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Compliance Solutions for the Appraisal Management Industry: An Interview With Clint Cornett, CEO of ValuTrac Software Inc.

May 13, 2013

Clint Cornett is chief executive officer and founder of Texas-based ValuTrac Software, Inc., a software solutions provider to the appraisal management and mortgage lending industries. ValuTrac allows appraisal management companies, banks, credit unions, and mortgage lenders to operate more efficiently, enhance customer service, mitigate risk and ensure industry regulatory compliance with the Dodd-Frank Act, Interagency Guidelines, Fannie Mae Appraiser Independence Requirements and FHA Appraisal Requirements. For more information, visit National Mortgage Professional Magazine recently sat down with Clint Cornett to get a progress briefing on ValuTrac. NMP: Clint, thank you for taking the time today to visit National Mortgage Professional offices. Why don’t you start by giving our readers some background on how ValuTrac was founded? Cornett: ValuTrac’s initial product originated as a proprietary appraisal management system utilized by an appraisal firm I founded in Texas in 1999. At that time, we serviced the state of Texas and needed an efficient and compliant way to manage our appraisal workflow. We searched, but could not find a product on the market that met our requirements, so we developed our own proprietary appraisal management system. After years of research and development, primarily conducted through real-time business experiences, we enhanced the system until it was able to meet our everyday appraisal management needs. In late 2008, one of the appraisal firm’s customers approached us about implementing our appraisal management system nationwide to be used by all their branch offices. We packaged the system and customized a version to meet their specific business requirements. Upon completion of the implementation we recognized that a meaningful opportunity existed–the market desperately needed a fully customizable appraisal management system. NMP: Was your core product developed in-house? Cornett: All of our products are developed in-house and our development team has extensive experience in designing technology for the appraisal and mortgage lending industry. I originally provided the vision and leadership for the company’s products, along with our chief technology officer, who plays an integral role in the architecture of the platform. NMP: What is the breadth of ValuTrac’s product offerings? Cornett: Our software serves as a service (SaaS) appraisal management solution and provides our customers a compliant, easy-to-use appraisal management platform. ValuTrac Software has two primary appraisal management products, and two ancillary products, including ValuTracPro, ValuTracPro Plus and SnapShot. NMP: What is your company’s current client makeup? Cornett: We have a very diverse client base from nationwide to regional appraisal management companies, community banks, and large nationwide mortgage lenders. Our products appeal to all market segments within the mortgage lending industry. NMP: How many clients are you working with today and what type of growth are you experiencing? Cornett: In the past year, we have begun to establish a leadership position in the appraisal management technology space, doubling our customer base (appraisal management companies [AMCs], banks, credit unions, and mortgage lenders) to well over 100 and increased transactions by 200 percent. Today, through our customer base, over 3,000 businesses are relying on ValuTrac for appraisal management. In 2013, we are on track to double our customer base again. NMP: What exactly is driving your growth? Cornett: As I mentioned earlier, the mortgage lending industry desperately needed a fully customizable appraisal management system. Our targeted customer base is adopting our solutions due to the continued investments we are making into the functionality and features of ValuTracPro and ValuTracPro Plus, as well as our fully-customizable residential and commercial appraisal management platforms. NMP: Can you walk us through your business model? Cornett: Our model provides its customers the ability to implement a custom appraisal management software solution across their organization with minimal upfront investment, thus minimizing risk. This is a result of low setup costs, no long-term contracts, no maintenance or renewal fees, and a pay-as-you-go pricing model. Our pricing model is transaction-based. The customer pays for only the service they use, with no burden of a monthly minimum cost, and no annual maintenance fees. NMP: What differentiates ValuTrac from the competition? Cornett: We offer a unique consultant approach and the ability to help with overall process design and implementation, system applications and integration. Our solutions help to mitigate risk and enhance the cost structure related to the appraisal process and significantly improve accounting processes, appraiser vendor management, regulatory guidance, and sales support for all of our clients. We also offer both residential and commercial appraisal management. ValuTrac was built by former lending and AMC executives, experienced in the demands required to efficiently manage the entire