From the appraiserâ€™s perspective: FNC Inc. and Bill Rayburn, connecting appraisers and lenders--Part twoCharlie Elliott Jr., MAI, SRABill Rayburn, interview, AppraisalPort, FNC, appraisal products
In an attempt to address some of the technological issues
that connect appraisers and lenders, who better to contact than a
leader in the field? This month's column is part two of an
interview with one of our industry's true technological pioneers,
Bill Rayburn, CEO of FNC Inc. In addition to being CEO of the
company he founded, Bill holds a Ph.D. in finance and CFA
(Certified Financial Analysis) and MAI (Member, Appraisal
Institute) designations, three of the most sought-after credentials
in the finance and appraisal industries.
Charlie Elliot: Bill, could you talk to us a bit about
any of your products or systems that connect mortgage lenders to
appraisers? I know from first-hand knowledge that you offer a
system called AppraisalPort. Could you tell me more about it and
some of the success that you have had with it?
Bill Rayburn: FNC pioneered collateral information
management with our flagship product, the Collateral Management
System (CMS). By applying a data-centric model to the traditional
collateral-related services involved in mortgage origination, and
using the Internet to connect lenders and service providers, CMS
changed how the industry does business. CMS automates settlement
service ordering, delivery, tracking, quality control and risk
analysis. And, CMS has been designed to make the most and best use
of data. So, all the information that comes in during loan
originationrelating to the borrower and the property securing the
loancan be collected, reported on and analyzed.
AppraisalPort serves as a secure interface between 13,000-plus
appraisers and approximately 30 large lenders and vendor management
companies using FNC's CMS. AppraisalPort facilitates automated
ordering, tracking and messaging, and delivery of completed reports
from the appraisers straight into our clients' management systems.
We've had tremendous success with AppraisalPort. We've had clients
who've saved hundreds of thousands of dollars in shipping fees
through the automated ordering. We've had clients who've been able
to consolidate, say, 40 appraisal centers down to four. We've saved
appraisers the pain and inefficiency of phone and fax tag, and
allowed them to do their work at all hours from any place with
Internet connectivity. If an appraiser delivers his or her report
through AppraisalPort in our Appraisal Institute-ready format, then
the data that comes in to the lender or management company from the
appraiser automatically populates the correct form, so that saves
even more time because the recipient doesn't have to do any data
entry. The data is all there.
CE: A lot has been said about the importance of
connectivity between mortgage companies and their vendors,
particularly appraisers. Do you have any thoughts on the direction
this connectivity will take in the future and the relative
importance of it to both parties?
BR: I think connectivity between mortgage originators and
their service providers is simply going to be a given as we move
forward. The lender is focused on speed, efficiency and access to
data to mitigate risk and aid in relationship management. The
vendors who can, and are willing to, deliver services and expertise
in a way that integrates with the lender's management system are
going to be the vendors of choice.
CE: A lot has also been said about automated valuation
products. Some are of the opinion that such products may even
replace appraisers in the future. What information and opinion
could you provide on this subject?
BR: Automated Valuation Models (AVMs) are more accurate
and more popular in the market today. They are a valuable tool, but
I don't foresee AVMs replacing appraisers. A statistical model is
never going to outdo a good, honest and professional appraiser.
AVMs are always going to beat out the appraiser on speed, and where
we see lenders using them is where they can get a fast turnaround
and there isn't a whole lot of risk involved, or where the AVMs can
be used to pre-qualify the loan. Right now, as the market is taking
a downturn, lenders are going to be less apt to trust AVMs to
provide accurate data.
There's a big move in the industry now to work to standardize
principles and requirements for AVMs. For AVMs to improve, there
needs to be greater consistency in their management and usage.
Right now is an excellent time for appraisers to be involved in the
formulation of those standard principles and requirements different
industry participants are working to develop.
Appraisers can choose to ignore AVMs, complain about them or
embrace them as an additional product they can offer, but no matter
what appraisers do, AVMs aren't going away. There are some
fantastic opportunities out there for appraisers to influence the
future in regards to AVMs, as well as to use them in
appraiser-enabled, or appraiser-assisted, AVMs for desktop
CE: Does FNC have any new products coming out in the
near future that you are at liberty to disclose? If so, tell us
BR: FNC is working on a product called Digital Loan File
(DLF) that addresses mortgage lenders' shift to a paperless loan
file. Brokers and correspondents using DLF will be able to easily
create files for new applications and submit them electronically to
their lender clients, which will save them money and time. The
lender can configure a document matrix that defines what documents
that product or loan type requires, and then multiple parties can
access that file at one time to work on the loan.
DLF will allow any kind of electrically originated document to
become part of the filefax, e-mail or otherwiseand will allow the
lender to dictate who can access the file, and who can perform
specific actions. Anyone with access to do so can add comments to
the file or a document in the file. So, DLF is an audit trail, a
disaster recovery mechanism and a means to more efficient paperless
CE: As the CEO of a major corporation, I realize that
you walk a fine line between providing an honest and positive
outlook for your company. Would you care to offer a candid opinion
of where FNC will be in five years and whether the type business
you are in will change very much during that time?
BR: At FNC, our goal is to reward risk-taking and
entrepreneurship. As a result, over the next several years, we will
enter new markets that allow us to leverage our existing solutions.
These markets include international expansion in financial
services, as well as entering the insurance and healthcare
CE: Well, that takes care of all of the specific
questions I have. Are there other issues, comments or opinions you
would like to address or offer concerning how FNC connects
appraisers and lenders?
BR: FNC's goal in collateral information management is to
provide tools that make collateral valuation and underwriting
efficient for all parties, lenders, appraisers and other settlement
service providers alike. FNC's AppraisalPort and the use of the
AI-ready format in conjunction with AppraisalPort help level the
playing field. They bring the same efficiencies to one-man shops as
they do large companies. AppraisalPort and the AI-ready format
drive huge productivity gains for lenders, who are able to use
AppraisalPort with FNC's CMS collateral information management
system to automate appraisal ordering, receipt and review.
We appreciate the support of the thousands of appraisers and
other settlement services providers and lender clients who use
FNC's systems and ports. We will continue to work hard to earn
their business in the future.
Charlie Elliott Jr., MAI, SRA is president of ELLIOTT &
Company Appraisers, a national real estate appraisal company. He
can be reached by phone at (800) 854-5889, via e-mail at
firstname.lastname@example.org or through the companys Web site at