Top Insights
- ICE acquires Black Knight and offers lenders a complete mortgage lifecycle solution.
- Market pick-up expected in late 2024 with strong growth in 2025.
- GSE revamps UAD and standardizes appraisal data with a new single form in late 2025/2026.
- PSDK, the older integration tool for Encompass, is being phased out (sunset in Oct 2025) in favor of the newer and more advanced Encompass Partner Connect (EPC).
The recent ICE Experience 2024 brought together industry leaders and innovators to chart the course for the future of mortgages.
Here at ValueLink Software, we were excited to be a part of the conversation, showcasing our industry-leading appraisal management platform and connecting with some brilliant minds in the mortgage landscape.
Let’s unpack some key takeaways that were the highlight of ICE Experience 24, that will shape the mortgage landscape in the exciting months ahead.
Automation and Generative AI
This year was all about leveraging automation to streamline the mortgage process, slash costs, and ultimately improve the experience for borrowers.
The core message? Automation is about creating a streamlined, tech-driven experience, while still maintaining that crucial human connection for borrowers. Mortgage automation solutions will empower lenders, servicers, and originators to:
- Reduce processing times and eliminate errors by automating repetitive tasks.
- Allow staff to focus on building relationships with borrowers and providing exceptional customer service.
- Develop personalized communication plans to keep borrowers informed and engaged throughout the mortgage process, fostering trust and loyalty.
As far as AI is concerned, executives echoed their optimism about AI as a tool for efficiency and growth. However, they also acknowledged the need for a long-term perspective and willingness to take risks, as meaningful AI applications often require significant investment.
ICE’s Acquisition of Black Knight
The acquisition of Black Knight by ICE Mortgage Solutions was another key highlight of the event. Here’s what this means for the industry:
- Strategic Importance: This acquisition allows ICE to offer a more complete suite of services for the entire mortgage lifecycle by leveraging Black Knight’s data and analytics expertise.
- Benefits for Lenders & Servicers: Gain valuable insights into homeowners and potential buyers, empowering them to create a more informed and engaging experience for their customers throughout the loan process.
- Complete Mortgage Journey: The combined company offers a comprehensive solution encompassing real estate, loan servicing, and origination.
Cautious Optimism for the Industry Outlook
While acknowledging the recent market slowdown, the overall sentiment at the conference leaned towards cautious optimism. Many participants were looking forward to:
- A Pick-Up in Originations: The anticipated decrease in interest rates by the Federal Reserve is expected to reignite loan applications in the latter half of 2024.
- A Robust 2025: With a more stable market and a confidence boost among consumers, the industry is poised for significant growth next year.
- Refinance Activity: Though interest rates are expected to fall in the future, refinance activity is unlikely to pick up as people are locked in with their current low mortgage rates (around 2%) – unless the rates go down significantly.
- The Arrival of Gen Z: Unlike previous generations, this younger lot of homebuyers may enter the housing market with different priorities and financial realities. This influx of young adults will necessitate innovative solutions from lenders and a renewed focus on affordability and accessibility.
Encompass Partner Connect Upgraded
Encompass Partner Connect (EPC) APIs are receiving major upgrades:
- Enhanced Functionality: The Encompass Partner Connect APIs will offer even greater functionality with enhanced conditions and tasks, offering fast high-quality appraisals.
- EPC Replacing PSDK: The older PSDK integration system is being phased out, with a complete sunset by October 2025. Lenders using PSDK will need to migrate to EPC entirely. (Currently, only 60% of Encompass users have made the switch).
GSE Uniform Appraisal Dataset (UAD) Redesign & Appraisal Modernisation
The GSEs’ plan to redesign the UAD was another topic of discussion. Expected to be implemented in late 2025 or sometime in 2026, this initiative aims to standardize appraisal data and improve its overall quality. Here’s a breakdown of the key changes and their impact:
- Replacing Multiple Forms With A Single Dynamic Form: This will streamline the appraisal process and ensure more consistent data collection.
- Focus On Discrete Data Points: Less emphasis will be placed on free-form text descriptions, leading to more structured information.
- Impact on lenders: Adjustments to appraisal ordering, disclosure, and Loan Origination Systems (LOS) might be necessary.
The event also highlighted the following trends related to appraisal modernization:
- Gradual Adoption of Modern Valuation Tools: The use of modern valuation tools within the industry is steadily increasing to simplify the loan process.
- Growth of Modern Valuation Products: The adoption of modern valuation products is expected to continue growing over the next two years, offering alternative and more effective appraisal options.
- Focus on Eliminating Appraisal Bias: The industry is placing a strong emphasis on developing solutions to minimize bias in the appraisal process.
Embracing Change for a Brighter Future
ICE Experience 2024 painted a clear picture: the mortgage industry is on the cusp of transformation. By embracing automation and data-driven workflows, lenders and appraisers can position themselves for success in the coming years.
The future is bright for those who embrace change. At ValueLink Software, we’re ready to help you navigate the exciting road ahead. Stay tuned for further insights!