appraisal workflow–not just a piece of it. NMP: How does the company invest in R&D? Cornett: Through extensive R&D, we evaluate the existing functionality of the technology, and collaborate in-house on the functionality and features that would enhance the user experience. To prioritize system enhancements for all of our customers, a dedicated team of software engineers are regularly collaborating with the sales team, account managers and executives. In addition, ValuTrac is always listening to customer feedback to enhance the software system and will continue to make system-wide enhancements to further simplify the appraisal management process for its customers, while promoting responsible lending and adhering to compliance regulation. NMP: Has the company added any new product enhancements/features? Cornett: We continue to enhance the functionality and features of our products. We just finalized a partnership with Platinum Data Solutions, a provider of appraisal verification tools and are now able to offer all customers, RealView, a component-based business rules engine that automates and simplifies the appraisal verification process. In addition, key interfaces have been completed with CoreLogic, Lender Processing Services, RealEC, and currently a la mode inc.’s Mercury Network. ValuTrac is also built to be 100 percent compatible with mobile devices, including iPhones, iPads, etc. The ability for ValuTrac to be accessible via any mobile device allows appraisers to provide a higher level of service with quicker responsiveness to their customers’ needs, significantly enhancing communication between ValuTrac customers and their appraiser vendors. We are set to launch a new and improved mobile Web site this year which will optimize usability and allow our customers and appraisers to easily and efficiently access their site on the go. NMP: What do you see on the technology forefront that could positively impact your business and the industry? Cornett: Continued industry regulation and the need for a scalable solution that provides the latest in security and data integrity. In the new mortgage lending environment, companies need a compliant appraisal management solution to minimize business risk. These factors will continue to be the driving forces behind our growth and product development. NMP: How is ValuTrac delivering the highest standards of compliance services in the appraisal management industry? Cornett: Our systems are designed to provide the specific structure around the regulatory requirements set forth in Dodd-Frank, the Interagency Guidelines, along with Appraiser Independence requirements, while allowing the customer to adjust their appraisal workflow and processes as required for their specific business. Our experience in both appraisal management and mortgage lending, coupled with our deep understanding of the regulatory requirements for appraiser independence, gives us a very unique perspective of the appraisal management process. We uniquely understand what banks, credit unions, and mortgage lenders need to operate more efficiently, enhance customer service, mitigate risk and ensure industry regulatory compliance. NMP: What is the state of regulation today and what can lenders anticipate coming in the future? Cornett: Today, lenders continue to face extensive regulation as a result of the mortgage lending crisis. Going forward, lenders will be more scrutinized than ever before for their business processes to meet all of the new regulatory requirements that have been implemented across the industry. Not only are lenders regulated, appraisal management companies working with lenders have to be compliant in their business processes as well and are being regulated by each state–each with their own appraisal management company regulations. NMP: What is the future of the appraisal management industry? Cornett: Regulated appraisal management is here to stay. Companies will continue to need and have to implement compliant appraisal management solutions to minimize risk, while at the same time have a solution in place to simplify business processes, reduce operational expenses, and improve customer service levels.   NMP: What are the top challenges facing the appraisal management industry in 2013 and beyond? Cornett: The top challenge will continue to be regulatory compliance. Lenders will not only have to manage their technology service providers (TSPs), but will need to be more accountable for their TSPs and their business processes. Just because a lender is outsourcing, it does not minimize their responsibility. One of the biggest challenges for the appraisal management industry going forward will be establishing reasonable and customary fees paid to appraisers. The appraisers have been fighting this for years. At some point soon, both lenders and AMCs will have to  adopt what is reasonable and customary for every market across the nation. This could be a daunting task. NMP: What do you like to do in your free time? Cornett: When I do have free time from work, I enjoy working with the athletic booster club at my son’s school, working out, spending time at the lake, attending local sporting events, and just hanging out with my wife of 21 years and my two children.  
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