Industry leaders gathered recently at the 13th annual CBA LIVE for three days of discussion on challenges, trends and innovations impacting home equity lending. With home values continuing to skyrocket, modernization continues to be key in gaining market share.
Below we highlight three important takeaways from this year’s conference that we expect to make an impact on the real estate and home equity lending industry in 2022.
1. Embrace appraisal modernization to gain a competitive advantage.
Tech-savvy lenders have implemented appraisal modernization for compliant, consistent, and efficient appraisal processes and on-demand, transparent technology.
Lenders leveraging desktop and hybrid appraisals are experiencing cost savings and faster turn-times compared to traditional appraisals, resulting in a better borrower experience. And with the FHFA’s recent endorsement of desktop appraisals, along with advancements in valuation tech such as automated floor plans and digital GLA calculation, lenders have multiple tools available to help keep up with demand.
Automated Valuation Models (AVMs) is another solution lenders continue to find handy in the valuation toolbox to quickly and effectively conduct home valuations on a large scale. It is estimated that 50% of home valuations are calculated using an AVM and this number is expected to rise within the next year.
Calculating real estate values using an AVM combined with Property Condition Reports delivers a cost-effective, regulatory compliant valuation and allows lenders to process more valuations at faster turn times. And with new developments in machine learning and property digitization, the accuracy of AVMs have dramatically improved making them a preferred first step in valuation cascades.
Bias, in all forms of valuation including AVM’s, was of particular focus for lenders during the conference. We expect to see more commentary and oversight released by the CFPB and federal regulators on the subject of bias in the home valuation process. It is our opinion that tech-savvy lenders leveraging Desktops and AVMs, with safeguards and compliance checks in place, will continue to offer fair, fast, and accurate valuations.
2. The emerging “instant title” trend is getting a lot of buzz.
It’s no secret that many consumers view the title process to be slow, outdated, and overpriced, resulting in frustration. So, it’s no surprise that instant title was among one of the most talked about topics during CBA LIVE.
However, not all that glitters is gold when looking to achieve an optimal title experience for consumers. There are a significant number of factors at play impacting time-to-close – all with their own associated risk. If instant title solutions focus solely on time savings, rather than quality and accuracy of the title information, title search and clearance process, both the consumer and the lender are exposed to undesired risks.
We believe that a better, more innovative approach to the title process will involve cascading title solutions, backed by comprehensive title data and established rule sets. Cascading title technology is on the horizon for Accurate Group, and we appreciated the opportunity during CBA LIVE to collect input from attendees on our efforts in this area.
3. Consumer experience makes or breaks lender success.
Delivering the best consumer experience is one of the biggest differentiators in lender success. Shrinking housing inventory, still relatively low interest rates and the demand for digital mortgage technology solutions among consumers continue to challenge lenders.
To retain and grow market share, lenders must stay focused on consumer needs and evolve business operations and technology infrastructure to meet growing demands. As a result of our emphasis on customer service, Accurate Group was able to help lenders thrive over the past year – enabling them to achieve greater business agility and equipping them with the technology infrastructure needed to keep up with the pace of change.
We helped hundreds of lenders navigate industry dynamics through market-leading property valuations and desktop appraisals, a nationwide network of appraisers and inspectors, cascading appraisal solutions ranging from AVMs to traditional appraisals, and a wide range of title products and remote closing solutions. We look forward to continuing to help lenders achieve strategic advantage by digitizing the entire mortgage process.
A lot of transformation is underway in the mortgage industry, and we expect themes discussed during CBA LIVE 2022 to continue to be a focus for lenders looking for ways to differentiate and gain market share.
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