Reggora says it will cover mortgage repurchases and LLPA losses due to appraisal errors

October 16, 2024

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Reggora CEO Brian Zitin said his company wants to help mortgage lenders by eliminating the need to manually underwrite most appraisals.

Appraisal management software company Reggora is adding a repurchase and loan price adjustment guarantee (LLPA) to its appraisal rating solution.

The valuation technology company said it will cover any financial loss associated with a repurchase or LLPA adjustment due to an error in judgment. Reggora is believed to be the first company to do this based on the results of its assessment technology, Reggora Appraisal Review.

In a statement on Wednesday, Reggora – a HousingWire Tech 100 winner – said approximately 70% of a mortgage lender’s appraisals qualify for the guarantee. This allows lenders to eliminate manual underwriting reviews for the majority of appraisals without additional risk.

“As the mortgage industry prepares for an increase in volume, we wanted to help lenders handle that volume much more efficiently,” said Brian Zitin, CEO of Reggora. “Eliminating the need to manually underwrite the vast majority of appraisals goes far beyond a technological improvement and truly allows lenders to close loans faster at a lower cost.”

Repurchase requests for loans from government-sponsored enterprises Fannie Mae And Freddie Mac have been a lengthy and expensive proposition for lenders.

Sellers’ repurchases of Freddie Mac mortgages rose to $430 million in the second quarter of 2024, up 29.1% from the first quarter, according to an analysis of public filings from Within mortgage financing. In contrast, loan sellers through Fannie Mae repurchased $268.5 million in non-conforming loans during the same period, a decline of 27.7% from the first quarter of 2024. Overall, repurchases fell 0.8% .

Mortgage managers told HousingWire that income verification was the biggest reason for a repurchase initiative, followed by appraisal issues. Refinancing LLPAs are another sore point for the industry.

Last week, mortgage technology company Candor has released an extension of its Loan Engineering System Federal Housing Administration (FHA) loans. The company now fully automates underwriting decisions for FHA loans – minus collateral – and offers a guarantee on income calculations and approved terms for funded FHA loans.