Mercury Network Blog
July 22, 2010
Stay vigilant - A rule shall be made
Today I flew home from the Appraisal Institute Summit 2010 in Washington D.C. As I sat on the tarmac, waiting for the obligatory command to shut off all portable and electronic devices, I was scanning through my Facebook news stream, and saw a post by the President (no, we’re not “real” friends) urging all Americans to watch the signing of H.R. 4173 at 11:30am EST, otherwise known as the Dodd-Frank Wall Street Reform and Consumer Protection Act. (We simply call it the DFA for short.) One of the most discussed topics at the AI Summit was the DFA, obviously. That Facebook post, in turn, got me to thinking about the various things I’ve taken away from the Summit, which I must say was quite informational and a good use of time. I wish more real estate appraisers and mortgage lending industry representatives had taken time to attend. In the past we’ve been critical of the AI’s efforts in Washington on behalf of residential appraisers, but I’ll give it up. This was an excellent event, and the AI under current President Sellers really seems to have been engaged on this bill. The AI, and Bill Garber in particular, did a fantastic job with this Summit.
But, of the many things I’ve taken away (and will write about over the coming days), perhaps the most important is the need for real estate appraisers, appraisal management companies (AMCs), and mortgage lenders to maintain a vigilant watch over what comes of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Sure, the President has signed it, but that’s just the beginning. The proverbial fat lady has yet to sing over this one. As has been stated repeatedly, and depending on who you ask, there are between 243 and 533 new rules, 60 studies and 93 congressional reports by the GAO yet to be hashed out. So, as one General Counsel I listened to at the Summit put it, there are lots of parts that say, “There shall be a rule made” about some aspect of the bill or another. And, the parts specific to real estate appraisal, appraisal management companies, and appraiser/lender interaction may well be modified heavily in the next 90 days. As Rep. Kanjorski said during the summit, the “hard part of the bill occurs now”.
That being the case, my challenge to anyone with a stake in the real estate game is to take an hour and do some research. Dig into what the bill means for your space in the industry. Contact your elected officials to continue to make your voice heard (you know the lobbyists are already hard at it). Set up Google alerts on key search terms and phrases to have relevant news, articles, blogs and websites sent right to your inbox. Stay in-the-know, and stay tuned in.
The bill has been signed. But this is just the beginning. As the second most interesting man in the world says, “Stay vigilant my friends”.
July 16, 2010
Introducing Mercury Network’s Client Relations department
I’m excited to head up the new Client Relations department for our Mercury Network customers. It’s great to be working with talented, engaged people who really understand our clients and the industry we serve. These folks are experts – from both a customer service and a technical standpoint – so our clients know that when they call they’ll talk to someone who understands loan production and the challenges involved.
We built the Client Relations department because a huge number of lenders that we talk to tell us that the service they’ve had from other providers was terrible – with issues ranging from lack of knowledge about appraisal management to flat-out unavailability. a la mode has always provided the industry’s best technical support to our appraiser, mortgage originator, inspector, and agent customers – with 24x7x365 access to knowledgeable, expert reps – and nothing has changed there. Now, we’re taking it up a notch, since every Mercury Network client can also contact their own dedicated Account Manager from 7AM to 6PM (CST) Monday -Friday. Through this one-on-one relationship, Mercury Network users have access to staff training, compliance information, and reliable advice about vendor management – all from a skilled person who understands the business and how Mercury’s tools can increase appraisal quality, reduce costs, and eliminate the headaches commonly associated with managing appraisals.
Bottom line: It’s top-tier support for the best appraisal management tools available. Whether it’s a simple “how-to” question or in-depth integration with a custom LOS, Mercury users can always talk to a live, industry-aware person who can provide comprehensive support.
Knowing that customer service can make or break even the best tools, this makes Mercury THE answer for those who want to leave behind convoluted, low-quality appraisal management. I’m proud to work alongside the people who make Mercury a complete vendor management solution that’s clearly better than anything else out there. We sincerely look forward to working with you.
