AVM Providers Seek New Distribution Channels

As lenders move to be more efficient, appraisers and automated valuation model vendors are answering the call. These outfits are aggressively moving to distribute their products more seamlessly and on a national scale to lenders looking to gain efficiencies in their appraisal management processes.

For example, ATM Corp. of America, a provider of settlement solutions to large, national mortgage lenders, has entered into an agreement with IRR-Residential LLC, a national residential appraisal organization, that entails that IRR will use ATM's Vision 4 technology to accept, distribute and manage appraisal orders nationwide. For ATM, IRR's decision will make IRR the first organization of independently owned and managed residential appraisal offices to take advantage of the automation that its technology delivers.

Specifically, with this engagement, ATM opens a new market for its services as it continues to build on the momentum of several large-scale client engagement wins in 2006, including Equifax and Home Connects, a subsidiary of GMAC Residential. Beginning in early 2007, IRR will offer its clients and affiliate members access to the technology through an ASP model to increase its ability to automate the assignment and delivery of property valuations.

Through the use of ATM's appraisal module, IRR will be able to increase the volume of appraisal assignments it can handle, while achieving cost efficiencies. "The idea was to use that technology to target the residential appraisal world," said Jim Gladden, EVP of sales at ATM. "From there, they needed the technology to tie all their appraisal franchises together. So, the solution that they offer a lender will allow them to get that out to the industry and also to process those orders.

"We have significant vendor management experience so it was a good business partnership for us," he added. "They looked for 18 months and eventually signed an agreement with us. IRR will compete in the market with First American, Fidelity and others like that through us. The market angle for them is that instead of having a network of independent fee appraisers, they now have local expertise with national coverage.

"It's a better opportunity for us to get more reach," continued Mr. Gladden. "We've had a number of companies license our technology in addition to having our internal captive services offering. The technology platform has been proven and we saw an opportunity here to move the Vision software into the hands of more users."

In terms of AVM acceptance, Mr. Gladden believes it will continue to gain momentum. "The automated models will continue to gain credibility. However, there is still going to be space for live appraisals because of the secondary market," he reported. "Based on the success of the licensing arrangements we've signed, we've brought on a sales person dedicated only to licensing the software. We're poised to make a name for ourselves in a different space with this deal in 2007.

"Lenders are focusing on improving efficiencies because volume is down. Reducing the cost to originate is a big concern. The need to outsource is going to be a big topic in 2007," he predicted. "Over this past few years lenders are becoming more efficient. They want to be prepared to service the millions of loans that will be resetting next year. Also, a lot of small vendors and lenders have gone away.

"In the end, 2006 was a year where lenders could concentrate on what they need to do better and how they can do it to compete in 2007," concluded Mr. Gladden. "I'm not sure 2006 was a year of implementation, but they've set themselves up for 2007 decisions. Lenders are increasingly moving toward paperless processes through imagining. They've been planning throughout 2006 and 2007 will be the year they execute those plans." (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com