Achieving Mortgage Lending Nirvana with Accurate Home Valuations Up Front

In a $14 trillion household mortgage industry, lenders rely on property valuations to close home loans and, in turn, earn revenue.

Yet by some accounts, up to 30% of appraisals fall short of the OEV or contract value. The result? Beyond the obvious need for rework, lenders lose prospects and potential loans, waste time, and leave billions of dollars on the table.

This isn’t the only lending issue caused by a lack of information at the point of sale. Inaccurate property details can cause frustrating title-related surprises at closing. Unexpected disclosures on zoning, property type, or hazard information can add costs to both lenders and borrowers, delaying deals, or worse, killing them altogether.

Imagine that you are a loan officer working with Rich Homeowner to refinance his townhouse. You and Rich agree fairly quickly that his home is worth $355,000, but you have to wait weeks for an appraiser-concluded value to move forward. When the appraisal is finally delivered, it values the home $40,000 lower than you and Rich had expected — yikes!

Now you have to order a rush appraisal for a second opinion, costing as much as $1,500 and starting the process over (assuming Rich hasn’t already taken his business to a new lender), and as bad as that is, your problems have only just begun.

Rich overstated the earthquake retrofitting on his property, causing you to underestimate the home’s hazard risk. Now, you have to call Rich back to set the record straight and manually update the loan package. Once you have the correct hazard information and an appraisal that supports the OEV, you’re finally ready to close the deal and write the loan.

But wait! Before closing, you discover that Rich’s townhome is technically considered a condominium and requires a 1073 instead of the 1004 you ordered (he thought it was considered a single-family house because it was detached). At this point, you would need to request a 1073, but Rich has already decided to work with a different lender.

What a nightmare!

These circumstances may seem extreme, but they are surprisingly common. In the lending world, problems like this can add up, causing billions of dollars in slippage. However, lenders could avoid most — if not all — of these issues if they had an accurate valuation and property details at the outset of the lending process. 

HouseCanary has developed a suite of tools designed to recapture the 30%, helping lenders retain clients and improve their bottom line. Using our industry-leading dataset and Value Report, loan officers can kick off the process equipped with a value estimate that is less frequently incorrect (and with less severity) than competing valuations.

Accurate collateral underwriting means less rework and a better client experience, not to mention significantly reduced loan manufacturing cost, reduced prospect leakage, more loans, and more revenue.

HouseCanary provides a trusted source of valuation and info up front and ensures data consistency throughout the process. This enables a smoother customer experience and faster closes, saving you time and money, and leading you to a state of mortgage lending nirvana.

See what HouseCanary can do for you

Let’s start the conversation about what you can accomplish with HouseCanary’s industry-leading residential real estate software and services.

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