Here’s how CSS saved one of its lender customers $500k / year on valuation costs

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 valuation product that performs particularly well in rural areas, saving $185 per loan.

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The lender was paying for a hybrid valuation 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 valuation product that still met their underwriting requirements, saving $80 per loan.

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The customer was paying for a hybrid valuation 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 valuation products 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 valuation 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 valuation products to find the best fit.

When you think about your loan origination process

Do any of the following apply to you? 

1

Are you using full appraisals for all of your home equity loans?

2

Are you starting with AVMs, then jumping straight to full appraisals without using any hybrid appraisal products?

3

Do you rely on only one hybrid valuation product rather than using a suite of products that are tailored to the geography and risk profile of each loan?

4

If you do use multiple hybrid valuation products, do you have to manage those products in house rather than relying on a third-party partner to manage them for you?

If you answered yes to any of the above questions, CSS is here to help.

Contact us today for a free analysis of your valuation strategy to see how much money we can save you on every loan.  

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