First American Mortgage Solutions, a wholly-owned operating division of First American Title Insurance Company, released its initial results from field testing of their new digital valuation process. The early showings affirmed a decrease in valuation turn times without a decline in appraisal quality.
According to a press release dated October 18, the company positively demonstrated a 16 to 20 percent reduction in appraisal turn times while also improving the quality of appraisal work.
The new valuation process is part of the company’s effort to integrate financial technology (fintech) into their underwriting methodologies, with the ultimate goal of streamlining the appraisal process.
Under the existing method of obtaining an appraisal, the buyer and seller must wait for days and even weeks to determine the proper market value of the subject property. That leaves both parties waiting until late into the contract to know if the price is even right. Only then can they resume with the selling/buying process. The current drag on appraisal turn times has potential to cause contract breaches, costly rate lock extensions and sometimes terminated contracts very late into the process.
A digital solution
To help resolve these very common traditional mortgage issues, First American resorts to a technological approach by integrating big data, mobile technology and reconfigured workflows in order to enhance what has long been a labor-intensive appraisal process.
Transitioning to a digital solution is possible when the company utilizes its enterprise-wide assets and technological expertise to connect a mobile workforce with cloud-based technology using data and analytics. The ultimate goal is to drive speed, reduce cost and improve the quality in a move towards digitization.
“Smarter valuations are achievable because of the incredible assets amassed by First American, specifically data, technology and industry expertise. We are continuing to invest in every area of the mortgage continuum where we see an opportunity to lever our assets to improve quality and consumer experience. We have the ability to transform weeks into days, while empowering appraisers to best utilize their talents and skills,” says First American Mortgage Solutions president Kevin Wall.
Smart valuation technology
The company taps into its massive trove of property data and makes use of its proprietary software to assist appraisers in research. It then integrates ACI Sky™ technology to move their back-end quality control process to in-line quality assurance with every step infused with data validation.
First American is one of the few companies who holds the resources to successfully make the move from traditional to digital valuations, which will ultimately have a positive impact on so many real estate transactions. Competition will eventually force those who lack the means to either step out of the game or continue along operating inefficiently, stringing together third party platforms to host and deliver the necessary technical services.
Technological innovations are not limited to the appraisal process. Tech savvy companies are looking to improve other major aspects of the loan approval process, which will result in faster mortgage processing, underwriting and closing. Without a doubt, those who will fail to keep up will die a natural death if they refuse to change with the demands of the era.
Will tech disruption be the evolutionary bottleneck that would determine who would survive or perish in the lending era of the 21st century? Is it the death of small-time, small-town lending?
Technology that depends on data is expensive yet keeping antiquated practices is also costly and out of the question. For now, the industry seems on the verge of a colossal restructuring that will greatly determine who gains or loses market share in the future.Click to See the Latest Mortgage Rates»