Important Tips to Consider When Selecting Your AMC Provider

An appraisal management company (AMC) is a third-party company that manages the appraisal process for real estate transactions. AMCs are typically used by lenders, mortgage companies, and other financial institutions to ensure that appraisals are completed impartially and in compliance with industry standards and regulations.

SettlementOne, a leading AMC in the real estate sector, has listed out important tips you should consider when looking for an AMC provider:

Compliance: Ensure that the AMC is compliant with state and federal regulations. This includes the Uniform Standards of Professional Appraisal Practice (USPAP), which is a set of guidelines that govern the appraisal profession.

Experience: Look for an AMC that has a good track record and a proven history of delivering quality services. Consider the number of years the company has been in business, the number of appraisals they have completed, and their client satisfaction rate.

Technology: The AMC should have a modern, user-friendly technology platform that allows you to easily order, track, and receive appraisals. The platform should also be secure and protect sensitive information.

Appraiser network: The AMC should have a wide network of qualified and licensed appraisers who have expertise in the geographic areas where your properties are located. It’s important that your AMC understands your target market.

Turnaround time: Look for an AMC that can provide fast turnaround times without compromising quality. A good AMC should have a system in place to prioritize rush orders and ensure that appraisals are completed within the required timeframe.

Customer service: The AMC should have a responsive and knowledgeable customer service team that can address any issues or concerns you may have throughout the appraisal process.

Cost: Consider the fees charged by the AMC and whether they offer competitive pricing. However, keep in mind that the cheapest option may not always be the best choice if it results in lower quality appraisals or delayed turnaround times.

The AMC manages the appraisal process by ensuring that the appraiser is qualified, that the appraisal is completed in a timely manner, and that the appraisal report meets industry standards and guidelines. The AMC also acts as an intermediary between the appraiser and the lender, communicating any issues or questions that arise during the appraisal process.

By using an AMC, lenders can ensure that appraisals are completed objectively and in compliance with industry standards and regulations. This can help to mitigate the risk of fraud or bias in the appraisal process, which could lead to inaccurate valuations and potentially impact the lender’s financial performance.

As one of the most innovative AMC’sin the U.S., SettlementOne ensures lenders deliver the highest quality appraisals to their customers, while meeting their goals of compliance, operational efficiency and cost-effectiveness. Reach out to our team today if we can be a resource to you with any of your appraisal needs.

Credit & Data Verification Optimized for Modern Lending Operations

Millions of aspiring homeowners apply for mortgages every year. It can be a time-intensive, exhaustive process requiring applicants and lenders alike to wade through seemingly endless stacks of paperwork to evaluate the borrower’s ability to repay the loan. Thanks to SettlementOne, that tedious process is now a thing of the past. Our credit and data verification services offer a streamlined process that compiles updated asset and income data directly from financial institutions. This intuitive approach simultaneously offers consumers a better overall experience and offers lenders the optimized workflow efficiency, greater transparency, and FCRA compliance they require to make better decisions.

Facilitating Smooth Credit Verification

Determining a potential borrower’s credit worthiness is dependent on several factors. For decades, SettlementOne has delivered millions of efficient, accurate and dependable credit reports to lenders across the country. By leveraging our innovative, web-based credit reporting platform, loan officers can effectively mitigate risk based on verifiable data and conduct real-time activity monitoring. Concise reports sourced from one, two or three bureau credit bureau agencies are accessible almost instantaneously. The following is a brief overview of the inclusive range of services SettlementOne offers lenders to optimize their underwriting and lending processes:

  • Business Credit Report: Utilizing third-party, objective data to paint a comprehensive view of potential commercial customers and prospects, this remarkably in-depth profile identifies business payment performance, public record history and background information so lenders can more thoroughly evaluate the creditworthiness of a business.
  • Consumer Profile Credit Report: SettlementOne’s consumer credit reports provide loan officers all of the information they need to underwrite loan applications and can be specifically tailored to meet your unique specifications. Our credit reports are intended to empower lenders to make confident lending decisions based on reliable data, taking the guesswork out of the equation and reducing potential risk.
  • EZ Error Correction: Inaccurate information provided by lenders to credit bureaus results in reduced credit scores. Studies indicate that more than a third of all credit reports contain at least one error, an alarming statistic for lenders. SettlementOne appreciates how important it is for lenders to provide timely updates to their borrowers’ credit reports. The EZ Error Correction product is a turnkey solution to this conundrum. Consumers simply enter the tradelines that contain incorrect information and SettlementOne will contact the bureaus on their behalf—resolving any errors within 30 to 45 days with no cost to the lender or their borrowers.
  • Rapid Rescore: Even a few points on a credit score can make a huge difference on the overall cost of a borrower’s mortgage—or even their ability to obtain initial loan approval. SettlementOne offers a quick rescoring service that corrects outdated or inaccurate information in less than a week, replacingthe outdated or incorrect information, and providing an updated credit score.

