[caption id="attachment_8871" align="alignright" width="333"] Detwiler: There could be more consolidation among AMCs that haven't begun developing technology.[/caption]

The Mortgage Leader spoke with Michael Detwiler, equity partner and CEO of Class Valuation, about the  decision to invest in appraisal technology, the firm’s recent acquisition of Landmark Network, an appraisal management company--and why he predicts more consolidation will occur among appraisal management companies.

Prior to joining Class last month, Detwiler was the head of Accenture Software including the North American mortgage software and outsourcing business He was the co-founder of Mortgage Cadence, a loan origination software company that Accenture acquired.

Q: The Landmark Network is a provider of valuations, with expertise in reverse mortgages. Why do you find that product of interest?

 Reverse mortgages have always been on my mind. Back in 2000, when I was developing a loan-origination system at Mortgage Cadence, I made sure it could support reverse mortgages. Reverse mortgages are personal to me: My grandmother almost lost her house because at the time--there weren’t reverse mortgages like there are today.

There are many borrowers that could use the product for the good of themselves and their lifestyles; I want to support them and develop technology that will make the experience better for them then it has been up to now. There still is a fear with reverse mortgages among consumers, but the product has moved more into the mainstream than it was in the past.

Q: What technology innovations do you plan to unveil?

Class is investing millions of dollars on developing technology to support appraisers and work with investors, government sponsored enterprises and lenders. For instance, during the refi boom, borrowers might have had to wait for the completion of their appraisals. We can make it easier and faster to gain access to the house through a smart lock box. But I’m not going to give away all of our plans.

Q: Why make a bet on technology for the AMC market now?

Investors are keen on appraisers having a prominent role in the market. Our clients are not interested in taking risks without understanding what the risk is. The feedback received from having boots on the ground, gives them a level of confidence because the valuations are objective and collected by impartial third-parties.

Others chose to side step that approach. There was an initiative in which non-appraisers collected data and generated results. The idea is that they are analogous to an appraiser—but the results are not of the same quality or veracity. Technology plus an appraisal partnership is the direction of the market. Ultimately, the market is more interested in block chain for mortgages than in a model without that technology.

Q: Do you think there will be more consolidation among AMCs, due to technology?

Yes, but the consolidation that will occur won’t be solely because of technology. Lenders will choose to work with the AMCs with the strongest financials, leaving the remaining firms to merge or go out of business. But technology will play a role in acquisitions.

AMCs are being forced to evolve their technology, how they use data, and their use of artificial intelligence. That includes scoring models and quality metrics that enable the lender to see the assignment went to the right panel--based on the performance in states, counties and zip codes.

Organizations will require algorithms that look at historical performance, specialization, quality, proximity and more. As more data comes in, the model gets more accurate. That’s a cost of admission today. Those AMCs that haven’t started to develop the technology—it’s too late for them to begin now, which could lead to acquisitions.

 Q: Is the digital mortgage real or just marketing sizzle?

The digital mortgage is real, but the industry has to make a concerted effort to get there and overcome the inertia in the marketplace. Borrowers would like the digital mortgage, but most, around 70 percent, want real or digital hand holding. Borrowers, for instance, are being asked for documents that they can’t provide readily, and they want to have access to someone with whom they can speak.