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HARP 2 – What’s In It For The Servicer?

posted by : Yong Kim on November 14, 2011

Lately there has been a lot of buzz around HARP 2, a restructure of Obama administration’s Home Affordable Refinance Program introduced in 2009 to help underwater homeowners with loans backed by Fannie and Freddie scheduled to roll out December 1. The version 1.0 results were underwhelming mainly due to the requirement limiting CLTV to below 125, among other restrictions. HARP 2.0 has many improved features such as a higher CLTV limit, lower origination fees and a couple of different loan term options which should benefit a lot more underwater home owners compared to HARP 1.0. In fact the benefits to the borrowers are clear and quantifiable. What is not so clear is the benefit to the servicer, which in my mind, may be the biggest stumbling block to success this time around.

For servicers, the primary incentive seems to be the waiver of lender liability – that they will not be on the hook for reps and warrants of the original loan if they successfully refinance the loan under this program. No doubt this is very appealing, but the benefits are very hard to quantify especially since the borrowers who qualify represent limited risk for buyback in the first place, since they must be current with no lates in the last 6 months with loans originated prior to June 2009 – essentially somewhat seasoned and performing loans. Consequently, it is hard to imagine servicers willing to hire more bodies to field a potential flood of phone calls and manage additional paperwork on top of all the short sales, foreclosures, and REOs that they are already struggling to work through. In fact, judging from the response from some of the servicers at the AmeriCatalyst Conference I attended in Austin, TX recently, my suspicion may be justified. Although official start date is December 1, based on the voluntary nature of the program, many servicers will be slow to initiate solicitation.

But contrary to the response from the larger servicers, we are receiving inquiries regarding identifying HARP 2 qualified borrowers from banks looking to grow their servicing portfolio and looking to acquire new deposit customers for cross-sell opportunities. In fact, we have already identified potential HARP 2 qualified borrowers from our nationwide database and are in talks with credit bureaus to potentially further enhance the list with respect to payment status. All in all, for some servicers HARP 2 may prove to be a very cost effective and profitable strategy for growing their customer base.

PropertyFinder 2G now iPad ready! Property and ownership research on the go

posted by : ThomasC on September 30, 2011

If you own an iPad you’ve probably used it to look up information on homes for sale. Pretty handy to have while you are on the road. There are quite a few tools offering that capability today, and the list is growing. However, property research tools have just begun to be optimized for use on the iPad.

Now, PropertyFinder 2G, DataQuick’s premiere property and ownership research tool is iPad ready!
If you are a PropertyFinder 2G subscriber, all you need to do is navigate through your iPad browser to www.dqpropertyfinder.com. (Tip: tap on URL and save the link to your desktop for quick access!). Login using your PF2G ID and password, and you’re off and running.

If you own an iPad, give it a try from the road and let us know what think. If you don’t yet have PropertyFinder 2G, just click the Get Data Now button on dataquick.com to get a subscription.

How do we get out of this mess? You tell us!

posted by : ThomasC on August 26, 2011

Housing remains a struggling sector. Residential real estate sales are hurting. So how do we get out of this mess?
Some ideas floating around:

  • Real estate flipping is the answer to economic recovery
  • Others are suggesting that banks experiment with cleaning up the books by demolishing foreclosures rather than selling them
  • Still others believe that turning REOs into rentals will save housing

What do you think? Will any of these ideas work, or do you have another idea?

Regardless of when or how the trend reverses itself, real estate transactions are happening every day. Having a comprehensive property research tool is a key. The more you know about a property and its transaction history, neighborhood, distressed status and comparable sales, the better.

A Serious Misunderstanding of the Appraisal and Valuation Business

posted by : Bonnie on August 19, 2011



On August 12, The Wall Street Journal printed a story that demonstrated a serious misunderstanding of appraisers, appraisals and the overall valuation and lending process. Our President, John Walsh, responded with the below letter sent to both the reporters of the story. HousingWire's Jacob Gaffney has commented on the article and our letter, which also appears in The Niche Report. Check out the article and John Walsh's response below and let us know what you think.