July 13, 2010
Mortgage Banking Article: Three Legs Of The Appraisal Management Stool
Mortgage Banking Magazine has just published an article I wrote on the three critical aspects of appraisal management: Regulatory compliance, proactive quality assurance, and fraud management. The article covers areas often (and dangerously) overlooked by many. It also includes the action items we recommend to employ a comprehensive approach to managing the risk factors affecting every institution.
Mortgage Banking Magazine's "The Three Legs of the Appraisal Management Stool" (PDF)
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July 12, 2010
The 1 Credit Union Conference
We're on the road again – this time at the 1 Credit Union Conference in Las Vegas at the MGM Grand. Come see us in booth #403 through Wednesday (7/14) and you could win an iPad.
Several of Mercury Network's fans are credit unions because it lets them order high quality appraisal reports from local appraisers, without a marked up management fee. Their members save money on closing costs, they get a high quality appraisal, and they keep closings on schedule – all at zero cost to the credit union. They also benefit from the built-in HVCC, GLBA, and FHA appraisal compliance tools.
In the last few months, we've received several comments from Mercury Network users about the benefits of using their trusted, local appraisers, and credit unions have been very vocal about this issue in particular. We're thrilled to be at the Convention to spread the word about Mercury to credit unions, so if you're here too – stop by and say hi. We'd love to meet you.
July 9, 2010
Florida Association of Mortgage Professionals
7/12/2010 - A quick follow up on the FAMP Convention: We had a very successful show and met several new Mercury Network clients - Welcome aboard! In Florida, reverse mortgages are an incredibly hot topic right now so we're glad we could introduce the convention attendees to Mercury. An accurate appraisal from a local, expert appraiser is critical with a reverse mortgage loan, especially with highly fluctuating areas like Florida - so Mercury Network is a great resource for them. Thanks to FAMP for a successful convention!
7/9/2010 - Good morning from the Florida Association of Mortgage Professionals Convention in Orlando! Sean Shiplet, Brandon Ouverson and I are here to talk about Mercury Network and the rest of our mortgage solutions – come by and visit us in booth #209 in the Expo Hall.
Today (Fri 7/9) from 2:45 – 3:15, I’ll be giving a presentation called “Deals dying because of bad appraisals? - How to use your own appraisers and still maintain HVCC compliance”. Come by and learn how you or your AMC can use Mercury Network to engage your own experienced, local appraisers and maintain HVCC, FHA, GLB and Fed interagency compliance. Over 200,000 mortgage professionals have been relying on Mercury Network to manage the full round trip of tens of millions of appraisals since 2002 because it eliminates delays, information bottlenecks, and the well publicized pitfalls associated with traditional appraisal management companies. Join us to see how you can be using it too, in just minutes.
Come join the discussion, or just say hi. We’ll buy you a drink.
July 2, 2010
New Order Management Quick Start Guide
Based on your feedback, we've created a useful new resource: Mercury Network's Order Management Quick Start Guide.
For your loan production staff the primary focus is on creating and managing orders, which makes scrolling around the entire manual a waste of time. So, we've created a guide that focuses only on features of Mercury Network used for the appraisal management process. It gets straight to the point and your staff gets up and running fast.
Click here to download it now.
We're constantly adding new features and resources to Mercury and many of them are a direct result of your feedback. Do you have ideas or suggestions? Send them to .(JavaScript must be enabled to view this email address) today and we'll get back with you right away.
March 15, 2010
Is your appraisal process breaking federal law?
Lenders are under more regulatory compliance scrutiny than ever, especially as consumers engage lawyers nationwide in foreclosure, valuation, and predatory lending lawsuits -- many of which are turned into class actions. Unfortunately, some lenders are discovering to their chagrin that the way they order and receive appraisals is indeed breaking federal law, specifically the GLB (Gramm-Leach-Bliley) Act.
