Clear Capital’s latest innovation can help better mortgage underwriting

The Reno-based company has Q1 plans to roll out ClearPhoto, a technology it calls, “a powerful set of AI-driven rules built into ClearCollateral Review, automating the review of property photos and ensuring they are aligned with the appraisal data and sketch.”

ClearCollateral Review is the company’s automated document review workflow, also a part of its efforts to lessen the lending industry’s dependence on manual underwriting tasks.

ClearPhoto’s introduction could mean big things for an industry plagued by delays, lack of manpower and, of course, insatiable demand.

ClearPhoto leverages computer vision to “see” the contents of photos to quickly ensure what’s read aligns with other provided property data. The process quickly validates image labels and can match the number and types of rooms with appraisal reports.

In November of 2021, consumer rating business JD Power published results from a satisfaction study of the US mortgage industry. Positive interactions with the process have declined, according to the report.

“Overall customer satisfaction with primary mortgage originators has dropped five points (on a 1,000-point scale) this year, driven largely by declines in satisfaction with the refinancing process. Both banks and non-banks have seen declines in scores in all factors,” JD Power stated.

Clear Capital’s hope is that by adding more automation, lenders can reduce approval backlogs for new mortgages, as well as refinances and home equity products.

And their timing couldn’t be better.

JD Power also found that “digital self-service combined with live personal service [is] key to retention of younger customers.”

The report stated that more than 76 percent of Generation Y and Z mortgage customers will use their lender again when hybrid services are present. That number falls by 10 percentage points if only one method of customer engagement is used.

Even though ClearPhoto remains on the back-end of the lending process, it nonetheless helps alleviate unreasonable and vague approval timelines as well as encourages lenders to adopt additional innovations to improve process generally considered antiquated.

Consumers are reacting to the decline in satisfaction with traditional mortgage providers by turning to alternative lenders, such as Knock, FlyHomes and Orchard, among others.

Many new options in home lending also include vertically integrated real estate services.

Clear Capital believes its innovations can keep the most well-known lenders competitive.

“One of the last-remaining, untamed areas of the appraisal process is the understanding of photo quality, and most lenders and [appraisal management companies] are manually reviewing photos with inconsistent, slow and wildly expensive processes,” said Jeff Allen, executive vice president of innovation labs at Clear Capital. “Employing computer vision and machine learning will help streamline the inspection process, lower the cost of collateral underwriting and reduce the time it takes to get collateral approval.”

Clear Capital, like Keller Williams, has an in-house technology development arm, called ClearLabs.

Along with ClearPhoto, ClearLabs is behind a number of efficiency-minded software tools designed to make it easier for people in all branches of real estate to understand home value. It spun out mobile app ClearInsight in spring of 2021, an app to help agents, homeowners and appraisers collect data on a home’s contents and location information as well as capture floorplans and internal images.

Clear Capital acquired digital floorplan creator CubiCasa in September of 2021.

Founded in 2001 in Truckee, California, Clear Capital has offices there and in Reno, Nevada. The company employs more than 1,400 people across four brands, Clear Capital, Clario, CubiCasa and REO Network.

Email Craig Rowe