Byte Software, part of CBC Companies, Columbus, Ohio and BuildFax, a division of BUILDERadius, have announced a partnership that will make BuildFax's Building Permit Database available to users of the Byte's BytePro Loan Origination System (LOS). The companies say giving lenders access to this data will improve loan quality by giving them the ability to quickly verify property improvements.
BuildFax says it provides insight into pending and completed property improvements and condition not found in tax assessor data. Further, the company maintains that this information can be highly beneficial to lenders as they work to validate loan value and more than 400 lenders already use BuildFax data in their loan approval and quality control processes. Furthermore, the companies claim that this data will allow "lenders to easily comply with emerging Uniform Appraisal Dataset (UAD) requirements."
“We are pleased to partner with BuildFax to offer our clients access to this incredibly rich dataset,” said Joe Herb, General Manager of Byte Software. “The interface will help lenders complete these essential validations quickly, enhancing underwriting and improving their customer’s experience.”
“Lenders tell us all the time that building permit data helps them validate that a value-changing improvement was done to the subject property – a major benefit in this market environment,” said Holly Tachovsky, President of BuildFax. “Now I can tell those very same lenders, Byte and BuildFax have teamed up to make it easier for lenders to access this data by integrating with BytePro. The interface enables lenders to easily validate the property improvements andconditions on every loan. As a result, lenders can confidently say ‘yes’ to more loans, more often.”
Quality control and due diligence are at the top of the list for lenders in this environment. Having more information during the data verification process can only help. I'm not convinced it will make the GSE's UAD compliance any easier as that's more about the dataset and less about the information, at least for now.
The big problem is that lenders don't have enough really good underwriters and loan processors now. All they've done is crack up the big knob on the side of the automated underwriting engines until the relatively few loans that sneak through are already high quality. What will they do with acess to a permit database if they don't have someone to comb through it and hope that the homeowner actually took out a permit for the home improvement they say they made. Seems like something like this would be of more benefit to valuation professionals performing Desktop Appraisals than front line LOs and their processors.
But I will admit that, in general, more information is never a bad thing. Unless you're drowning in data, which today's lenders and servicers are. We'll watch this story for more news of the benefits this partnership is offering front line LOs and their teams.