"Nothing is more powerful than an idea whose time has come."
In the appraisal modernization realm, Monty Marcus believes that open minds are paving the way to industry-wide progress. A seasoned expert in the valuation space - he began appraising properties more than 35 years ago - Marcus has been a driving force behind the development and adoption of hybrid appraisals at ServiceLink, where he serves as vice president, Hybrid Valuations. Now that Fannie Mae and Freddie Mac have put the full force of their influence behind appraisal modernization, he looks forward to the industry's broader use of innovative valuation tools.
"A modernized appraisal process enables mortgage originators to get more appraisals done in the same amount of time, and results in appraisals of better or equal quality than traditional methods, because it allows appraisers to focus on doing what they do best: the analysis," says Marcus. "Streamlining the appraisal process delivers new efficiencies, for sure, and it does much more: It helps strengthen lender/appraiser/AMC relationships and positions the mortgage industry to attract a new generation of appraisers. It is certainly an idea whose time has come."
Most lenders agree. When Fannie Mae surveyed senior mortgage executives in February 2022, 94% agreed that appraisal modernization efforts are valuable to the industry. According to this quarterly Mortgage Lender Sentiment Survey lenders cited potential benefits including shortening loan origination cycle time, enhancing appraiser capacity and lowering consumer/borrower costs.
"Today's homebuyers require a seamless experience. They don't want to engage over the phone or get tied up in time-consuming processes related to their mortgages," says Matt Woodhouse, managing director, ServiceLink Valuations. "As an industry, we have the opportunity to innovate throughout the origination process, reducing cycle times, building in cost efficiencies, and really excelling on the customer side. Appraisal modernization is one critical area where, backed by the GSEs, we can collectively move the industry forward."
Technology partners are key to appraisal modernization success
Lenders stepping into the future of valuations see a challenging course ahead. Operationalizing new solutions will mean changes to processes, infrastructure, training and more. Having the right technology partner - one with deep mortgage expertise and experience in addition to exceptional technological capabilities - can ease the way and ensure you are always ready for what's next.
"As lenders familiarize themselves with new products and stand-up processes around eligibility, underwriting and risk, they should be confident in their technology partner's expertise," says Erin Reed, vice president, Originations Valuations, ServiceLink. "ServiceLink, for example, works as a business partner with many lenders, and so we can bring broad perspective to process and workflow challenges. We help our partners identify best practices that support their individual circumstances and objectives, and we serve as a sounding board, helping ensure they have dotted all the i's and crossed all the t's."
Here are some key differentiators to explore as you assess technology partners:
A collaborative spirit. In an area as complex as origination modernization, working with people who get it - who understand the reasons behind the changes and have the requisite expertise to lead the way- is vital to your success. And knowledge is just the start. What really makes one tech partner stand out from the rest is that their people work together to develop innovative, effective solutions.
"We are always in the room together, trying to figure out the best way to move forward with processes so that we are taking into account the considerations of everyone involved: lender, consumer, appraiser, technology folks and our leadership team," says Reed. "We're very good at sharing and understanding what downstream impacts are possible, how we can address any issues and what the best experience will be for all parties involved. This collaboration is key to setting our lender partners up for success in the new valuations environment."
Also, key is the valuations expertise your technology partner brings. ServiceLink has a national appraiser panel capable of completing hybrid, desktop, and traditional appraisals. "Our appraisers average 17 years of experience and are held to the most stringent standards," Marcus says. "We make significant investments in training, evaluation, and communication so that our appraiser panel is as well-equipped and well-informed as they can be. The fact that ServiceLink has been doing hybrid appraisals for 15 years gives our appraisers an edge as the new GSE standards start falling into place."
Technology to support your goals. Modernizing and simplifying the origination process, from application, title, and appraisal through closing, relies on having the right technology platform, tools, and workflows. ServiceLink's EXOS® technology platform integrates with lenders' core operations to digitize processes and provide self-service tools to enhance the borrower's experience.
In the valuations space, EXOS builds efficiency, accuracy, and transparency into appraisal processes, from supporting the delivery of inspection data to appraisers conducting hybrid and desktop evaluations to streamlining workflows on the lender side. For traditional appraisals, ServiceLink directly connects the borrower or their real estate agent with the appraiser through the EXOS® Valuations self-scheduling app, which eliminates the back-and-forth communication that was only recently an accepted part of the originations process. Users can schedule their inspections within minutes, sometimes seconds, which can shave days off turn times.
"Right now, about 60% of our appraisals flow through EXOS Valuations, and that's just one area where we are streamlining processes," Woodhouse shares. "Another opportunity lenders can leverage is our quality control and underwriting system. Our robust system enables the lender to focus on making loans, not re-reviewing appraisals that we deliver to them on the back end. We stand behind our appraisals because we take the time up front to ensure that we are fully aligned with each lender's specific underwriting requirements."
Woodhouse adds that appraisal modernization is just one element of the sweeping origination modernization ServiceLink envisions for the industry. "For lenders who are tapping into the broad range of digital solutions available to them - instant title, self-service mortgage apps, desktop appraisals and eClosing options, to name a few - a fully modernized approach to mortgage origination is well within reach."
Steadfast commitment to compliance and security. The continual evolution of mortgage standards and regulatory requirements comes into strong focus today, as Fannie Mae and Freddie Mac are so actively engaged in appraisal modernization efforts. A technology partner who can navigate this changing landscape - who is in lockstep with the GSEs and provides expansive compliance oversight - is an invaluable resource.
"Staying close to the GSEs helps us understand what's coming next from a regulatory standpoint so we can equip our lender partners with what they will need in the coming months and years," says Woodhouse. "Our compliance team includes legal, risk and audit experts who collaboratively anticipate and address new challenges, as well as opportunities, for lenders."
Security is another area where strict controls and expertise are essential. Protecting customer and company data should always be a top priority for your technology partner. And while every company may say they safeguard your sensitive data, remember that security tools vary widely from one organization to the next. Bank-level security should be standard across any technology that is used to exchange, process and store data.
Moving forward together
The GSEs' support of appraisal modernization is opening new opportunities for lenders to save time, labor and money while creating exceptional consumer experiences. Navigating those opportunities, as well as their related challenges, takes a strong collaboration between lender and technology partner. Choose a partner with proven experience in desktop, hybrid, and traditional appraisals; expertise in the development and implementation of high-efficiency processes; and a commitment to the continuing excellence of mortgage originations.
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