Story by Sarah Wheeler for HousingWire
Editor in Chief Sarah Wheeler sat down with Kenon Chen, executive vice president of strategy and growth at Clear Capital, to talk about appraisal modernization and how technology is just part of the solution.
Sarah Wheeler: What are some of the biggest challenges right now?
Kenon Chen: The challenge that’s in front of everyone continues to be the market itself, and then housing affordability. With mortgage rates continuing to remain high and home prices remaining high because of low supply, we’ve had another year of a reduced market. It’s difficult for lenders who don’t have a lot of extra cash to invest in making big changes right now — they need to stay focused on running their business in a smart way. But that’s why I think it’s really on solution providers like us to run ahead and create great opportunities that don’t require a lot of extra work and time and investment.
For us that means really simple APIs that are easy to integrate with, providing flexible options for how lenders can consume the products. That’s also making sure we’re partnering with the ecosystem to solve problems before the lender even asks for it and working with partners to make sure they can consume these products within the solutions they’re already using. That’s been a big part of the focus: getting the whole ecosystem to work together better so it doesn’t put all the onus on lenders to have to integrate a lot of different places to just get one solution together.
SW: How are appraisers adapting to some of these challenges, including new rules on valuations from the GSEs?
KC: Change is always hard. The GSEs implemented a number of policy changes that are an evolution from what appraisal has been for decades. So now we have multiple risk-based options: waivers, waiver plus property data, desktop appraisals, hybrid. Lenders and appraisal companies have a lot more menu options and their tech choices have to take them down the right path.
We’ve invested in the property data collection process and scaled it for a national level with mobile tech to capture all of the data right at the site. We’re using computer vision, AI, to capture the whole property into the space. We’re creating a digital twin and bringing the property into the digital realm, building a formation model and driving from that place as opposed to starting from a clipboard.
That’s required changes for everyone involved and we’ve been rolling that out as the market change happened at the same time. We see lenders really looking to the future and preparing for when volume returns — investing now to have a competitive edge in the future.