NMP - October 2016 - 26

✒ Workflow-Driven Valuation Management Technology Helps Ensure Appraisal Quality nmp news flash continued from page 16 Commercial, Multifamily Mortgage Debt Takes 2Q Leap By Vladimir Bien-Aimé A n enterprise-class workflow-based valuation management platform can automate much, if not all of the appraisal process. There are many details to attend to in order for appraisals to be completed, and they of course must be done in full compliance with state and federal rules and OCTOBER 2016 n National Mortgage Professional Magazine n NationalMortgageProfessional.com 26 regulations. One area that is of particular importance is ensuring appraisal quality by way of trigger-based automation at certain points in the workflow. While there are various checks and balances that can assist with returning quality appraisals before they go to underwriting, many of them are not typically automated, leaving organizations with a higher risk of running into appraisals issues- affecting timelines and the salability of loans. However, having a workflow-driven valuation management platform in place ensures proper timing and execution throughout the appraisal process. By leveraging such a platform, you can configure your system to automatically trigger appraisal quality reviews, thus eliminating manual intervention. The ability to run multiple review products is key, as many systems only offer one option that may not fit every given situation properly. Valuation workflow technology can be set to run appraisal quality reviews at any point in the process for real-time appraisal evaluation for completeness, compliance and consistency with GSE guidelines, USPAP, UAD and industry best practices. This significantly reduces an underwriter's time spent on the collateral review process, and it prevents issues that may result in the appraisal not being accepted, which can hold up loan approvals. As an example, collateral analytics can be set to automatically trigger at a certain point in the workflow to score the appraisal and provide reviewers and underwriters with a detailed analysis of appraisal quality, repurchase risk, valuation uncertainty, market volatility and more. Similarly, AVMs can also be automatically ordered during the workflow to perform a cursory collateral quality valuation check early on in the process by way of auto triggers. Again, human intervention is avoided. Within workflow automation technology resides a rules engine which empowers users with functionality to implement autotriggers that are action and status-based, giving you full control over appraisal orders. And, workflow rules can also be put in place to efficiently manage vendors. For instance, when a vendor uploads an appraisal, a review is automatically triggered-thus eliminating timely back and forth communications. The bottom line is that there is a lot of control that workflow automation can deliver, and more control translates to better quality appraisals. The beauty of a platform that functions utilizing a trigger-based system of workflow actions is that you can ensure appraisal quality checks are executed automatically throughout your process versus utilizing manual intervention, which is costly and risky. Vladimir Bien-Aimé is president and CEO of Global DMS. Since founding the company, BienAime' has grown Global DMS to capture a leading share of the valuation management segment. He may be reached by phone at (877) 866-2747, email Vlad@GlobalDMS.com or visit GlobalDMS.com. SPONSORED EDITORIAL Commercial and multifamily mortgage debt outstanding grew by $39.9 billion in the second quarter, according to data released by the Mortgage Bankers Association (MBA). Multifamily mortgage debt outstanding rose by 2.6 percent to reach $1.09 trillion, while the total commercial and multifamily debt outstanding increased 1.4 percent to $2.90 trillion. Commercial banks held the largest share of commercial/multifamily mortgages in the second quarter, with $1.1 trillion or 39 percent of the total, while agency and governmentsponsored enterprise (GSE) portfolios and mortgage-backed securities were the second-largest holders with $486 billion or 17 percent of the total. Commercial mortgage-backed securities (CMBS), collateralized debt obligations (CDO) and other assetbacked securities (ABS) issues held $484 billion, or 17 percent of the total, while life insurance companies held $407 billion, or 14 percent of the total. In focusing solely on the multifamily market, the MBA noted that the $27.6 billion spike in multifamily mortgage debt outstanding between the first and second quarters was a 2.6 percent increase. Agency and GSE portfolios and MBS saw the largest increase in their holdings of multifamily mortgage debt, an increase of $13.8 billion, or 2.9 percent, while commercial banks increased their multifamily mortgage debt holdings by $13.1 billion, or 3.7 percent, and life insurance companies increased by $1.6 billion, or 2.6 percent. However, CMBS, CDO and other ABS issues saw the largest decline in their holdings of multifamily mortgage debt, by $1.7 billion, or down 3.1 percent. Banks and thrifts recorded the largest increase in holdings of multifamily mortgages, at 3.7 percent, while real estate investment trusts saw the biggest decrease at 12.3 percent. "The amount of commercial and multifamily mortgage debt outstanding grew to a new record during the second quarter, despite a record drop in the balance of commercial mortgagebacked securities loans outstanding," said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. "The CMBS market is seeing far more loans paying off and paying down than new loans being originated." Fannie Mae Predicts 2.6 Percent Growth for Second Half of 2016 Economic growth is on track to reach 2.6 percent in the second half of the year, according to Fannie Mae's Economic & Strategic Research (ESR) Group's September 2016 Economic and Housing Outlook. For the entire year, the ESR Group is forecasting 1.8 percent growth; the first half of the year only saw one percent growth. Furthermore, the ESR Group is predicting that consumer and government spending are expected to drive growth despite an ongoing slowdown consumer activity. Fannie Mae Chief Economist Doug Duncan expected nonresidential fixed investment to reverse the trend of the past three quarters and "post a modest increase" in the third quarter while residential investment declines for the second consecutive quarter. "A bright spot for housing market activity is the strengthening of new home sales, which is significantly outperforming activity in recent years," said Duncan. "The share of new home sales that are under construction or not started has climbed to nearly 70 percent, improving the outlook for singlefamily homebuilding. Existing home sales underperformed 2015 for the first time in July, however year-to-date sales are still 2.6 percent higher than during the same period last year. Additionally, the share of for-rent multifamily building starts has trended up with recent trends in homebuilding activity favoring the rental market." continued on page 36 http://www.NationalMortgageProfessional.com http://www.GlobalDMS.com

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