No-Frills Data Verification

SettlementOnealso provides comprehensive data verification and fraud protection solutions. Leveraging our direct access to the IRS, financial institutions and employers, our team provides lenders with the most accurate, current and reliable data—resulting in unmatched protection and risk reduction across the entire loan cycle. Our scope of convenient web-based tools gives lenders the means to quickly verify crucial information needed to complete the mortgage funding process. These services include:

  • AccountChek: The industry leading application for safe and secure automated verification of assets and deposits, enabling speedy validation of consumers’ account information and expediting the underwriting process while mitigating fraud.
  • ADV-120 Report: A single, comprehensive report highlighting risk factors for potential fraud within a given mortgage application. We closely analyze the loan file and verify key data, summarizing our findings in an easy-to-read report pinpointing any noted discrepancies between the application and billions of public records.
  • Employment & Income Verification:SettlementOne provides lenders with employment and income information sourced straight from the employer, eliminating doubt and cutting back risk of fraud—all within seconds by leveraging the expansive Equifax The Work Number, Experian Verify, and Truvdatabases.

Mitigate Risk with SettlementOne

Lenders need to be able to rely on the data they use to make informed funding decisions. SettlementOne’s comprehensive suite of cutting-edge solutions facilitate transparency and mitigate risk during all stages of the application, underwriting, and prefunding processes. Contact us today to learn more about how we can help your organization optimize your lending operations.

Peak Inflation—Are We There Yet?

Although the headlines of late have been dominated by rampant inflation and increasing interest rates, there may be hope on the horizon. Although this most recent cause for optimism is only premised on a single month’s worth of data, it is still welcome news to the real estate industry that has been infused with volatility and uncertainty for the past few years.

The November Consumer Price Index (CPI) report, one of the primary statistical analyses for gauging cost fluctuations within the United States economic marketplace, indicated that the year-over-year inflation rate has dipped to 7.7% after prices increased only 0.4% from October. This modest price increase was notably lower than the majority of projections from economists who anticipated much higher inflation.

Delving into the CPI numbers a bit further, it appears that the costs of several assets are coming down—to include automobiles, textiles, medicine, furniture,appliances, and food. Falling prices in these categories assisted in offsetting prices that are still increasing and brought the net inflation percentage down.

The CPI index references several independent data points to tabulate its estimated inflation rate. A primary one is the Personal Consumption Expenditures Index (PCE) which aggregates surveys of corporations as opposed to consumer feedback as to what their expenses are allocated to. The PCE monitors a broad range of goods and services to determine trends in pricing fluctuations. It is generally regarded as somewhat more stable than other indices as it excludes highly volatile markets such as food and energy that could disproportionately influence inflation estimates.

If these trends continue, it could influence the Fed’s reaction as it seeks to curb inflation levels via interest rate hikes. The Fed had announced it was planning to suspend interest rate escalations in mid-2023; however, if prices continue to lower in line with the November CPI Index data it could move forward their plans to suspend rate hikes.

Many are speculating that this recent data suggests we have hit what is called “peak inflation”—or the point when economic prices start a consistent decline from historical highs. Inflation is a nuanced concept that is partly driven by consumer behavior. When buyers anticipate price increases, they hurriedly purchase assets at the current lower price points as opposed to what they believe will be higher costs in the near future. The same phenomenonoccurs within the housing industry—when aspiring homebuyers believe that mortgage rates are set to go up soon, they rush to obtain mortgages.

This panic-induced spending typically has a proportional impact on prices. If buyers once again have confidence that the future dollar will be equitable to today’s, they will cease excessive spending. The collective effect of this trend could help reverse overall inflation and reduce the economic volatility we have been experiencing as of late.

While the U.S. gross domestic product (GDP) has fallen for two consecutive quarters, the national unemployment rate is still relatively low and corporate earnings have posted strong numbers over the past few months. More than 500,000 payrolls were injected into the U.S. economy in July 2022 alone in addition to another 2.8 million during the first six months of the year.

Actionable Insights on Demand

Informed decision-making is premised on information, but how do you convert raw data into discernable trends and comprehensible insights? That is where SettlementOne comes into play. Our team of experts provides on-demand credit reporting, property valuation, flood certification, fraud and verification services to U.S. banks, lenders, brokers, and credit unions. Look no further than SettlementOne for secure, efficient, and cost-effective solutions that streamline your business process so you can focus on delivering the bestend-product to your clients.



Forecasting Inflation’s Potential Impact on Housing Prices

The previous two years have been quite eventful for real estate professionals involved in any type of property asset transaction. Let’s take a closer look at some of the key market dynamics—specifically the correlation between fluctuating interest rates and median home values—to hopefully gain a better understanding of how these variables will fluctuate in the coming months.

