The need for digital solutions has never been more immediate, as the mortgage industry grapples with not being able to perform tasks that have typically required in-person work.
Appraisals are one of those areas that have required contact. Even with bifurcated appraisals, real estate agents who are not parties to the transactions still need to enter homes to gather data and images and make notes about property conditions.
But in response to the Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac’s temporary approval of alternative appraisal products that reduce the frequency of in-person interaction to mitigate the spread of COVID-19, Clear Capital has rolled out a new tool that allows homeowners to provide much of this data, without requiring any face-to-face contact.
The tool, OwnerInsight, was developed for lenders, appraisers and appraisal management companies. It’s available for free at GetOwnerInsight.com.
Duane Andrews, CEO and Co-Founder of Clear Capital, told Mortgage Media the solution had already been in the works when COVID hit. He said he called the four largest lenders and Fannie Mae and Freddie Mac and received favorable feedback.
“They all thought it made a lot of sense to give the appraiser more information so they could do a social distancing safe valuation report within the comfort of their home and the safety of their home,” Andrews said.
To protect against fraud, along with having the homeowner attest to the accuracy of their information, the program also relies on metadata, which saves a timestamp and geocoordinates for the images. That gives a high degree of certainty that the images were current and from the subject property.
“The lenders love it. They think there’s even more fraud protection in this system than what was done previously, because the metadata was never scrutinized in such a way in the past,” Andrews said.
Instead of just building the service for their own use, Clear Capital decided to make it available for free and to all who could use it. “During this crisis time, everybody needs this kind of technology, and we have it readily available,” Andrews said. “And once we’ve built it, the incremental cost is next to nothing. Why not make it available to everybody?”
Its biggest expense will be staffing a help center support, he said, to help homeowners who have questions about how to use the service.
“During the COVID-19 health situation, OwnerInsight provides critical efficiencies for lenders and appraisers to access information that is indispensable to the appraisal process,” said Jeff Allen, Executive Vice President of Valuation Strategy at Clear Capital, in their rollout statement. “Without OwnerInsight on the market, homeowners and appraisers would face a manual and confusing back-and-forth, trapped in email and phone calls with unclear requirements and no fraud mitigation. We want to ensure the industry remains active and capital remains fluid during these difficult times.”
OwnerInsight is already available to lenders who are on the Ellie Mae platform via Encompass Partner Connect.
Parvesh Sahi, Ellie Mae’s Senior Vice President of Business Development, said solutions like Clear Capital’s will provide longer-term benefits for how companies will engage borrowers.
“To the extent that people are deploying solutions to solve for COVID today, ultimately they’ll have longer term benefits to lenders and to borrowers. You have a broader toolset for how to engage your borrowers,” he said.
Sahi added that OwnerInsight helps give the ability to meet the lender and the borrower where they need to be met, whether that’s in a stressful environment like the COVID environment, or if that’s in a future state, where people may have restrictions in terms of being able to have appraisers come on board.
“There’s been lots of providers trying to figure out how to solve for some of these alternative products – whether in appraisal space or verifications for asset, income, employment – for closing,” Sahi said. “You see providers trying to think about real time valuations of homes and real time enablement from homeowners to tech providers, providing that opt-in information, like ‘this is my home, these are improvements I’ve made, here are pictures you can share,’ and then those providers can gather that and take that data, whether it’s visual or meta data, to inform their algorithms or outputs.”
Another benefit, Sahi noted, is that Clear Capital has a clear perspective on the back-end requirements from an underwriting standpoint on what the GSEs need. “They’re not just thinking about consumer behavior and what they’re willing to do and not willing to do. They’re marrying the two together. They’re thinking about GSE requirements, underwriting requirements … even beyond mortgage, they think about insurance providers and things like that. When you’re able to marry those together, you have something better.”