If appraisals are ordered or received using regular unencrypted email, or even via fax machines in an open unsecured area, then GLB is being violated, since those contain consumer data that GLB mandates as protected. If sales contracts are attached to appraisal orders and reports, then it's even worse. And storing printouts of those documents in cardboard boxes or unlocked file cabinets is strictly forbidden. Nevertheless, every day, many lenders are subjected to every one of those risks.
A consumer privacy breach can be exceptionally expensive, and everyone in the transaction can get mired in the ensuing legal liability mess. With consumers more militant and better armed than ever, most lenders are one non-shredded trash bin or accidentally forwarded e-mail away from a privacy lawsuit.
That's where our Mercury Network comes in. It can eradicate the legal liability associated with ordering, receiving, managing, and storing appraisal-related documents. Mercury is fully GLB-compliant, with end-to-end encryption, a secure upload/download container for sales contracts and other sensitive documents, appraisal PDFs that are never directly attached to email messages, and secure paperless storage of transaction documents.
Using an AMC doesn't automatically solve the problem. Far too many AMCs use non-secure processes either internally or with the appraiser, mortgage broker, or real estate agent. And under the GLB's "Safeguards Rule", the lender is responsible for the actions of suppliers to whom the consumer's private information is entrusted. If they aren't 100% GLB compliant, then the lender isn't either, and GLB holds the lender legally liable for not auditing the practices of business partners. Think of it as "SAS-70 with a $100,000 fine per audit violation plus a prison option". It's not a pretty picture.
We know these issues, and can solve them for you, because we literally "wrote the book" on GLB as it pertains to appraisers (see the white paper, here).
Contact us today for a complete assessment of how Mercury can be used to eliminate your GLB liability. Simply email us at .(JavaScript must be enabled to view this email address) or call us at 1-800-252-6633. We look forward to hearing from you.
March 12, 2010
Q and A: Alternatives to AMCs for HVCC compliance
Question:
"What is it going to take for the lending industry to better understand there are alternatives to AMCs when it comes to maintaining HVCC compliance?"
Answer:
The first thing to recall is that AMCs are not an HVCC compliance solution at all. The lawsuit by the NY AG's office which resulted in the creation of the HVCC was filed against a lender who pressured a major national AMC to use only those appraisers who hit the lender's requested numbers.
Just hiring an AMC but then sending them legally discoverable emails to the effect of "find someone else to make the deal work" is obviously not any sort of HVCC-compliant "firewall". Yet it happens all the time. In an age when consumers are emboldened by class-action suits and public officials look to score high-profile populist victories, that's a massive risk.
It's not mitigated by simply eliminating mortgage brokers from the process either. They've been a scapegoat to date, but the fact is that loan officers and mortgage brokers have had virtually identical fraud rates for years. Bad internal loan officers e-mailing their contacts at AMCs create a paper trail a mile wide, and it leads right back to the lender.
The industry needs to be made aware of that risk. Only risk aversion will result in lenders employing a smarter mix of automation, employee training, and stringent internal controls.
On the automation front, systems like our Mercury Network reduce exposure by eliminating the pressure option completely. For example, our bi-directional double-blind firewall provides real-time managed status without anyone knowing or selecting the appraiser, or communicating with them in any ad hoc manner. To the contrary, most large AMCs are still highly dependent on their staff manually selecting, calling, and e-mailing appraisers. Put simply, we believe that "people with headsets working on commission" are too likely to engage in risky behavior, and lenders pay the price when they do.
Even if a mortgage lender is currently happy using just a traditional AMC, they still need specific valuation technology, staff training, and fraud controls in place for actual HVCC compliance. Like all risk aversion, a layered strategy works best.
Lenders should take the time to investigate the multiple options of mature non-AMC, technology-centric management platforms available. It's usually free to test drive them with a small number of appraisal orders to see how they work. There's nothing to lose, but so much to gain, that not performing that due diligence could be the riskiest behavior in the whole process.
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