Friday, September 16, 2005

eAppraiseIT: Lenders outsourcing PMI release

According to real estate valuation firm eAppraiseIT, more lenders are outsourcing the task of helping borrowers cancel their private mortgage insurance (PMI). To date this year, eAppraiseIT, on behalf of servicers, has processed more than 10,000 requests from consumers to cancel their mortgage insurance.

The task involves fielding calls from borrowers, helping them understand the lender's policy and, checking their homes actual value and, if they are a candidate, helping them cancel their PMI.

According to senior vice president of valuation consulting Diane Valadez, “eAppraiseIT has been providing PMI release services to mortgage servicers on an outsourced basis since 2002, but we have noticed a 110 percent increase in usage this year.”

Why the increase? That's part of...

What's not in the release: "Rates are more stable now," Valadez said. "Loans are on the books longer. As the refinance rate continues to fall, more loans are more likely to release PMI."

Which is good for eAppraiseIT's business. But according to Valadez, that's also good for consumers. She says that only about 35% of the borrowers actually go ahead and pay for an appraisal once they fully understand the process and requirements. That saves them money when they wouldn't have qualified, she points out.

Meanwhile, outsourcing is saving mortgage servicers money, too. Companies have accepted the idea that new technologies make it easier to outsource effectively, but Valadez says eAppraiseIT goes beyond that by saving lenders up to 50% of what it would have cost them to do the work themselves and then doing it in half the time.

And another thing: PMI release may not be a task that many people outside of a PMI firm or a servicing specialist might think of as an outsourcing opportunity, but it's an excellent opportunity to increase customer satisfaction. Consumers have a lot of questions here. By routing these calls to a professional staff trained to deal with the problem, more customers will feel better served.