Getting Started with Purview: Integrating Purview Into Your Workflow

Whenever you look at ways to integrate new technology into your organization to increase efficiency, it is important to consider how versatile the technology is and how much use you can get out of it. The Purview For Lenders product is one that is commonly known as being a staple in underwriting departments Canada-wide, but Purview is actually used in many different areas within an organization.

In Ontario, Purview For Lenders uses data from the Province of Ontario's Land Registry Information System (POLARIS), which contains the most current and accurate land information available. Data provided from outside of the Province of Ontario is facilitated through agreements with both municipal and city assessment offices and third party providers.

This data is then delivered through a report that reveals:

• Property Sales Information – information about the property’s sales history
• Home Ownership Information
• Registered Mortgages and Liens
• Property Value and Equity Estimate
• Fraud Check and more…

The information is versatile because, within a financial institution, it can be useful in so many different areas.

On the collections and enforcement side, this report can be obtained in an instant online and is far less expensive than an appraisal. It can be used to evaluate a particular client’s property or it can be used to evaluate your entire collection’s portfolio. You can locate clients and also learn of other properties they may own, so if you do power of sale and are in a loss position you may pursue the debt through other assets.

In special adjudication, you can use the AVM to validate the value that a broker or client has submitted in an application and even compare it to the active MLS listing or to active MLS listings.

In risk management, you can leverage the data in Purview to evaluate and value your current portfolio and determine price appreciation year over year. You can also use Purview to determine housing price trends again interest rates.

Private lenders really gain a lot of value from of Purview. Traditionally a product used by major banks, more trust companies, credit unions, MICs and private lenders now take advantage of Purview. Why? For all the same reasons listed above. The beauty though, is that technology and affordability have leveled the playing field, making Purview a product that everyone can take advantage of.

Whether you use Purview now or are thinking about it for the near future, consider all the ways you can use it to maximize its value in each workflow that you integrate it into.

For more about the many valuable uses for an AVM please contact Teranet today by calling 1.855.787.8439.

Mortgage Enforcement Tools and Tips: Lenders Use AVMs to Collect More

We blog a fair amount about automated valuation models (AVMs) and how lenders use them. This is because, while they are widely discussed for being used in the sales, application and credit adjudication stages, AVMs are actually used across many different departments within financial institutions.

AVMs are particularly useful in the area of mortgage collection and enforcement. In collection and enforcement, the more you know about your client and security, the better. Power of sale is not always the best answer and it is better to know enough about the complete picture than to face surprises later.

AVMs help you quickly learn the value of a particular property. While that information is very useful when collecting a debt, some AVM platforms like Purview For Lenders include their AVMs inside a more comprehensive report, so on the collection and enforcement side they are able to:

• Validate addresses
• Validate home ownership information
• View registered mortgages
• View registered liens
• View an estimated property value
• View exterior and aerial imagery and more

Searches can be performed by name or address. Either way you have to know the Land Registry Office that the subject property is located in. If you know the homeowner’s name and not their address, you can still produce a search result.

This is handy to see many different things when you are looking at how you will collect your debt:

• You can use it to locate people who have disappeared – maybe your client owned more than one property.
• You can use it to get an idea regarding the financial positing of a property – maybe after your mortgage your client got subsequent financing.
• You can use it to learn if someone owns a home to enforce a judgement.
• You can use it to estimate equity in a property you have financed that has gone into default – this comes in handy when you are considering instituting a power of sale.
• You can use it to check if a condo has placed a lien on a property or a lien has been placed for unpaid property or income taxes  

Having the answers helps allow you to make some solid decisions about how you are going to go about collecting your money and what role your client’s property will pay in the collection of your debt. This will position you take collection action armed with as much of your client’s true and current financial picture as possible.

For more about the value of an automated valuation model please contact Teranet today by calling 1.855.787.8439.

How is a Property Appraisal Different from an Automated Valuation Model?

In the lending world, a major part of the credit adjudication process is assessing the value of your security. Some lenders use automated valuations, some lenders rely on CMHC’s concurrence with the value stated in the application, and still others will request that an appraisal be performed – whether it be a full appraisal or a drive-by. Some lenders will use all of the above and here is how they are not only different from one another but in many ways complement one another.

AVM + agreement from insurer + appraisal = the most probability that you know what the property you are loaning on is worth. Let’s drill down and take a look at each resource and the nuances.

