The recent mortgage and housing crisis was in large measure a result of functional breakdowns of the two most important components of our housing finance system: qualification and valuation. For this reason, reforms have focused on these two components and have resulted in significant regulatory changes. Regulation of the appraisal process has been completely overhauled. Appraisal management software can be a major help or hindrance to lenders facing this new regulatory environment.
Among the key areas of focus within already enacted regulations, and within proposed changes still to be finalized, is creation of a comprehensive data record for each appraisal transaction. Every aspect of the transaction, from ordering, to appraiser selection, to appraisal performance, to communication among parties involved is subject to audit and review.
The question for each lender then becomes: Is your appraisal management process up to meeting the higher standards and providing protection from these new risks?
Software as a Service (SaaS) is a method of software distribution in which applications are hosted by a vendor or service provider and made available to customers over a private network or the Internet. Today many applications used by businesses and other organizations, except custom applications that provide unique competitive advantages, are being delivered as web-hosted services via a browser. Within the mortgage industry, SaaS is a very hot topic. SaaS has emerged as a replacement to older systems throughout the mortgage production-chain from Customer Relationship Management (CRM), to Loan Origination Systems (LOS), to appraisal management, to document preparation, to compliance and beyond. Why?
SaaS Advantage 1—Save Money and Shorten Implementation
SaaS applications are offered on a pay-as-you-go, subscription basis. This enables you to avoid the expenses associated with implementing traditional software. There is no need to buy hardware, software, facilities to house them, or to hire people to manage it all. Industry consultants estimate that the cost of implementing traditional enterprise software is four to five times the initial licensing cost.
Many implementation tasks associated with older systems are eliminated because the SaaS is already up and running at the vendor’s data center. This results in a shortened deployment time and a quicker achievement of positive ROI.
Key Takeaway: SaaS Appraisal management software provides cost savings and quicker productivity gains than the older systems or manual processes.
SaaS Advantage 2-Superior Data Management
The architecture of SaaS systems enables levels of customization, feature enhancement, patch deployment and external data interfacing that is vastly superior to older systems or locally installed software. Such capabilities greatly enhance the flexibility, and responsiveness of the system, while also offering superior data integrity, reporting abilities (providing operational visibility), record management and an overall risk reduction.
Key Takeaway: SaaS appraisal management software can easily be customized for a lender’s specific operational needs. Moreover, comprehensive reporting capabilities allow use of pre-set or completely custom designs in real-time without the need for re-programming, thereby dramatically improving responsiveness.
SaaS Advantage 3-Focus Technology Efforts on Competitive Advantages
The business processes within the mortgage industry must produce products that are largely identical to one another, regardless of which industry participants are involved. Consequently, it makes sense to utilize highly specialized, reliable and secure SaaS systems to ensure uniformity and compliance within origination (CRM, LOS, appraisal management, document preparation and compliance), closing, loan sales, securitization and servicing processes. Through the cost-effective use of SaaS software, a mortgage lender can reallocate from its technology budget to focus on those activities that provide unique competitive advantages.
Key Takeaway: SaaS appraisal management software can improve efficiency, effectiveness and compliance, while helping to return management attention to other activities that may yield better competitive advantage.
The adoption of SaaS appraisal management software is increasing at a rapid pace. Lenders of all types are making the change to ensure that their appraisal processes are managed both to eliminate risk and to provide positive operational benefits. These benefits include cost savings, ease of implementation, productivity gains, appraisal operations visibility, customization and reduced oversight.
Is your appraisal management process up to the task?
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