraisals to appraisers, and relay its findings to users in an easy-to-understand online report. FreeAppraisalReview.com is accessible via any internet-connected device. First-time users can set up accounts and start using the service in less than 60 seconds.

The Problem With Appraisals

It’s hard to trust appraisals when more than 17% of appraisals on purchase transactions were found to report a value less than the value of the contract price. This is according to Platinum Data Solutions, a provider of collateral valuation and risk assessment technologies, which based this information on data collected from FreeAppraisalReview, a cost-free automated appraisal quality technology designed specifically for residential real estate appraisers.

According to Phil Huff, Platinum Data’s CEO, this data could indicate that home values have plateaued, or that appraisers are simply being more cautious when valuing properties.

“When one in five appraisals is lower than the contract price, it’s worth taking a deeper delve to find out what property values are doing,” he said. “For example, it could mean that buyers are paying more than a property is actually worth, possibly because the market is starting to stabilize. On the other hand, it could indicate that appraisers are being more conservative in valuing properties, which—given the regulations they’re facing—would be understandable.”

FreeAppraisalReview.com was launched in late September, but was in beta testing for several months prior. Over 5,000 appraisers have used FreeAppraisalReview.com since mid-September 2014.

FreeAppraisalReview.com was designed to help appraisers, as well as the lenders and AMCs with which they work, to save time by identifying basic errors and omissions. Appraisers simply upload their appraisals to the free site and in just a few seconds, FreeAppraisalReview.com screens appraisals based on over 1,100 best practice rules and guidelines, and reports its findings in a clear, actionable format. In doing so, it enables appraisers to locate and correct the most common culprits of returned appraisals prior to submitting the appraisal report to the AMC (appraisal management company) or lender.

Returned appraisals are the most frequent grievance among lenders and appraisers because they drain efficiency and reduce profitability. When lenders and AMCs catch errors, they return the report to the appraiser for corrections or clarifications. This can cause days-long delays, not to mention a reduction in profit margins for everyone involved: the appraiser, AMC and lender.

“Lenders and investors would be wise to keep their eyes on trends like this,” said Huff. “If frequent lower appraised values are reflective of a stabilizing or declining market, that could present a major impediment to the quality of loans they’re transacting, selling and buying.”

About The Author

[author_bio]

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.