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Modernizing Valuations and the AMC Model: How Tech is Helping Lenders Win

Record-breaking mortgage activity in 2020 magnified process inefficiencies for many lenders as they struggled to keep pace with the demand surge created by historic-low rates; and even with the market cooling a bit in recent months, it’s still keeping them on their toes.

Matthew Woodhouse, Managing Director, Valuations, at ServiceLinkFor many, 2020’s intense market activity was the catalyst to adopting and embracing technology and automation that may have been put on the back burner during more predictable periods. One way lenders have been creating efficiencies in their valuations model is to lean on Appraisal Management Companies (AMCs) to take away administrative burdens, bringing greater peace of mind from a regulatory standpoint while creating more transparency through technology and reporting.

Through the course of my career, I’ve had the opportunity to work alongside lenders of all sizes and have witnessed, firsthand, the benefit of the AMC model on their businesses. As the industry continues to set its sights on modernization and automation, and lenders brace for more busy months ahead, there is no better time than now to make the switch to the AMC model.

Why make the switch?

Research conducted by Javelin Strategy & Research, at the request of ServiceLink, has revealed that consumer’s confidence wanes the closer they get to the closing table. This is due, in part, to the lack of transparency and visibility into key milestones in the homebuying process, including the appraisal. In fact, 20% of consumers report low confidence leading up to the appraisal due to lack of details like an appraiser’s photo, the type of car they will drive to the inspection or the name of the appraisal company itself.

In addition, nearly 67% report waiting for the appraiser to arrive within an hourslong window, further increasing their frustration. With consumer habits changing rapidly, lenders that do not make efforts to automate and digitize key milestones in the homebuying process risk being edged out by those that do. Moreover, consumers are increasingly willing to take a self-serve approach to certain aspects of the homebuying process, which further illustrates the opportunity for lenders to embrace technology to create further efficiencies for themselves and their borrowers.

Working with an AMC makes it possible for lenders to increase automation and technology within the valuations process, without taking on sizable “tech debt” themselves. AMCs typically tend to be on the leading edge of technology, making ongoing investments into their own processes and infrastructure to provide the best possible experience for their lender clients; which, in turn, helps them create a better, more transparent experience for the borrower as well.

For example, lenders can benefit from working with an AMC that offers real time, digital scheduling. This technology empowers consumers (or, another approved property contact) to select an exact appointment date and time for their appraisal, versus an hourslong window. They also receive an instant confirmation of the appointment, in addition to helpful information about the appraiser beforehand, further increasing their confidence in the process. This seamless, tech-driven experience adds to the lender’s credibility and increases the likelihood of repeat and referral business.

In addition to an improved borrower experience, lenders also directly benefit from best-in-class security infrastructures and data protection as AMCs undergo regular audits of their facilities, systems, communications and internet protocols. With fraud mitigation being top of mind for lenders, this added layer of security has provided a welcome sense of relief for those that have made the switch to the AMC model.

For lenders that are looking to improve reporting and streamline ordering of valuations services, AMCs also help to make this a reality. AMCs can provide monthly reports and performance summaries that empower lenders to continually evaluate the company’s performance in real time. In addition, having access to individual orders through an online portal or through a dedicated point of contact from the AMC makes it even easier to stay connected to the process.

'Must haves' to keep in mind

When looking to make the switch to the AMC model, conducting research and “interviewing” potential AMCs is a great next step to ensure you’re selecting the right AMC for your company. A few “must haves” to keep in mind when considering an AMC partner include:

  • Deep industry experience and stability
  • The scope and reach necessary to support your strategic plans
  • The agility to keep up with evolving regulations
  • A high-quality appraiser network and reporting

In addition, finding an AMC that is committed to top-notch customer service is, arguably, the most important factor so that you can be rest assured your business is in good hands. As the industry continues to move toward technology and automation, an AMC puts lenders in the best possible position to grow and provide the level of service that today’s consumers expect.

Matthew Woodhouse is managing director, valuations, at ServiceLink, the nation’s premier provider of digital mortgage services to the mortgage and finance industries.

 

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