MReport January 2022

TheMReport — News and strategies for the evolving mortgage marketplace.

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28 | M R EP O RT FEATURE A s lenders work to add needed efficiencies to their back offices, the appraisal process is getting heightened attention. While most aspects of mort- gage fulfillment can be fixed with digitization, automation, and artificial intelligence, the appraisal process is a bit more complicated. It's the only part of mortgage fulfillment that relies on an actual person going to a physical loca- tion at a specific date and time. And while automated valuation models (AVMs) have come a long way, they are unlikely to fully replace the role of human intelligence for more complex appraisals. Thus, appraisal is not just a technology challenge but a logistics challenge as well. In order to gain more control, many lenders are choosing to bring ownership of the ap- praisal process back in-house. Depositories and independent mortgage banks often maintain control of this important depart- ment already, but now we're seeing wholesale lenders take the process out of the hands of their brokers to handle in the central office. It's that important. While choosing to manage a direct panel of appraisers rather than working exclusively with AMCs can offer many benefits to lenders, this approach introduces challenges as well. From pipeline management to compliance and ev- erything in between, it's important for lenders managing their own ap- praiser panel to be proactive about their appraisal operations. For lenders who take this path, here are seven questions to answer that will set the foundation for ap- praisal department efficiency. 1. Can You Quickly Identify Risks in Your Pipeline? G ood pipeline visibility reveals potential problems before they become serious. For ex- ample, appraisals that are overdue, appraisals with outstanding com- munication from the appraiser, or orders that have yet to be accepted should all be immediate red flags. While it can be challenging during periods of high loan volume, appraisal managers must have their fingers on the pulse of the operation at all times. Powerful appraisal management technology can help a lot with this, providing real-time visibility, robust pipeline management, and automated alerts. Note: The Loan Origination System (LOS) usually has no functionality to provide complex appraisal management pipeline visibility. Providing transparency into the pipeline also reduces staff work, as they will spend less time informing stakeholders of the loan's position in the work- flow. Good appraisal management software will allow lenders to avoid problems while they preserve borrower satisfaction and keep loan officers sourcing new business instead of worrying about missed closing dates. How Efficient is Your Appraisal Operation? By Brian Zitin QUESTIONS for lenders looking to streamline and improve the appraisal process.

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