We spent three amazing days at this year’s CBA LIVE in Las Vegas discussing “What’s NEXT” in challenges, trends and innovations impacting home equity lending.
Two of the most complex issues examined during the conference facing home equity lenders today are appraisal bias and fraud protection.
Helping to Mitigate Appraisal Bias
Concerns of how to appropriately combat appraisal bias are growing among mortgage and home equity lenders – especially in the wake of the recent PAVE Action plan that outlines a series of industry regulations to ensure discrimination does not happen during the appraisal process.
Many attendees stopped by Accurate Group’s booth after Michele Golden’s CBA LIVE 2023 panel “Keeping Appraised on Appraisals”, to learn more about tools to help mitigate appraisal bias.
There are quite a few effective products in mitigating appraisal bias available on the market today and those we see most frequently utilized by mortgage and home equity lenders are Automated Valuation Models (AVMs), Property Condition Reports, and leveraging desktop and hybrid appraisals.
Another available option includes GroundWorks™, our mobile property data collection technology that allows appraisers to conduct evaluations on raw data with little-to-no subjective information to pull from – minimizing the potential for bias. The app leverages automated data mining and algorithms that fact-check against comparable properties to conduct an entire home valuation without an appraiser ever stepping foot on the property or interacting with a homeowner. Borrowers are at ease knowing they are treated fairly, and lenders and appraisers benefit from lower risk and higher standards of compliance.
While lenders consider the many options available to help mitigate appraisal bias, they should also consider a platform to streamline the entire appraisal management process to increase efficiencies, improve profitability and gain the strategic advantage over the competition.
Mortgage Wire Fraud is Growing – and Consumers are Concerned
Days before the conference, CBA released the results of a national survey that explores how Americans value banking services and innovation. The study found that “an overwhelming majority – 8 in 10 Americans (83%) – believe banks are doing a good job helping them avoid scams. Americans view scam prevention tools to keep their accounts secure and convenience-oriented offerings as extremely or very important, and mobile banking innovation tops the charts at 80% of poll respondents considering it to be the most important.”
It’s no surprise that consumer, bank and wire fraud rank as top concerns – simply search “mortgage wire fraud” and a handful of news articles surface about the latest victims of these scams. Mortgage wire scams typically start with hacking and phishing – scammers posing as title companies tricking even the most educated and tech-savvy buyers into wiring money into fraudulent accounts.
Secure IT infrastructure backed by digital mortgage technology with closing and title capabilities are essential to mitigating the risk of fraud. eSigning and remote-only notarization (RON) technologies are best known for streamlining closing and delivering a better borrower experience.
RON and e-closing technologies also enable lenders and title companies to provide documentation to borrowers more quickly, in compliance with Consumer Financial Protection Bureau (CFPB) regulations and allows borrowers to review and sign real estate closing documents in a safe, secure and auditable environment. Title companies can communicate the exact steps the consumer should expect upon closing and proactively educate consumers about phishing and fraud to help prevent issues.
What’s NEXT?
CBA LIVE, as always, was a very educational experience. Attendees gained insights on how to remain competitive and achieve growth despite the erratic economy, high interest rates and low housing inventory.
We expect the value of digital mortgage platforms and appraisal management technology to continue to help mitigate the risk of bias or fraud in real estate lending processes while giving lenders the ability to remain competitive and deliver best-in-class customer service in today’s market.
Accurate Group has many dynamic products to support lender initiatives, such as mitigating appraisal bias and fraud prevention. To learn how our innovative valuation technology can help mitigate appraisal bias or to discover how our digital mortgage support technologies, such as Accurate Group’s eSign & NotaryWorks™ solution, can pave the path to faster loan closings and happier borrowers, contact us today.
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