Valuation modernization isn’t just a compliance checkbox; and waiting until the deadline could be costly. Allison LaForgia sits down with Sage Nichols, SVP of Collateral Solutions at Cotality, to discuss why lenders, underwriters and appraisers must embrace valuation modernization now. Nichols deep dives into UAD 3.6 and how Cotality is partnering with lenders with innovative collateral solutions that transform lenders’ and appraisers’ workflows.
Sage breaks down how Cotality’s Collateral Investigate and Collateral Expert tools serve as a safety net, ensuring compliance, reducing risk and empowering data-driven decisions. Beyond operational efficiency, these solutions enhance the borrower experience, making approvals faster, more transparent, and consistent. This conversation explores what this modernization means for the future of lending.
00:00I'm Allison LaGorgia, Managing Editor of HousingWire's Content Studio, and I am with a very special person from Coatality today.
00:17I'm with Sage Nichols, who is the Senior Vice President of Collateral Solutions.
00:21Sage, thank you so much for joining me today.
00:22Thank you for having me. Happy to be here.
00:24So, let's start with your role at Coatality, and how Coatality's work is shaping the broader conversation of valuation modernization.
00:34Thank you. Yeah, it's just such an exciting time, I think, from a couple of different angles.
00:39Within the industry, there is such a seismic change happening in valuation.
00:45And I think it's setting the stage for leading to real change and transformation to come.
00:52And so, being a part of that with the team is, and we'll talk a little bit more about that, is really just a great opportunity.
00:59And I think from another angle, being part of Coatality right now, not just from leading the market,
01:06but also with the transformation we're going through is something that's important, and I think it's an important part of the conversation.
01:14And I think you know that we rebranded from CoreLogic to Coatality earlier this year.
01:21And a lot of people ask, you know, what is that all about? What does the name mean?
01:27And for me personally, it's just representative of who we are as an organization going forward.
01:33And if you look at the name, if you don't mind me kind of sidebarring on this for a little bit.
01:37No, tell us about it.
01:38If you look at the name, because a lot of people say, okay, where did that come from? What does it mean?
01:42The Coat does have a nod to CoreLogic.
01:44CoreLogic, but it's really the combination of three words that we're anchored on.
01:51And so collaborate, totality, and vitality.
01:55And collaborate is, you know, how we partner with our clients, how we're working with the industry, it's relationships.
02:00And totality is two things.
02:04The comprehensive nature, like we want to have an integrated, holistic strategy across totality and how we're working with the industry.
02:13But it's also the comprehensive nature of our property data.
02:17So you've got 25,000 data sources and information on 155 million different parcels.
02:22Because the totality of that, I think, is a really important part of who we are going forward.
02:27And then the last one, which is my favorite, is vitality.
02:30And that's really representing that properties are about communities.
02:35And they're about people at the end of the day.
02:37And so what we're doing is impacting where people live and the communities they're building.
02:42And so that vitality is really about bringing life to it.
02:46So anyway, circling back to your question, in my role leading collateral solutions and with valuation modernization, which is when you think about the new UAD36, that's really how we're looking at it.
02:58Is this is setting the foundation for valuation modernization.
03:02And our view is really that we can reimagine the whole ecosystem.
03:06We can kind of step back and say, how is this part of the process working today?
03:11How does it need to work in the future?
03:14And how do we lead our clients through what can be a really transformative thing for the industry that's all about making it better for the consumer at the end of the day?
03:26It sounds like not only there's been this transformation that totality has gone through, really bridging together those three words.
03:34But it sort of ties in perfectly to this conversation about valuation modernization, because, as you mentioned, we have this seismic shift right on the horizon.
03:43So with UAD 3.6 changes right on the horizon, why should people be worried or considering this now instead of waiting until that deadline gets a little closer?
03:54Yeah, I think it's such it's so comprehensive.
03:57If you look at the ecosystem, you're not it's shifting from forms to data.
04:06And that seems really simple on the surface.
04:08But when you look at it, and that's a great thing, by the way, right, because it sets the foundation for a lot of different things that can now happen whenever you get data.
04:17And, you know, that's just a better foundation to build upon.
04:33And that ecosystem needs to be well orchestrated to be able to be ready.
04:39And so we're really focused on how do we partner across the ecosystem?
04:43How do we partner with our clients?
04:45And it's all about confidently managing this migration for our customers.
04:51So I'm going to put you on the spot here.
04:53So one of the things that I think we hear is a challenge for people and lenders specifically is that they feel unprepared for the workflow changes.
05:03So how does Cutality position itself as a partner, like you just mentioned, for all of the people that this actually affects, the lenders, the appraisers, the underwriters, so that they can navigate the shift successfully and confidently?
05:18So, you know, we really sit in the middle of a lot of the ecosystem.
05:23And our systems, if you look at the core of what they do, it's really about workflow automation and confidence.
05:29I mean, it's acceleration and confidence are the two words that come to mind.
05:34And with that, you've got systems built on very kind of intelligent automation around rules and configurations.
05:42And that's important when you look at something like UAD and why we think about it as valuation modernization,
05:48because when you have that type of flexibility and the ability to orchestrate how workflow is happening,
05:56and you're partnered with the loan origination systems, you're partnered with the providers,
06:01as long as we're all collaborating and connecting on how we're going to do it and when we're going to do it,
06:08then I think the lenders, they certainly need to have a strategy.
