The Cost of Mortgage Innovation

Editor’s note: This feature originally appeared in the December issue of DS News.

With mortgage default volumes at all-time historical lows, investors, servicers, and mortgage field services vendors continue to look for innovative technological solutions that add value.

Technological innovation often comes at a cost, and in the current environment sometimes gets ignored or placed on the back burner due to costs constraints or capital budget requirements. In some sectors, people love to speak to technological innovation and enjoy throwing around

technical buzzwords, but in the end do not want to pay for the latest technology.

However, there is one technological development that is innovative in both its use and its cost effectiveness. The technology is known as a geotagging system, an application of a technology used in several different industries but which has been modified for use in the mortgage field services industry. 

The term “LOTO” stands for lockout/ tagout and is a procedure utilized in industries where machines or equipment prepared for service or maintenance often contain some form of “hazardous energy” that can cause harm to people in the area. “LOTO Safety” is all about making sure these types of hazards are controlled to prevent unplanned releases of harmful energy.

In the mortgage field services industry, we are fortunate not to regularly encounter equipment containing “hazardous energy.” However, there are numerous circumstances where a similar technology and procedure such as LOTO would be of benefit.

Consider examples such as incorrectly changing a lock at the wrong address, inspecting the wrong property, removing materials from an incorrect property location, or paying for services not performed. 

Lockout/tagout technological solutions can be expensive and not suitable for the mortgage field services industry in their current form. One example of the application of innovative, simple, low-cost, and effective control using geotagging is in the “passcode tag and app,” which brings a whole new level of compliance. Geotagging is a term for associating a piece of data with a specific location. 

Geotagging is the addition of geographical information, usually in the form of latitude and longitude coordinates, to websites, images, videos, smartphone transmissions, and various other data types and sources. Placed within a selfadhesive tag and powered by radio waves from a nearby smartphone, these tags can record nearby devices’ signatures and geolocations, then triggering an app server to record the event. 

Mark Clark, Co-Founder of Pass-Code Technology LLC, working with a Tanner Ewing, Founder of Tritium Technical Solutions, adapted one of Tritium’s product line and piloted a multifeatured geotagging tracking system within the mortgage field services space. 

The system allowed full monitoring of all activities on properties by using a combination of innovative asset tracking software and a flexible sensor with wireless capabilities. The simplicity, cost effectiveness, and reporting capabilities of this solution immediately presented intriguing possibilities for mortgage field services vendors. There is plenty of potential upside for clients to realize additional compliance benefits as well as avoiding costly errors and ensuring services are performed as they require. 

 

WHAT IS THE GEOTAG? 

The tag itself is a 3.25 x 2-inch self adhesive tag. Since the tag contains no battery but is powered by radio waves from nearby smartphones, it has an unlimited lifespan and no maintenance is ever required. When a phone is close enough to power the tag, the circuit wakes up, records the nearby devices signature and geolocation, and triggers the associated server to record the event. The tag also sends a cryptographic key to the device, which verifies its identity with the server. 

The tag communicates with a custom app that is free to all users. The authorized person entering the property will hold a mobile device to the tag and be automatically logged in, receive address information, and, if required, receive a photo of the property to verify they are at the correct address. The tag will supply the user’s data and log the person in. At tag-in, the device records the precise geo coordinates of the property, and the exact time the user tags-in.

The pilot demonstrated several real-time benefits. Vendors can always know who is present on properties, when they visit, and how long they remain. Imagine getting “pinged” when a vendor is on-site. This is a perfect time to call them and get a live update as to the property condition and discuss bid items if required or recommended in real time. 

Geotagging allows mortgage field service vendors as well as field inspectors, brokers, and valuation experts to be sure they are at the right property every time. Additionally, a 500-foot geofence is embedded within the software to complete assigned tasks if a vendor does not follow the checkout procedure. This a real benefit in that if a vendor forgot to check out, the system will do this automatically when they leave the property boundary. The geofence setting can be modified by the system administrator if necessary. 

The tag and associated software offers accurate analytics, exceptions reporting, and progressive data trending as well. All property records are stored safely in the “cloud.” There is no need to provide internal storage for these records, as data is safely encrypted in the cloud environment with limitless storage space. Tags can also be placed at as many property areas as desired. Multiple tags allow scan-in for multistory properties, basements, or all areas of a larger property (such as barns, outbuildings, or secondary structures).

As mortgage field service providers, how many times do we see photos from the top of the stairs going into a basement? If it’s important to ensure a basement is fully inspected, then placing a geotag will allow you to confirm that the vendor went down into that area. How many times has discoloration been discovered in later inspections, but was missed earlier on due to hurried or incomplete prior inspections? Placing a tag strategically in remote property corners will ensure these areas aren’t missed.

With geotags, there will be no confusion regarding date of service. This software reads cellular data for date and time with each scan at the property. This is tamper-proof technology providing an electronic time and date stamp for service visits. The tag and software also allows full integration capabilities with field services vendors’ system of record. These systems are updated instantly when activity happens on your property. Simple API (Application Programming Interface) allows integration with many background-verification companies. 

It would appear the most optimal time to install a tag and have it activated is at the initial securing. The client can determine how many tags are required and also their placement. Tags are placed at properties to ensure/confirm authorized vendors are performing services at the property and length of time vendor spends performing services. 

When a property is assigned to a vendor for the first time via the app, the vendor receives a welcome email. The email provides a link to download the app and directions for setting a personalized password, etc. Once the app is successfully installed, the vendor enters a username, password, and logs in. They then proceed assigning tags to the property. The process is quick and relatively simple. The vendor receives a work order and, on arrival at the property with passcode tags, installs the tag(s), activating and assigning it to the property within the app.

The tags are printed on both sides to enable installation on a window/sliding door and to be visible from inside or outside of a property. One downside to avoid is excessive bending or creasing, as this can damage the internal components of a tag, rendering it inoperable. 

Tags will also not work if installed on a metal surface, as metal interferes with the communication signals. 

 

COST CONSIDERATIONS 

While a key driver will be volume, the pricing expectation for the mortgage field services sector is as follows: $22 per property for six months, including installation/monitoring and reporting. All the key features and benefits above would be available for less than $4 per month ($3.66). 

After six months, the monitoring fee is expected to be $18 for additional six months monitoring. 

Tags, along with the associated firmware, can be currently sourced at U.S. Hardware Supply. The app itself is free and available to download. 

The geotagging system promotes vendor accountability and improves billing accuracy, enabling you to only pay for verified services when a vendor actually “tags in.” The system also assures acceptable levels of service, as it validates time spent on the property. Background checks can also be available for all subcontractors, with subcontractor layering capabilities as well. In the end, geotagging has the potential not only to save clients money but also to add a whole new level of accountability and compliance, ensuring the right properties are being inspected, maintained, and visited in accordance with client/investor requirements.