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Compliant, Integrated Valuation Tools Key to the Industry

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Technology is building new bridges between traditional appraisals, automated valuations, sensitive property data and housing market analytics. Federal regulation adds to the mix the development of regulatory-compliant appraisal solutions for banks and third-party service providers.

“Compliance and technology continue to be” key for the mortgage industry,” says Dean Huynh, vice president of appraisal services at Property Sciences.

It means lenders and servicers need additional tools or compatible software options they can easily integrate into existing systems.

“IT development teams are constantly working,” says Ralph Sells, CEO of eMortgage Logic LLC, Fort Worth, Texas. “Nobody can afford to take a break when it comes to technology and software development.” Not only what the market demands from vendors is “original valuation management systems.”

The vast majority of property valuation systems are based on national, multiple listing service data that are at the core of appraisals and broker price opinion reports, which is why tools that integrate these datasets into valuation management platforms used by lenders and servicers are crucial to the mortgage industry, says Sells, whose residential real estate property valuations and data analytics company has access to a nationwide network of 20,000 appraisers.

Driven by necessity appraisers and real estate brokers are more and more interested in automating data gathering and storage. Technology “acts as a data validation source,” he says, because users need to be reassured they have access to “the most current and accurate information available.”

At the Mortgage Bankers Association’s National Mortgage Servicing Conference in Orlando, Fla., eMortgage Logic, whose product menu includes broker price opinions, automated valuation models and traditional residential property appraisals, introduced an additional feature to its existing valuation management platform. It has integrated into the platform national multiple listing service data.

The goal, executives said, is to help improve information quality control and processing speed. Users can remotely input information gathered in the field, have it automatically stored and readily accessible online at any time. In line with growing demand for data analytics eMortgage Logic has also developed a comparable property scoring tool “that analyzes hundreds of fields of data” that enables users to compare a chosen property with any other properties. Users interested in analyzing “a specific neighborhood, a region, a portfolio, or even the entire nation” have the ability to get customized analytical solutions, Sells says.

Financial markets have changed drastically, he adds, nonetheless when it comes to data lenders, servicers, and investors have their priorities straight: They require access to more information, higher frequency of data delivery and reliability. Information is abundant, he says, “The difference is what you do with it. Now people are asking more questions and they expect very specific answers.”

Options that enable lenders, servicers and real estate agents to comply with the Uniform Appraisal Dataset requirements in today’s market while seamlessly connecting various datasets within their existing appraisal management processes have always been in high demand, says George Opelka, senior vice president of ACI, Palm Coast, Fla.

Now the GSEs require all appraisals be supplied in MISMO XML format or as a first-generation PDF. Uniform Appraisal Dataset compliance requirements from Fannie Mae and Freddie Mac that went into effect on Dec. 1, 2011 are just one recent addition.

Responding to that demand ACI is using its Appraisal.com portal to offer a UCDP delivery tool that can be integrated with the sender’s system to execute submissions automatically as part of the normal appraisal acceptance process and deliver GSE compliant appraisal reports.

As real estate valuation service providers expand operations into more states, they have to rely on technology to be able to control additional costs related to state registration fees and other local level regulatory requirements, says Scott Schneider, executive vice president of ValuLink.

The Dallas-based company provides a SaaS, cloud-based appraisal management platform that automates vendor enrollment, order placement, storage, tracking, reviews and accounting management.

The software can be integrated with major loan origination and servicing systems, smartphone mobile application and includes a UAD Preview engine that allows users to comply with Fannie Mae and Freddie Mac’s new appraisal dataset and full Uniform Collateral Data Profile connectivity. It helps improve process efficiency and eases regulatory requirement pressures, says Jason Bennett, co-owner of Clarity Appraisal Management, which has used the platform to automate valuations and grow appraisal processing by 5,000 additional orders without adding staff.

Quality services, which were a recurring theme at the servicing conference, will never go out of style, says Sells, and vendors need to be able to understand housing values and preserve quality through innovation.