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I am writing in response to your Aug., 12, 2011, Judgment Call: Appraisals Weigh Down Housing Sales. Unfortunately, the article badly misses the fundamentals of the appraisal and valuation business. Even worse, the article presents a poor understanding of current regulations regarding the appraisal industry. Finally, the good work many appraisers and AMCs (appraisal management companies) do is either minimized or completely ignored.

In the article, Chris Mayer says “lenders are, ‘instructing appraisers to be a little conservative,’” and that real estate professionals echo “lenders are pressuring appraisers to come in with lower estimates.” Just a few short paragraphs later, the article contradicts itself when it outlines Dodd-Frank’s impact on appraiser independence, which specifically prohibits “loan officers, mortgage brokers, or real estate agents from any role in the selecting appraisers” or influencing the value of an appraisal.

A very broad generalization is made when the article says banks now outsource to AMC. Not all banks outsource to AMCs, some build the process and expertise to manage appraisers in-house. Appraising is not a core competency of lending, however. The lenders we work with are outsourcing appraisals to AMCs, because of the technology we have built, the latest process innovations we incorporate, the subject matter expertise we always have on hand, and the quality assurance and accountability we maintain in our organization.

Another unsubstantiated generalization is made when the article links bank work with AMCs to “appraisers with less experience or who are unfamiliar with a community.” We cannot speak for all AMCs, but the appraisers we use are specifically familiar with the markets in which we accept appraisals. In fact, a sound lender holds us or any AMC to very specific standards regarding proximity, competency, and experience.

The assumption that by losing 10 percent of appraisers, the industry has lost the best appraisers is absurd. The overall real estate market has declined by far more than 10 percent, which would make it only natural for the number of people in the profession to decline as well. Under what basis can we assume that those 10 percent were the best? Who is to say that those 10 percent simply weren’t willing to change the way they did business and pursued work elsewhere? And what about real estate professionals? How many of them have left the business? Does that mean those remaining are the worst of the worst and should not be trusted?

The assertion that AMCs take all the money is in direct contrast to Dodd-Frank, which specifically outlines that appraiser pay must the reasonable and customary. If anything, appraisers are more thoroughly insulated and protected and, therefore, free to make sound appraisals as a result regulations and AMCs.

The article scoffs at the use of technology in appraisals. The Interagency Guidelines made it impermissible to solely rely on an AVM for most lending decisions. However, they can and should be an important part of determining the value of a property. When combined with data, analytics and the experience of a seasoned appraiser, AVM serve a valuable purpose – providing an appraiser all the information available on a home.

Unfortunately, this article reflects a serious misunderstanding of the causes of the housing crisis, the lending process, and the current challenges in the housing market. This misunderstanding is pervasive both in the press and in Washington, D.C. It is driving poor legislation and outrage at the parties least responsible for the current predicament. Now is the time for “less heat and more light.”

Sincerely,

John Walsh, president of DataQuick

Property Research and the iPad

posted by : ThomasC on July 12, 2011

I just saw a great application for the iPad that will interest anyone whose doing real estate listing presentations, or any other presentation for that matter. A company called Avatron.com has launched the “Air Display” app that wirelessly turns any iPad into an extra monitor for desktops or laptops. Users can orient their iPad vertically or horizontally and what’s running on your laptop will show up on your iPad. Pretty cool huh?

I immediately thought of our customers using PropertyFinder 2G. A Real Estate Agent doing a listing presentation can interactively change comparable sales criteria and produce new reports right there with their client. Just log into PropertyFinder 2G using your laptop wireless connection and show the seller what’s on your screen using this new iPad app. The display is much brighter and clearer than the standard laptop screen, but you still have the interactive ability you gain while using PF2G on your laptop.

We’re working on building iPad access for all our property research, property valuation and marketing tools. For now, this is a great work around.

Look for the Air Display app in the iTunes store, and keep reading these blog posts for product updates on new ideas for using DataQuick’s property research and valuation tools.

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