With the abundance of home valuation data that has emerged, service providers are focusing on how to better analyze the information and provide more accurate estimations of property values while addressing increased scrutiny and regulations. Several appraisal executives talked at a convention last week about how their new offerings do just that.
“In the last five years,” points out Phil Huff, chief executive officer of Platinum Data Solutions, “greater scrutiny and demands have gone into appraisals. And appraisals have become more reliant on data. And as the amount of information available gets larger every day, we’re seeing more data analysis.”
But data, itself, has little value, he maintains.
Huff was just one of several executives from valuation technology firms interviewed by Mortgage Daily at the Mortgage Bankers Association’s Annual Convention and Expo last week in Chicago that are updating existing valuation programs or introducing new services to meet new data-driven demands for obtaining more accurate appraisals, and doing it faster.
“We help turn data into meaningful information,” Huff says. “It’s no longer just data, it’s information that can be acted on.”
To help lenders and investors data that is meaningful for them, Aliso Viejo, Calif.-based Platinum Data launched DataMapper at the MBA event, a custom data aggregation and business intelligence module that functions within RealView, its data appraisal verification technology. Users of RealView can select through DataMapper whatever data they want or need, and not all of it is from public records, Huff explains.
RealView users now can get risk scores to help determine potential fraud, view appraiser performance, see the amount of time properties have been on the market, comply with Dodd-Frank Wall Street Reform and Consumer Protection Act and other regulations, make more effective use of personnel and reduce the time it takes to complete appraisals, he says. And it is all done on one online platform.
Data also is the foundation of Veros Real Estate Solutions’ property valuation forecasts.
Valuations can change month-to-month, notes David Rasmussen, senior vice president operations, at Santa Ana, Calif.-based Veros, which has developed predictive technology for property valuations. Its latest VeroForecast real estate market forecast, which covers individually almost 13,000 zip codes with properties broken down into three levels of property types, shows that the housing market’s gradual recovery on a national level has picked up measurable speed. Users, he says, include lenders, servicers, small investors and appraisers who can zero in on specific geographical areas.
Veros’ other products, he says, include a collateral integrity analysis product for pre-funding and post-closing audits that utilizes the latest technology to analyze, detect and accurately identify high-risk transactions while minimizing costly false positives, Rasmussen explains.
“We want to put more tools in front of everyone, including appraisers,” Rasmussen explains. “Some appraisers use forecasting. Our tools also provide valuation guidance.”
One of those tools Veros is now making available to its lenders, appraisers and other clients is, says Rasmussen, ComplianceTRACK, a program of AVMetrics, that provides analysis and validation of automated valuation models using the documented due diligence, user reporting and validation guidance and requirements issued by regulatory agencies during the past two years without them bearing prohibitive additional expense. Veros announced that it will deliver ComplianceTRACK just days prior to the MBA.
Appraisal technology provider Ponte Vedra Beach, Fla.-based InHouse Inc. introduced at the MBA Convention its PayPrompt appraiser payment service for inclusion in its appraisal management platform, InHouse Connexions, which handles payments from borrowers and disbursements to appraisers.
“PayPrompt, which we have piloted for the past six months, is now available to all Connexions users,” says InHouse CEO Jennifer Creech. “It eliminates the time-consuming process of handling payments,” she explains, freeing lenders to focus on obtaining and reviewing appraisals.
Obtaining an appraisal can take as little as two days when the market is not busy, explains Creech, but today is more likely to take six to 14 days, making InHouse’s Connexions product valuable for managing the appraisal process.
Connexions rates appraisers, looks at a property’s condition, and accesses Uniform Collateral Data Portal, focusing on good appraisals and eliminating bad appraisals, explains Creech.
Appraisals haven’t received any attention from regulators for a while, but they are certain to soon look at whether lenders have been properly valuing collateral, predicts Mark Linne, chief strategic and valuations officer at Bradford Technologies.
“We see a lot of growth there,” Linne says.
San Jose, Calif.-based Bradford, which provides appraisal solutions through its Collateral Valuation Reports, CompCruncher’s property value analysis and other appraisal technologies, announced that it was implementing a plan to transform the appraisal industry by using regression analysis to help appraisers accurately determine the value of real estate collateral for mortgage origination and no longer rely on subjective estimates.
“It’s not the cost of an appraisal that is important,” Linne declares, “it’s the cost of a wrong decision that’s important.”
Thus Bradford Technologies’ products and services helps appraisers understand how the value of one property changes when certain variables change and when other variables remain steady, he points out.
Lenders often don’t trust appraisers, Linne admits, but Bradford’s new technologies give lenders reason to trust the appraisals that are produced by appraisers who are now using those technologies because their appraisals can be statistically supported.
“We already have trained 2,600 appraisers,” Linne says, referring to those who have learned to perform regression analysis in their local markets, using both on-site and online live instruction classes.
Bradford’s analytics, he says, provide more information to appraisers than they currently have access to, relying too heavily on multiple listing service data that they can easily “grab.” Bradford, he explains, additionally utilizes sales comparables, aerial imagery, building permit information and flood and mapping data as well as other data sources. Appraisers, when doing an appraisal of a specific home, even can pull up images of neighboring homes, Linne points out.
“We want appraisers to think about what data means,” he says. “It’s really the totality of all that data that’s important for determining value. But it would take appraisers a lot of time and a lot of costs to get that data.”
A large Hawaiian bank even uses Bradford’s analytics technology to simply decide whether it should proceed with a loan request, he points out.
Appraisers also have been over-reliant on traditional appraisal forms, Linne maintains.
“Let’s create a new form using good analytics and give those tools to appraisers,” he says. “The old forms will be a thing of the past.“
