Home Equity Valuation Products that Outperform Appraisals

Here are 3 examples of how CSS has helped other lenders save time and money with these products

Lender saved $500K per year

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location
Pennsylvania

Assets
$40 Billion

Products used

  • Hybrid Appraisal with Exterior Inspection
  • Hybrid Appraisal with Interior Inspection

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Lender reduced valuation turn time and cost by 70%

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location
Florida

Assets
$10 Billion

Products used

  • Hybrid Evaluation with Exterior Inspection
  • Hybrid Appraisal with Exterior Inspection

Learn more »

Lender cut staff review time in half

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location
New Jersey

Assets
$10 Billion

Products used

  • AVM Cascade
  • AVM with Inspection and Validation Report

Learn more »

As a home equity lender, you likely struggle with extended appraisal turn times and increased costs. However, it can be overwhelming to sort through the many alternative valuation vendors and products.

At CSS, our expert valuation staff does the heavy lifting for you. We conduct extensive due diligence on home equity valuation products to identify the best-in-class solutions across vendors. We then curate the best selection of valuation products for each of our customers based on their lending needs.

This results in decreased origination costs and turn times, without your staff having to invest time in conducting their own research. In this case study, we will show examples of the results that CSS produced for three of our lender customers.

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PA lender with $40B in assets saved $500K per year by introducing multiple hybrid appraisal products

PRODUCTS USED BY THIS LENDER

  • Hybrid Appraisal with Exterior Inspection
  • Hybrid Appraisal with Interior Inspection

As a home equity lender, you are constantly challenged with how to reduce loan origination costs while continuing to underwrite high quality loans.

CSS recently addressed this challenge with one of our home equity lender customers by undertaking a comprehensive review of their current valuation approach and suggesting several meaningful changes:

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The customer was using full appraisals on loans in rural areas, roughly 15% of their portfolio.

We introduced a hybrid appraisal product that performs particularly well in rural areas, saving $185 per loan.

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The lender was paying for a hybrid appraisal product with the cost approach on 25% of its loans, which was unnecessary given their underwriting requirements.

We moved them to a lower cost hybrid appraisal product that still met their underwriting requirements, saving $80 per loan.

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The customer was paying for a hybrid appraisal product with comp grid adjustments on 50% of its loans, which was unnecessary given their underwriting requirements.

We moved them to a lower cost product that still provided a comp grid, but no adjustments, saving $20 per loan.

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CSS also introduced the lender to two lower-cost alternatives to full appraisals: hybrid appraisals with interior inspections, and drive by appraisals.

All together, these changes resulted in $500K of annual savings for this lender.

In addition, this customer reduced its valuation turn times by moving a significant percentage of their loans from using full appraisals with turn times of 7+ business days to hybrid appraisal products with 4-5 business day turn times. As an extra bonus, CSS manages the entire valuation process for this lender, meaning that we select the correct product to use on each loan and even cascade individual loans through multiple hybrid appraisal products to find the best fit.

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FL lender with $10B in assets reduced valuation turn time and cost by 70% by implementing a hybrid evaluation product

PRODUCTS USED BY THIS LENDER

  • Hybrid Evaluation with Exterior Inspection
  • Hybrid Appraisal with Exterior Inspection

CSS recently implemented a hybrid evaluation product for a home equity lender closing several hundred loans per month.

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The evaluation product has been successfully used on 75% of these loans.

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On loans where the evaluation is unsuccessful due to property or loan characteristics, CSS automatically upgrades to an appraiser-valued hybrid or full appraisal.

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On loans where the evaluation was used, the lender has reduced valuation cost and turn time by 70% as compared to a full appraisal.

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Overall, this lender’s savings from using evaluations instead of full appraisals are approximately $60K/month.

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NJ lender with $10B in assets cut staff review time in half by moving to the AVM with Inspection and Validation Report product

PRODUCTS USED BY THIS LENDER

  • AVM Cascade
  • AVM with Inspection and Validation Report

CSS worked with this lender to select the AVM with Inspection & Validation Report. The primary benefit of this report is that the AVM and Inspection are combined into one product, with a trained analyst comparing and validating both components. This removes the need for the lender’s staff to review the AVM against the inspection, expediting the lender’s internal valuation review process. Instead, the lender can review the analyst’s commentary that highlights any key factors for the lender to consider in making their lending decision. In addition, CSS was able to program the lender’s AVM cascade on a county-by-county basis. Therefore, the cascade runs a different order and sequence of AVM models in each county to maximize hit rates and accuracy. In addition, if the lender’s required confidence score is not met on a particular AVM, CSS does not complete the inspection piece of the report. Instead, we upgrade the product directly to a full appraisal, avoiding the additional cost of the inspection.