MARKHAM, Ontario-Thanks in part to the Home Valuation Code of Conduct's implementation, Solidifi here said it has found certain property valuation and collateral risk management services that fared well in Canada have growing appeal for U.S. lenders, and it plans to continue the cross-border transfer of ideas going forward.
For example, the company has plans to extend to U.S. mortgage lenders and property and casualty firms a service it rolled out recently in Canada that will allow clients to go beyond traditional appraisal reviews and incorporate structural deficiency concerns into collateral assessments, president Jason Smith told ON. The service aims to show, for example, whether a structure on a property includes relatively more fire-prone "knob and tube" wiring. U.S. demand for this rollout, expected to be a relatively small part of the company's range of offerings, remains to be seen. But it is representative of a general trend in efforts by the company to more exactly pin down home values for its customers.
This has been a key strategic need for U.S. lenders, whose efforts to obtain accurate and timely appraisals have been complicated of late in many cases by infrequent and/or distressed home sales, as well as the May implementation of the new appraisal code for agency loans.
In a "normal" market, it took about three to five days to turn around an appraisal, but recently four-to-six or five-to-seven day turn times have been "more realistic," Ben Niles, manager at the New Hampshire-based Merrimack Mortgage Co., a Solidifi customer, told ON. He said Solidifi helps mitigate appraisal concerns by allowing customers to become HVCC compliant and pay appraisers their full fees without using appraisal management companies.
Some see the savings and HVCC compliance AMCs arguably offer as attractive. But experienced appraisers who have seen their fees reduced by them say that AMCs can result in less accurate appraisals done by less experienced appraisers who may not be close to or familiar with the areas the properties they value are in. Within the latter argument lies Solidifi's appeal. "We call ourselves the pioneer of the full-fee model in the U.S.," Loren Cooke, Solidifi's EVP of sales and marketing, told ON.
Mr. Niles said he also likes Solidifi because it allows underwriters to directly question appraisers by phone rather than filtering inquiries through a "middleman" as AMCs do, and because it automatically assigns loans to a large group of the company's appraisers using customized criteria such as turn time and proximity.
In addition to offering help with HVCC compliance through Solidifi Values, the company has extended its collateral risk scorecard, Solidifi Insight, into Solidifi Decisions, a collateral-based origination system/underwriting platform. The platform is aimed at allowing lenders and mortgage insurers to manage their respective collateral policies and can be used to handle functions ranging from portfolio management to collections and recovery. Besides assessing risk through its collateral risk scorecard, the platform was designed to allows customers to define and manage business rules, manage underwriting guidelines, manage adherence to risk guidelines and compliance, provide efficiency through workflow technology, and objectively manage appraiser compliance through Solidifi IQ.