In wrapping up this series on valuation management, I wanted to review the most important components to be considered when selecting a valuation management platform. The implementation of these systems has given lenders, servicers and investors the ability to effectively coordinate and audit a number of valuation processes. As stated in previous columns, these solutions allow for better control of business operations by providing a deeper level of organization and tracking over the entire loan lifecycle. Below is a recap of the most critical attributes among the core functionality of a platform.
An order module should be an effortless interface for placing single/batch orders and connecting users to valuation providers, and should lend naturally to a number of tangible business benefits. The foremost benefit is provided through needed layers of objectivity by providing the ability to set up rules that fall into place for every order processed. Users are assured that their orders are routed to the most appropriate providers and the necessary steps are taken to eliminate any type of subjectivity that can result in regulatory infraction. The system should also provide business efficiencies and speed of processing by keeping orders from getting lost, mixed up or stuck in the course of fulfillment, and ensures scalability by distributing orders to providers in a management flow.
Quality control (QC) procedures surrounding valuation management are critical for safe and successful lending practices. The most comprehensive QC practice requires a combination of a platform’s pre-defined, automated QC checks, along with a manual review where qualitative assessments are necessary. The platforms can ensure essential compliance standards, including conformance with the Uniform Appraisal Dataset (UAD), known Uniform Collateral Data Portal (UCDP) hard stops and underwriting requirements. A strong platform should remove subjective decisions and protect against human error.
A platform should include a comprehensive selection of standard reports with access to frequently retrieved data. While these reports may fulfill common business objectives, a standard report suite will not encompass every possible combination of data points desired. Ad hoc reporting gives users the ability to configure output by utilizing available data fields to immediately generate a user-created report.
UCDP and UAD compliance
Lenders, specifically those with significant volume, are focused on ensuring they have a defined path to deliver compliant appraisal data to the government-sponsored enterprises (GSEs) via UCDP for the March 19, 2012 deadline. Today’s top platforms provide:
►The ability to convert appraisals in a first-generation PDF format into compliant electronic data;
►The ability to resolve UAD compliance issues and automate exceptions surrounding UCDP review prior to appraisal submission; and
►The ability to track and evaluate appraisers or organizations whose performance or product is lacking.
In closing this article series, I want to emphasize the need for efficiency and quality in making valuation decisions. Organizations that understand the importance of automation have a clear advantage over those that are slow to embrace it. These systems have been tested and proven to provide benefits that are immediate and long-lasting.
Today’s lending, servicing and investment managers are tasked with doing more with fewer resources. They must increase volume, while ensuring that risk oversight and review controls are in place and consistent. It can be a daunting task, but one that can be accomplished through the power of the valuation management platform.
David Rasmussen is senior vice president of operations at Veros Real Estate Solutions. For more information, call (714) 415-6300.