Title and appraisal hybrid products used in the home equity market also could be used selectively in the first-lien mortgage market if tests by Assurant Inc. go well.

The hybrid appraisals may be done on a desktop basis by the appraiser and supported by drawings of the structure by a neutral third-party expert such as a real estate professional that is not a party to the transaction.

"We're doing some experimentation specific to certain markets and certain usages," said Dan Hoppes, senior vice president at Assurant Mortgage Solutions, when asked if the products would be rolled out more broadly.

Client interest is driving the experimentation, which could help with appraiser shortages in hot markets, he said.

Assurant testing title/appraisal hybrids

First-lien lenders may find that hybrid appraisals may have limited use and may not be applicable in situations where, for example, a property is very unique and requires an on-site appraisal.

The hybrid title product offers by Assurant subsidiary American Title Inc. consists of a more in-depth title search.

One title hybrid mortgage insurer Radian experimented with in the early 2000s was controversial because it muddled the line between title insurance and mortgage insurance. But other title hybrids are used commonly in the home equity space, Hoppes noted.

There "have been many alternative products utilized in the home equity market for over a decade" that could be applied selectively in the first-lien market, he said.

The title and appraisal innovations at Assurant are part of a series of changes and enhancements Assurant is testing in those product lines.

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