An automated valuation model, or AVM, is a program which produces a property value derived from mathematical calculations. AVMs are most useful at the application stage because, not only can you validate the property value indicated in the application but you may also learn that the property was not worth the value stated or that it is worth more and an upsell opportunity is present. Because AVMs can generally be produced online they are sometimes pulled multiple times over the course of a mortgage transaction.

If the AVM wasn’t requested at the application stage – it generally will be shortly thereafter as the deal proceeds through the closing process.

If you have requested an AVM and it agrees with the stated value on the application then it is highly likely that the insurer will not dispute the value of the property.

Appraisals involve a certified professional going out to the property, so appraisals can reveal applicants with: properties in very poor condition, undisclosed construction/renovation, rental properties that are listed on the application as principal residences and much, much more. On the flip side, an appraisal can be great for a property that is in excellent condition.

Now, the reason that appraisals complement AVMs is because, while there is some overlap in that both derive a property value, they are very different. An AVM is analytical and based on formulas – it is not swayed by personal opinion, nor does it take into consideration the interior and exterior condition of a property.

So as you can see, while it can seem like the 2 outlined in this blog do the same thing, they actually don’t and leveraging both will see you close more deals and identify more opportunities.

For more about the difference between an AVM and an appraisal please contact Teranet today by calling 1.855.787.8439.

Really Knowing the Housing Market: House Price Indices and You!

In the first part of our 2 part series, “Really Knowing the Housing Market” we discussed what an Automated Valuation Model (AVM) is, types of AVMs, how lenders use these types of AVMs and how to drill down to the micro aspects of real estate values at the level of a property or neighbourhood. In this blog, we will dive deeper into house price indices and how you can know what is happening in the housing market at the macro level.

You likely often see in the news reports about what’s happening in the Canadian real estate market. These report gains and losses in the housing market, expressed as a percentage. This number is usually obtained from known-credible providers of house price indices.

House price indices are indexes that measure the price changes of residential real estate. The numbers produced in the house price indices will vary slightly depending on the data source. This is because different producers of house price indices get their data from different places.

Here are some of the more commonly known house price indices including where there data comes from:

• Teranet National Bank House Price Index – Data comes from property records of public land registries. Where sale price is available, Ontario data is updated regularly and directly from the Province of Ontario's Land Registry Information System (POLARIS) which contains some of the most current and accurate land information available. This product is marketed to and widely used by lenders.

•  MLS Home Price Index – Data comes from the MLS and this index produces home price data on particular homes and neighbourhoods. This is currently marketed as a product for the consumer to use to assess if their property has increased in value.

• Brookfield RPS House Price Index – Brookfield is best known as an appraisal management company, and you can leverage their access to appraisal data to support the development of their house price index

The type of house price index you turn to will depend on your personal needs and how you feel about where the data is coming from and how it is calculated – in terms of the accuracy of the result.

House price indices can help you be more competitive because they can help you to see shifts in the market based on trends and plan accordingly. Using house price indices and AVMs together helps to position you as better informed about everything you need to know about the Canadian housing market.

For more about house price indices and their value please contact Teranet today by calling 1.855.787.8439.

Mortgage Industry Update: OFSI’s B21 Mortgage Regulation and What it Means to You

If you are financing high ratio insured mortgages you are no doubt, on some level, aware of B21. B21 is a set of regulations being proposed by the OSFI (Office of the Superintendent of Financial Institutions) with respect to high ratio mortgage default insurance in Canada.

The purpose of the bill is to see more disclosure and consistency between lenders and mortgage insurers like CMHC.

B21 follows B20, which was introduced last year. You may recall when CMHC announced reducing amortizations to 25 years, adjustments to GDS and TDS ratios and restrictions to maximum LTVs on refinance and secondary financing products. Well, these changes were in direct reaction to B20 which was deployed to combat risky/over-aggressive lending practices.

In fact, the goal of both guidelines was to ensure stability in the market, and to prevent a housing bubble or future recession. It is commonly known that Canadians are carrying record levels of unsecured debt and this ensures that homeowners are forced to finance their homes responsibility and within their means.

According to an article in Rate Supermarket, the new borrower requirements under B21 include:

•  Down payment: more scrutiny will be placed on where down payments come from
•  Eligibility: more scrutiny with respect to eligibility of foreign investors, high risk borrowers and non-residents
• Credit: insurers must directly verify a borrower’s credit history and employment
• Self-employed buyers: an individual process must be set-up for self–employed borrowers
• While these guidelines relate to insurers, the changes will have a trickle-down effect for you, your brokers and their clients. At the end of the day these additional measures will see insurers helping, and not hindering, by forcing them to take extra due diligence measures to reject out mortgages that shouldn’t really be insured in the first place.

