HousingWire spoke with Steve Greenfield, Altisource General Manager of Mortgage Real Estate Solutions, about the state of the mortgage market and how Altisource’s HomeVal solution is benefiting lenders.

HousingWire: What are some due diligence and underwriting challenges loan originators face today?

Steve Greenfield: Lenders have always faced certain challenges when meeting necessary due diligence and providing accurate underwriting services. With the pandemic, they can be even more difficult these days. For example, the average amount of time it takes to complete the underwriting process is anywhere from a few days to possibly weeks, depending on how many financial records and documents need to be reviewed and the number of staff on hand.

Add the fact that lenders are not only dealing with a remote workforce these days, which is an operational challenge in itself, they are also facing a major shortage of qualified appraisers, underwriters and other operational staff in certain markets, which could cause even longer closing delays.

If you’re working with several vendors for separate services, it can take even longer as underwriters wait for all the reports and information they need to arrive from various sources. Using more than one vendor can increase the overall cost of the process as well. There’s also more potential risk of mistakes and lack of due diligence as more vendors and people are involved. 

The mortgage market is more volatile than ever due to the pandemic’s impact on interest rates and unemployment as well as federal regulations. Historically low interest rates in 2020 led to an all-time high in mortgage lending for new loans, but with forbearance moratorium deadlines being extended, some lenders are getting nervous. Low rates also led to a massive demand for refinancing, but many lenders are unable to fulfill the requests due to capacity issues.

HW: How can integrating title and valuation data points alleviate those pain points?

SG: It can help close loans with greater speed and ease, reduce vendor oversight, mitigate risk, lower costs and ease underwriting reviews for lenders, servicers and investors. That’s why we offer our HomeVal hybrid solution. It combines the proven services and expertise of Premium Title and Springhouse Valuations to provide a full suite of customizable products focused on the home equity lines of credit (HELOC) market.

Now, more than ever, the mortgage and real estate industries require efficient, cost-effective and reliable due diligence solutions. HomeVal delivers those solutions with precise title search, valuation data and current property photographs from one convenient source in a single detailed report.

HW: As housing supply continues to tighten, what does the future hold for HELOC loans?

SG: With equity currently at an all-time high and lower interest rates allowing homeowners to take advantage of increasing property values, HELOCs are expected to rise this year. According to the Altisource 2021 “State of the Originations Industry” Report we released recently, 20% of the professionals surveyed said they see offering new loan products like HELOCs as the most important factor when growing their businesses.

It’s easy to see why. HELOCs provide flexible access to home equity and closing costs are typically only 2% to 5%, so it’s much cheaper than a refinance. Also, the limited number of homes for sale currently could mean home values remain high, which will increase equity for most homeowners.

Keep in mind that it’s important to work with a service provider that understands HELOCs as well as all other types of residential loans. Altisource does. Altisource’s expertise and proven experience enable us to offer economical due diligence solutions for HELOC lenders, servicers and investors.

HW: What can lenders do to prepare for that future?

SG: Streamline by combining services. Why use several vendors for title searches, appraisals and underwriting when you can use one source to not only help reduce the time it takes to close a loan but also mitigate potential risks, ensure better accuracy and save on overall costs? Altisource and HomeVal are here to help do that.

HomeVal provides one convenient integrated report with a precise title search, valuation data, an accurate description of the subject property showing any judgements or liens, a quick view if the property has sufficient equity to proceed with a HELOC line of credit and recent photos of the property to ensure it’s in good condition to offer a line of credit.

Using one vendor that offers customizable products to suit your specific needs helps provide the information you need quicker and more efficiently. One vendor also reduces the need for time-consuming vendor oversight. We also offer cost-effective bulk ordering and fulfillment capabilities so HomeVal can supply the information you need no matter what size property portfolio you have.

To find out how HomeVal and Altisource can help you stay ahead of changing industry demands, visit us here.

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