Issue link: http://dsnews.uberflip.com/i/1513140
MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 36 December 2023 C O V E R S T O R Y involvement in the valuation process, we have already seen the benefits of AI and ML in the appraisal space. Since the introduction of the Uniform Appraisal Dataset standards in 2015, we have been digitally gathering appraisal data as part of our mortgage acquisition process. These data include photographs of the subject and comparable properties used in the property valuation process, which are typically unlabeled image files linked to the appraisal document. Recently, Fannie Mae trained three deep-learning models using more than 200,000 labeled images by experienced reviewers and moved to production of these computer vision models. Using these models, we have evaluated two billion property images, and every day, we are scoring four million more such images. As a result, we have been able to incorporate this image-recognition technology into our internal Collateral Insight tool to display property images for subject and compara- ble sales side-by-side for easy comparison of a given room type. This tool enhancement saves the time of our Appraisal Quality Control reviewers, improving their efficacy and further automating their processing. We also introduced an appraisal text-scanning review process in 2021. With it, we used a combination of natural lan- guage processing and machine learning to scan the commentary sections of millions of appraisal reports for prohibited and subjective terms including references to race, ethnicity, or religion, and eliminate false positives to ensure these results are accurate and timely reviewed. We then sent letters to every appraiser who had multiple findings, reminding them that such language may be evidence of a non-objective valuation process or dis- criminatory bias. We repeated our text-scanning process in 2022, and the results were encouraging, as 78.6% of the appraisers who received a letter in 2021 had no new text findings on appraisals submitted after the letter date. The total number of appraisers with findings declined from 3,193 to 1,557, and the overall rate of appraisal reports with findings decreased from 0.15% to 0.11%. While we continue to enhance the technology that supports our appraisal text-scanning review process, this is just one illustration of how technology has the potential to improve valuation accuracy, reduce discretion in the valuation process, prevent human error, and better detect mis-valuation. Q: Do you feel an industry expansion or contraction lies ahead in 2024? Merritt: A small expansion is the most likely outcome in 2024. I think we will continue to see consolidation across the industry with the headwinds we are facing. Obradovich: Given the recent inflation data, it appears the FOMC will no longer need to keep raising interest rates, which will allow the housing market to slowly adjust to a new reality. If rates fall further from here, the market may expand in 2024, given its current trajectory and the fact that demand continues to grow at a greater rate than supply. If inflation unexpectedly continues to rise for some reason, then the FOMC will be forced to slow the economy down much more aggressively, and that could hurt market expansion. Smith: A contraction. Capacity still needs to be right-sized, and the higher-for-longer interest rate environment, together with a lack of inventory, will force that to happen. I think it will occur through mergers and acquisitions, companies finishing their pipelines and locking the door, and mortgage professionals self-selecting out and moving to a different industry. Q: As the need arises for skilled professionals in the mortgage space, what incentives are being offered to retain these valued individuals and attract them to your company? Austin: The incentive to come to Carrington Mortgage Services, as well as our ability to retain current talent, is the company itself. We are, first and foremost, an asset manager, which has allowed us to grow to over $144 billion of servicing balance. Carrington provides its associates with the stability others do not offer. Associates are not working at just another monoline mortgage lender. We have multiple business revenue streams. Beyond that, we offer a wide range of FHA, VA, USDA, GSE, and non-QM products. Bolton: This is a challenge in an environment where banks need to focus on capital and nonbanks are focusing on liquidity. With revenue being stressed, institutions will default to expense reductions to keep efficiency ratios in line. So, there isn't a lot of excess money for retention packages, etc., which will default to ensuring your compensation programs are recognizing high performers and ensuring they are rewarded appropriately. Merritt: Talent is the primary focus of our organization, both from a recruitment and retention standpoint. We are focused on protecting our positive culture, and our mission of delivering for our customers by investing in the right technology and tools, creating development and enrichment opportunities, and flexible work arrangements for our employees. We believe that engaged and motivated employees deliver better service, which leads to happier customers. Wells: Competitive salaries, benefits, and perks remain important, but team member retention starts with finding the right people. Filling our organization with team members who exemplify Cornerstone's culture of service and excellence helps us maintain a happy and productive environment. When team members want to come to work and be part of the team, they stay happy, collaborative, and engaged. From there, we champion team members who demonstrate Cornerstone Servicing's mission to make a positive difference for others by recognizing their successes and investing in their growth. Offering ongoing opportunities for mobility and incentive programs structured around our shared, organizational goals is very impactful for us. Williamson: Fannie Mae employees are driven by our mission to advance equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. Every day, our employees are working on complex policies, programs, and solutions