It seems like every TV channel I flip to, I see CarShield commercials… essentially insurance hedging against costly vehicle repairs. That got me thinking about how lenders can hedge against the costs of poor efficiency, quality, and cycle-time from their Appraisal Management Companies (AMCs). The risks are very real and damaging to lenders everywhere. While there is no such insurance (or assurance) per se, there are plenty of leading indicators to look for – none more prominent than technology.

If there aren’t painfully obvious signs your AMC is tech-savvy, you should consider re-evaluating the relationship. The pace of new technology development in this space is unprecedented, with the whole industry experiencing a rebirth of sorts. Some of those technologies include Artificial Intelligence, Machine Learning, Robotic Process Automation, and Predictive Analytics.

Further, when these new technologies are married to the significant influx of new sources of Big Data, the possibilities are endless.

Signs to Look For

The big question is – ‘What do lenders look for to confirm the AMC is serious about investing in technology?’ We have a few suggestions on where to begin such an assessment.

Proprietary vs. Leased Platform

Your best bet is to consider AMCs that built and maintain their proprietary production platform versus leasing from a third-party vendor. The primary reason is complete autonomy.

Three examples:

1. Customization for your specific business needs. The AMC owns the entire decision-making authority
2. Prioritization – The AMC can set timelines without ever having to work with third parties to get approval, and then development priority, testing, and deployment
3. LOS Integrations – The AMC also controls these decisions and timelines

Strategic Initiatives

Your AMC should have an ongoing history of technology and product initiatives that help lenders and the AMC become better, stronger, and faster. Look for system enhancements and new product launches that seek to improve efficiency, quality, and cycle times. Are there any such initiatives in the pipeline?

Examples might include:

• Reduced the clicks or keystrokes it takes to order an appraisal
• Using data to pre-fill forms for loan officers, panel appraisers, and AMC personnel
• Use of mobile technology to provide more real-time transparency
• Alert-driven toll gates where jeopardies exist
• Bringing in new and unique sources of data

Dashboards & Communication

One of the biggest challenges in any vendor relationship that is transaction (order) based is transparency – at an order level as well as a pipeline level. There are many different stakeholders in the process and they all require updated status, inputs, and outputs. Evaluate what your AMC is doing to simplify and streamline the communication process between all stakeholders, especially between the lender and the AMC. Are there intuitive dashboards to be consumed by various lender personnel (e.g. LO, supervisor, executive, etc.)?

In Summary

Margin pressures and borrower satisfaction are always top-of-mind for lenders, and nearly all vendors contributing to the process have an impact. AMCs leave a significant imprint. Find an AMC that won’t just automate, but they will first ‘obliterate.’ Translation – You cannot just automate the existing mediocrity, you must first re-think the processes and workflows before you automate, or you will just achieve the same mediocre result… faster.