Since embarking on our journey in 2001, we’ve held on to the belief that focusing on our customers’ success leads to greater impact on the entire mortgage industry. To that end, we’ve surrounded ourselves with uncompromisingly nice people, including a network of passionate professionals and companies that live by our motto — go wherever it leads, do whatever it takes.
And we’re just getting started.
As Clear Capital celebrates its 20th anniversary, we wanted to take a step back and reflect not only on the wonderful opportunities we’ve had to make an impact, but also on how far our industry has advanced when it comes to innovation and doing the right thing to make people’s lives better.
To do this, we sat down with our CEO, Duane Andrews, to get his perspective on the successes — and the challenges — of the past 20 years.
How is the industry different now than it was 20 years ago when Clear Capital was founded?
Duane: When we founded Clear Capital in 2001, we didn’t anticipate the magnitude of the housing crisis that was to follow only seven years later — an event that massively changed the mortgage industry as we knew it. Since then, regulation has increased exponentially. The rise of AMCs, Appraiser Independence Requirements, and regulated appraisal fees have had a profound impact on the way lenders order and manage valuations.
Looking back, if there’s a silver lining to the financial crisis, it’s the evolution of the way we in the industry think — our view of mortgage risk, our appreciation of one another, and our resolve to do the right thing for the long haul.
For more than a decade now, this way of thinking has driven an increased openness to explore innovative solutions, especially given the advancement of technology. We’ve witnessed and have been part of the rise of fintech and proptech. New technologies, such as mobile technology, the advent of cloud computing and artificial intelligence — paired with the overall availability of data — have opened up amazing possibilities in property data collection. Twenty years ago, it was difficult to convince customers to trust applications on a web browser. Now, we see increased adoption of technologies that lower costs and speed up the mortgage process, while actually reducing mortgage risk.
With the exponential increase in the availability of data and processing power, the risks continue to be increasingly quantifiable. Not only are borrowers benefitting, lenders and mortgage investors are, too.
What has been the most surprising change over the past two decades?
Duane: Actually, the most surprising change is very recent. There’s been a movement around spotlighting social inequities. And the mortgage industry has been just as impacted by that movement as any other industry. Over the past year and a half or so, there’s been a willingness and sense of urgency to engage in the discussion around racial discrimination and housing gaps.
Historical policies like redlining used to be viewed as “the ugly past” that no one wanted to talk about. But now, multiple companies and organizations across the industry are discussing how to do things better for the future — how to focus on setting standards and generating solutions so that no one is left behind when it comes to achieving a milestone as big as purchasing a home.
I welcome the shift and I’m glad we’re having active conversations about making things right for everyone.
As far as technology goes, what has been the most exciting and productive advancement over the past two decades?
Duane: While some might argue that people these days are on their phones way too much, mobile phone innovation has certainly been a game-changer for our industry. It has changed the way properties are inspected and how work is assigned.
We’re now seeing the incorporation of machine learning and LiDAR directly into mobile phones. [LiDAR, or light detection and ranging, is a technology that measures depth through pulses of light.] Twenty years ago, no one imagined that anyone with a smartphone could complete a walk-through of a home with technology that produces a highly-precise floor plan sketch, and calculates gross living area aligned with American National Standards Institute (ANSI) standards.
When we started, leaders in the valuation space were proud of how many fax machines they could procure to deliver BPOs. It’s astonishing just how far we’ve come.
Let’s talk about people. What have you learned about recruitment over the last 20 years, as Clear Capital has grown? And, what do you look for the most in new talent?
Duane: Our goal for our team has remained a constant over the past 20 years, and that is to bring on genuine, talented people who embrace our core values and care about our customers and each other.
What has evolved is our laser-focus. What I mean by that is, as we’ve grown and become more relied upon by our industry, we’ve appreciated bringing on talent with proven and specific expertise in their field (appraisers, data scientists, etc.). We still love to grow talent from the ground up whenever possible, but we balance that with outside experience.
We have more than 1,400 teammates now, and I’m proud of what we’ve achieved together.
What have been your greatest achievements? Challenges?
Duane: I think our greatest achievement has also been one of our biggest challenges — staying true to ourselves. What we’ve demonstrated across our organization is that it is possible to grow a company by building great relationships first — relationships with people and organizations who care about helping others first — and knowing that success will follow.
Our path hasn’t been the most flashy, VC-driven route, perhaps, but we’re okay with that because we’d rather focus on our long-term, positive impact. And that’s to improve the lives of the people around us.
What would you consider the industry’s greatest achievement and current challenge?
Duane: As alluded to earlier, rebounding from the housing crisis while increasing the quality of loans has been a huge achievement for the industry. It’s been amazing to see all the moving pieces that have been put in place to reduce risk while learning from previous mistakes.
In addition, over the past year and a half, the industry’s rapid and coordinated adaptation to the challenges of the COVID-19 pandemic was no less impressive. The GSEs and other leaders did an incredible job of quickly modifying their requirements to continue mortgage lending while simultaneously managing investor risk.
On the flip side, the pandemic has not come without challenges. But arguably the biggest challenge we are up against now is finding meaningful and sustainable solutions to reduce inequity in housing and valuation. This issue is vast, complex, and filled with political minefields, but our team believes — like many others in the industry — that it’s very worth tackling for the sake of every possible homeowner and community.
What are the trends you’re most interested in or excited about right now?
Duane: Without a doubt, the trend that excites me most is the use of computer vision and photo AI in the valuation space. People love voice-to-text technology. But we’re going beyond that with our ability to convert images to text.
With this technology, the possibilities are endless. But to us, the progress toward an automated understanding of property condition and quality is most exciting. I rarely like to toot our own horn, but with rich data on 150 million properties, we’re well-positioned to take full advantage of this trend.
What are your predictions for the next decade?
Duane: It’s never easy to predict the future. I mean, look at all that’s happened with the global pandemic. But looking into my crystal ball, I see homeowners playing a much bigger role in providing data for lending decision-making, especially given the advancement in mobile technology and, in part, the practices adopted during stay-at-home orders. Obtaining a traditional appraisal is a process that’s been hard to understand for many, but the appraisal process will shift and homeowners will contribute more to the appraisal process at their convenience.
Ultimately, I see consumers having more power over their own financial picture, and their digital wallet will allow them to understand upfront what loans they’re qualified for before the loan application process even starts.
A closing word?
Duane: We’re grateful for the obstacles and the successes over the past 20 years of Clear Capital, and even more importantly, we’re grateful for our employees, partners, and our customers who have joined our journey toward solving the industry’s most pressing challenges.
We’ve only scratched the surface when it comes to impacting the U.S. housing market. We’ll continue to reinvest in our team, reinvest in our network, and reinvest in our technologies to make further advancements in the home valuation process. Wherever it leads, whatever it takes® — that’s our motto, and we’ll always stand by it.
