Collateral Vision - Lead Stories

Making Sense of the Changing Landscape of Valuation: Appraisers and Data Standards

Mark Linné — Fri, 12 Oct 2007 05:00:00 GMT

The following article is an excerpt based on a presentation made by the author at the AppraisalPort Conference in Washington, D.C. in August 2007.

Change has defined the status quo for virtually all business and organizational structures in recent years, and the real estate and appraisal industry are the focal points for changes that are ongoing within the financial services and informational service sectors of the economy. The valuation segment of real estate is the...

Life of Loan Collateral Transparency

Bill Rayburn — Mon, 16 Jul 2007 05:00:00 GMT

The crisis in the subprime mortgage market has grabbed headlines for months now, and for good reason. Some subprime lenders have closed their doors for good, while others have adversely affected the profits of their parents, some of the biggest companies in the world. Capital markets investors are still holding their breath, waiting to see how far the ripples reach.

How could this happen? First, let’s examine some of the problems in subprime lending that are latent in the system,...

Driving Toward the Collateral Score

Bob Dorsey — Wed, 13 Dec 2006 06:00:00 GMT

For years, many in the mortgage industry have yearned to create a score for property that would function like the credit score on the borrower. A robust collateral score has obvious benefits: lenders would be able to order the borrower’s credit score and the property’s collateral score at application. Then, based on the institution’s internal risk rules, lenders could perhaps make a loan on the spot.

Unfortunately, attempts to create a collateral score have fallen short and the...

Collateral Vision Gives You 20/20:
Two Numbers Make a LoanCredit and Collateral

Sun, 01 Oct 2006 05:00:00 GMT

At the end of the biggest mortgage boom in history, the lending environment has shifted precipitously.

For years, lenders could downplay the importance of the quality of the collateral securing their mortgages and still succeed in the boom, protected from big fraud or default losses by the sheer quantity of originations.

Post-boom, success depends on lenders switching their focus from quantity to the quality of the collateral backing the loan. Collateral, the oft-ignored...

AVMs in a Declining Market: What’s Next?

Wed, 20 Sep 2006 05:00:00 GMT

AVMs are here for the duration. How will today’s market affect their progression?

As rates rise and origination and refinance volumes level off, the jury is out on how the decline affects use of automated valuation models. On one hand, AVMs are faster and less expensive than traditional appraisals. This factor may drive cost-cutting lenders toward desktop appraisals and AVMs.

On the other hand, some have expressed fear that during the downward market, AVMs are more likely...

Data Extraction vs. Imaging: Bolder Steps and U.S. Operations

Mon, 15 Aug 2005 05:00:00 GMT

Imaging solutions are easy to find in the mortgage market today, and represent a dramatic step toward the end goal of a paperless mortgage.

Imaging has proved its mettle, clearing out countless file cabinets and streamlining back-office banking procedures in general. Multiple users, even in far-flung locales, now have access to any given document without physically reproducing the paper copy. It’s one factor among many that has brought about a seismic shift in the way mortgages...

The Appraiser Front: New appraisal forms

Mon, 30 May 2005 05:00:00 GMT

Fannie Mae’s set of new appraisal forms, long awaited, are set for mandatory use on November 1. Staff and fee appraisers are giving them the thumbs up.

After issuing new test appraisal and appraisal review forms in June 2004, receiving feedback from hundreds of appraisers, lenders and organizations, and then returning to the drawing board for revision, Fannie Mae announced on March 24, 2005 that it has issued the final versions of 11 new appraisal forms. Nine of the forms are...

Residential Real Estate Russian Roulette?

Fri, 20 May 2005 05:00:00 GMT

More boom markets and an increase in subprime, ARM, and interest-only loans makes for potentially worrisome times for lenders.

The beginning of May 2005 saw FDIC economists Cynthia Angell and Norman Williams updating and expanding a study on boom housing markets across the U.S., initially released in February, with analysis of more recent data. The February FDIC study emphasized local market factors for historical boom and bust cycles, and indicated recent past experience signals...

Operation Fraud Arrest

Sun, 15 May 2005 05:00:00 GMT

Preparing your staff to identify collateral red flags may be the best anti-fraud investment you can make.

The mortgage boom has peaked, rates are rising, and lenders are looking at ways to reduce costs and realign operations in concert with the new climate. On the heels of the refinance boom has come a startling increase in the incidence of mortgage fraud. We included some of the statistics in our last issue of the Collateral Vision. Reports from the MBA Technology Conference tell...

What Lenders Are Looking for in Appraisers

Tue, 15 Mar 2005 05:00:00 GMT

When lenders and appraisers are looking to connect, what are the rules of engagement?

It’s a matter of concern for appraisers this year, more so than during recent years, to be on the approved list with lender clients. Whereas during the past two or three years volume was keeping appraisers too busy to think about taking a vacation, now the market is beginning its slow but inevitable downswing. One appraiser interviewed this year said that if, as an appraiser, you weren’t facing 2005...