Interest rates steadily declined from 4.55% in August 2018, when the median home price came in at $388,400, to a new low of 2.67% in December 2020 at which point homes were then selling for an average of $401,700. The market was busier than ever as prospective homeowners sought to take advantage of the optimal mortgage rates. Over the course of 2021, a total of 15 million mortgage applications resulted in loan originations. Of these, 13.7 million were closed-end mortgage originations and 1 million were open-end line-of-credit originations per the CFPB.

Rates then rose slightly over the subsequent year, hitting 3.11% in December 2021, as the median home value similarly escalated to $457,300. According to data compiled by the Mortgage Bankers Association during this time period, the median balance for a first mortgage peaked at an all-time-high of $298,324—up substantially from $278,725 the previous year—which is the largest single-year increase in the history of the Mortgage Bankers Association’s annual report. Since the end of 2021, mortgage rates have experienced significant increases, rising from an average rate of 3.1% on a 30-year fixed mortgage to the current rate of 7.2% based on a market study conducted by Bankrate.

Did all the purchase and refinance transactions completed during 2021 have a collective negative impact on the housing market? We’re not talking about average home values falling off as that is certainly not the case. The main concerns is that overall activity within the housing market that the majority of trades rely on has started to decline. This overall rate of transactional movement within the real estate industry is what agents, lenders, appraisers, servicers, title agencies, inspectors, notaries, photographers and countless other professionals rely on in order to sustain business operations—and it has become increasingly volatile as of late.

The Federal Reserve has attempted to combat inflation by effectively making borrowing capital to fund real estate transactions inherently more costly. The intended consequence is to dissuade consumers, investors and businesses from completing purchases and investments with the aid of credit, which results in reduced overall levels of economic demand. The theory is that this will subsequently slow or even reverse the recent escalation of average home prices and rebalance supply and demand ratios. The concern is that because purchasing property is simply not an option for the majority of individuals, these inflated interest rates will dramatically impact potential homebuyers’ relative purchasing power.

Will the Federal Reserve’s actions have the intended effect of reigning in housing prices, or will it ironically result in the opposite scenario of property becoming more expensive than ever. As interest rates continue to rise, fewer homeowners will choose to upgrade their living situation, relocate to a more affordable geographic location or otherwise list their home for sale—which is exactly what is needed in order for the housing supply to meet the ongoing demand from buyers.As inventory levels around the country continue to be depleted, prices continue to skyrocket, and the marketplace becomes even more competitive for those looking to acquire a home.

Markets that saw explosive growth which outpaced even the most well-known rapidly expanding markets such as Phoenix, Boise, Las Vegas, and Austin (just to name a few) will see pricing settle to match the markets that had steady increases. These markets attracted a substantial amount of investors as they grew at unprecedented rates, and many of these individuals have listed these homes seeking to cash out while prices are still optimal. As the number of available homes subsequently increase in these markets, prices will decline steadily. According to Moody’s Analytics, Las Vegas and Phoenix are “overvalued” by 53.3% and 53.8%, while Greater New York is “overvalued” by just 7.4%. As investors shy away from these riskier markets, there will be less buyers available, and homes will quickly have to compete to sell. But this should see the opposite in safer markets with higher demand as investors begin to look for opportunity and compete with traditional home buyers.

What is behind the rising inventory levels in these select areas? In many major markets throughout the country, prices are falling although values remain constant. This is due to sellers continually looking to set the status quo for their local market by asking for more than the last sale. These homes that once were the subject of contentious bidding wars are now starting to see price reductions until they sell at a value at or near prior sales. Many of the homes that were listed on the market in the last several months are coming from potential sellers that consider this as their last chance to cash in on the days of overbidding by hungry buyers. As such, while inventory has increased, many of these markets have non-urgent owners that will only sell for their preferred price and are perfectly content letting the listing expire instead of settling for a lower value.

As buyers stay put in their primary homes with 2-3% interest rates and lower property taxes, we should see more 2nd loans and Home Equity Line of Credit (HELOC) loans. Owners will likely want to tap into their equity without impacting their low fixed first rate, since we will likely never see mortgage rates that low again in our lifetime. This could include funding construction to update their current home to have the utility to service their family for many years to come, or it might be simply to take money out of the home.

These reduced risk loans offer more flexibility, while allowing faster closings and a lower price. SettlementOne has introduced an entire line of valuation credit products geared at serving this market to complement our robust line of traditional products for conventional lending. These alternative loan products include Automated Valuation Methods (AVM), Interactive AVMs, Brokers Price Opinions (BPO), Hybrid Appraisals, Evaluations, PDR with ACE, and combination products. SettlementOne looks at this as an opportunity to give our clients more options and flexibility to win the business quickly. When you partner with SettlementOne, not only do you get our expertise, but you also receive a custom concierge service to guide you throughout the process. We pride ourselves on being a preferred partner with the solutions to be our clients’ go-to provider for all their valuation needs. Contact us today to learn more about how we can assist you with your next real estate project.