06:12The lenders need to, you know, be setting timeframes.
06:14They need to be talking to all of their partners.
06:17But because we're working across the ecosystem to coordinate, that confidence should be there.
06:25We just need to make sure that we can persevere through that change management process because it is a big change.
06:31It is. It is.
06:32And now my understanding of this is that Crotality has introduced solutions like Collateral Investigate and Collateral Expert
06:41to guide users through this modernization shift.
06:45Can you walk us through how these tools act as sort of a safety net or even guide rails for net compliance,
06:54risk mitigation, and the decision-making aspect that we're talking about here?
06:58Yes. I'm smiling because I'm super excited.
07:00We're actually launching Collateral Investigate right now, which is in advance of UAD.
07:07And, you know, think about Collateral Investigate as a comprehensive rules and review system.
07:13And it's all based on data and orchestration of rules around that data.
07:21And so this isn't something new to us, actually.
07:24You know, our platforms and the components of it around review have been foundational for us for many years.
07:32Okay.
07:33But when you do something like UAD, it opens up, you know, while the hood is up, it really gives you the opportunity to modernize how a lot of things work.
07:43And it also gave us the opportunity to step back and say, okay, wow, what could review look like in the future?
07:48And that's really comprehensive, but for evaluation specifically, when we're talking about UAD, you know, we said, let's take that foundation that we have and let's build on it when it comes to intelligent automation.
08:02And taking that data and taking all the data that we have across totality to give that level of confidence and not only accelerate the process because you're using data-driven workflow, but confidence.
08:14It's acceleration with confidence.
08:16And Collateral Investigate is an opportunity for us to do that with the new UAD.
08:21And we're super excited about it.
08:22So I feel like there's this misperception, perhaps, that this is something that really only affects lenders.
08:30And that's very much not the case.
08:32This is something that also has an effect on the borrower.
08:34So can you walk me through what the impact is on the borrower experience and how totality's approach to improve the borrower experience by making the process, as you just mentioned, faster, more secure, and more transparent, which we know is more important to that borrower now than it ever has been?
08:55That's right.
08:55And I think it's, you know, the saying always, I'm going to botch it, but it's, these things can't exist independently.
09:00You have to have the combination.
09:02And so at the end of the day, like we talked about with the vitality as far as totality, we're here for the borrowers.
09:08We're here for homeowners.
09:10And if this process, as we get to, you know, data and automation is great, but it's only great if it results in the outcomes that give that confidence and clarity to the homeowner.
09:22Do they care about speed?
09:23Sure.
09:24People always want things to happen faster.
09:26That's a great part of it.
09:27But really the confidence and comfort in the process, because this is their biggest asset.
09:32Absolutely.
09:33And this can be a very scary process, right?
09:37You're giving a lot of information to the people that you're working with, and you sort of have some hopes and dreams tied up into this.
09:42So the way that the borrower feels is pretty important.
09:46So it seems like quotality has both the lender, the appraiser, the underwriter, and the borrower in mind.
09:53Yeah, no, I think that's absolutely true.
09:55And we did a study recently around homeowner sentiment, and the biggest finding was that what people are looking for when they buy a home is comfort.
10:05And I love that word because I think it represents, it's not just speed, it's not just accuracy, it's not just risk mitigation.
10:11It's all of those things come together to give a level of comfort.
10:16And so that's how I like to think about, you know, this opportunity we have for modernization is about delivering those things in a package that ultimately turns out that way.
10:24So it seems like quotality is giving the industry two solutions, collateral investigate and collateral expert, to deliver that comfort, right?
10:34So we have this new seismic shift on the horizon.
10:39How do you urge people to test early in UAT to get used to this before we have this deadline looming, right?
10:48And what is the risk of waiting and not testing early?
10:51It's a big topic right now, and it's really where we're putting a lot of our focus is on, you know, the technology work is one thing,
10:57but I think a lot of the real ability to have success is based on the migration and the change management
11:04and doing that in a very well orchestrated and organized way, and that means early testing.
11:10That means everybody kind of understanding the time frame, and the earlier we all start getting in there
11:16and understanding the workflow and the impact, there's likely going to be unexpected things along the way.
11:24And how can we discover those early?
11:25And we also want to make sure that everybody's not just waiting until the end.
11:29The earlier we start testing and we get sequenced, the better we're all going to be able to manage the process.
11:34And so, you know, with a change like this, it's just the earlier we're able to do it, the better.
11:40So, Sage, it seems like there's a lot on the horizon for quotality and things that you, I mean, new products rolling out as we speak.
11:47So talk to me a little bit about the future and how you see calculation, modernization,
11:52and even quotality's data-driven approach that you guys are so well known for, reshaping the industry and then the next few years.
12:00And what opportunities do you think that this creates for the industry?
12:04I think we're at a pivotal point as an industry, and I think that's for a couple of reasons.
12:08With valuation specifically, and I think this is way bigger than just valuation,
12:11there's this transformation potentially happening with valuation modernization being the start.
12:18But if you look at the way technology is evolving and you look at the friction points in the process,
12:25and that's really what it's about, is taking those friction points out.
12:29I think we can step back and look at why things are happening in such a linear fashion
12:33and say, why can't these things happen at the same time?
12:36Why can't we use this data to drive this process?
12:39And when you look at Cotality, and we're touching the realtors, we're touching brokers,
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