More than changes to rules, these changes seem to encourage more due diligence on the part of the insured, which protects our economy and in the end is good for all.

For more information about B21 and its impacts please contact Teranet today by calling 1.855.787.8439.

TDCT Show the Competition They are Ready to Compete for the Broker Channel Market

Broker dependent lenders listen up, because if your business largely relies on business from the Broker Channel Market, paying attention to developments like the ones reported this past month in the Mortgage Brokers News will help you see ways that you can compete.

Look at TDCT. According to the article, TDCT captured 8.7% of the broker market but is poised to see that number increase with the introduction of the outsourcing of its broker underwriting to First National after recognizing that First National’s systems are able to generate approvals in hours vs. the days it would take TDCT’s old system to turn around and approve.

This move instantly makes TDCT that much more competitive because:

·         It and its brokers will benefit from a new online broker portal which tracks application statuses

·         Clients will no longer be directed to branches to close their deals

·         TDCT will be able to instruct deals far faster in the process because all conditions won’t have to be satisfied in order to instruct

·         Buy-downs will now be able to be deducted from the broker’s commission

What is interesting about this story is not only TDCT and the individual changes themselves, but also about TDCT taking a leap to innovate to improve services. Quite an admirable step which shows that the execs at TDCT are seeing the cost benefit to resolving inefficiencies and providing a better service.

Many financial institutions lose sight of the fact that technology and process issues can drag down production which costs millions, if not more. In this instance, TDCT recognized that they needed to make the customer experience better for its brokers and saw that their technical limitations would prevent that. Inefficient underwriting systems is a great example of an area where a FIs failure to provide can make them less competitive.

If you were to audit your underwriting department, what might you find when looking at the following?:

·         How many different platforms you are using to perform different tasks?

·         What costly issues could be resolved through new technology?

·         What tasks could be streamlined using technology?

·         The speed at which you turn around applications and what steps in the process cause slowdowns?

·         Finding out more about an applicant and property at the application stage leading to smoother closings.

Take the time, like TDCT did, to find out what pain-points exist for your clients, and you will quickly identify measures you can put in place to not just make your customers happy, but to delight them.

For more about creating efficiency when underwriting please contact Teranet today by calling 1.855.787.8439. 

Really Knowing the Ontario Housing Market: Ontario Mortgage Insights (OMI)

Lenders who want to be competitive and keep receivables low must take the time to really know what is happening in the housing markets within which they lend. We have written a series of blogs about really knowing the housing market, but this blog focuses on particular insights that at the moment are only available in Ontario.

Just as automated valuation models and house price indices are excellent tools that can be used in many different areas within a financial institution, Ontario Mortgage Insights is a valuable tool for keeping your finger on the pulse of the Ontario housing market.

Ontario Mortgage Insights reports on housing data and provides lenders with market trend reports by month and geographical location relating to sales, mortgages and home equity.

Access OMI Strategic Monitor Reports for key competitive intelligence:

• Measure your outcomes against those of your competitors through data on mortgages, equity and mortgage switches by institution, area and date.
• Optimize resource allocation and sales effectiveness by tracking your performance in different regions and even neighbourhoods.
• Optimize marketing by identifying strong markets and assessing your market penetration.

It is primarily used by lenders to gain competitive intelligence and optimize resource allocation and marketing accordingly.

Ontario Market Insights has broad use within many different departments within a financial institution.

• Some lenders use OMI in the area of risk management using it to measure activity against that of the competition, analyze lending regions, adjust lending practices according to geographical risk exposure and more…
• Other lenders use OMI to support business development initiatives by accessing key information about competition, understand market shares, and allocate business development resources according to regions that show the most promise.
• Lenders also use OMI to support marketing because they can measure the market penetration of products, identify hot and emerging markets, see where they are gaining and losing market share, allocate marketing resources accordingly and finally track and analyze results.

The above is only possible because of all of the market data included in the OMI.

Market trend data includes: sales of properties and values of transfers, number of home sales, total value of sales, mortgages registered, value of mortgages, home equity in properties, turnover rate in a particular area and more…

Strategic monitoring data includes: estimates of market penetration, registered mortgages, equity on properties, mortgage switches and more…

Ontario Mortgage Insights goes a long way to keep you in the loop of what’s happening in the Ontario housing market and specifically insights that lead to you being more competitive.

Don’t miss any opportunity to become more competitive. Contact Purview For Lenders today to find out more about OMI and other tools to make you more efficient: 1.855.787.8439.