Game Change

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cover story that affects a property's value. If the issue needs to be reviewed by anyone else or needs to be referred to again, the information and comments are immediately available. That is a superior solution to the old process of writing notes on the inside of a paper loan folder, Hultquist says. "This shortens the entire process; it eliminates a lot of the back and forth [between mortgage stakeholders]," Hultquist said, estimating that DocVelocity shaves several days from the process in most cases, and as much as $20 to $30 in the handling and delivery of documents for each mortgage. Since all information related to the loan, including items like appraiser's and underwriter's notes, are contained in one central repository, DocVelocity also enhances the quality of the loan, according to Hultquist. Capsilon's DocVelocity technology has captured the attention of the market, with revenue doubling between 2011 and 2012 and on track to double again in 2013, Hultquist notes. "We are adding new lenders each month," he said. "The mortgage market is moving to a data-centric risk model in order to identify risks better, which increases loan quality." —Darius Bozorgi, Veros Real Estate Solutions Improving Risk Management P roperty valuation management is still a problem the industry is trying to address, says Darius Bozorgi, president and CEO of Veros Real Estate Solutions in Santa Ana, California. "The mortgage market is moving to a data-centric risk model in order to identify risks better, which increases loan quality," he said. One of the problems in the real estate bust was that there wasn't a standardized way to handle and verify the large amount of freeform information contained in the average appraisal, calling in to question the value of a mortgage, which is a secured instrument. But if the value of the property is questionable, so is the value of the mortgage that secures the 18 | The M Report mortgage application process, Bozorgi adds. "Sapphire is geared to the lender community," Bozorgi said. "It enables them to make sure that they meet the requirements of Fannie Mae and Freddie Mac by allowing them to preview where the GSEs may take exception to the appraisal, specifically where the appraisal is going to hit what the GSEs refer to as a 'hard stop.' It makes sure that they have clean appraisals so that they can keep their pipeline moving and sell the loans. It provides a way to capture and view the information around the appraisal itself." With the incorporation of appraisal scoring technology and additional analytics, Sapphire provides a better handle on the risk of loans it already has on the books. As a result, the technology enables lenders to be more comfortable about using more of their capital to make loans, according to Bozorgi. "Sapphire offers one-stop shopping for valuation management. This is where the market has to go in order to comply with the [Fannie and Freddie] requirements," Bozorgi said. Managing REO property, hence the risk issue, Bozorgi explains. The Uniform Appraisal Dataset (UAD) standardized key elements of the appraisal and introduces quality and condition ratings with prescribed definitions. UAD is part of a larger effort known as the Uniform Mortgage Data Program (UMDP), which also incorporates the Uniform Collateral Data Portal (UCDP), a joint effort between Fannie Mae and Freddie Mac for electronic submission of data files to the GSEs. Veros is the technology provider for UCDP. For lenders, Veros' Sapphire valuation management platform enables lenders to manage their risk by automating the valuation process from appraisal order to GSE submission via UCDP. Sapphire is a Web-based platform available in a series of packaged editions, each offering a range of add-on options. The core platform includes comprehensive order, review, reporting, and administration functions and can be enhanced through the addition of modules that enable clients to select a feature set tailored to their specific business model. By using Web-based submissions, Sapphire also eliminates the problem of faded or unreadable faxes of appraisal information that have led to information being misread or data needing to be re-entered one or more times in order to complete the R eal estate brokers are still trying to work to get REO properties back into the market. Though there are economic issues as well, one of the difficulties in moving REO is the ability to have a one-stop solution for all pertinent data about each property, including important contact information. Different real estate participants typically used different, sometimes competing, software solutions, meaning time wasted with double and triple entry of information, which leads to delays and inaccuracies (e.g., transposed figures). "Once you start mixing and matching different technologies, you start increasing the learning curve; we wanted something that was very user friendly,"

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