TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1490083
22 | M R EP O RT FEATURE lot of work to do to achieve greater racial, ethnic, and cul- tural diversity among appraisers. Representation is a leading force for equity and inclusion in every profession. We recognize that recruiting for greater diversity will make us stronger and more representative of the communities we work in and contribute to greater cultural awareness. What methods and tech advances are being adopted to better assist in the advancement of an all- digital process? Williamson: Thanks to the advances of data standardization and collection technology, as well as improvements in modeling and analytics, we can accept the value or purchase price of the loan transaction through Desktop Underwriter®, our automated underwriting system, because we are confident that the value or purchase price is consistent with market expectations and that the loan is eligible for delivery to Fannie Mae. We call this value acceptance (or an appraisal waiver), and these mostly occur on refinance transactions or some purchases with large down payments. Secondly, through desktop and hybrid appraisals, we're increasing the use of alternative-scope prop- erty valuation approaches. Both of these data-driven approaches have the benefit of reducing contact between borrowers and apprais- ers, thus reducing the likelihood of valuations being affected by personal or unconscious biases. In addition, desktop and hybrid appraisals allow appraisers to be more productive—they do not have to schedule appointments or visit properties but can still access comprehensive property informa- tion to confidently fulfill valua- tion requests, helping to alleviate capacity constraints. Lastly, we've relaunched our value acceptance plus property data initiative for eligible prop- erties, also known as inspec- tion-based appraisal waivers. As an added benefit, we are seeing a shorter valuation and loan origi- nation process and the potential for reducing borrower costs with these alternative valuation approaches. Steinley: Clients are best served by receiving reliable, credible opinions of value. The most important aspect of an appraisal is the appraiser. Lenders can best help themselves, and their bor- rowers, by hiring well-qualified, highly competent appraisers. The technological tools that appraisers employ in their efforts are secondary to their education, experience, and ethics. Appraisal Institute professionals with the MAI, SRA, AI-GRS, or AI-RRS designations provide demonstrat- ed expertise well beyond the minimum levels that licensing or certification implies. Will the human element always be the mainstay in the appraisal process? Is the role of the human element diminishing as advances in tech are rolled out? Williamson: While there will always be a need for some level of human involvement in the valuation process, continuing to modernize the appraisal process mitigates pain points including long wait times, rising fees that are due, in part, to appraiser scarcity or spikes in demand, and risks of human bias. Continuing to enhance the tools appraisers use to help them more accurately select compa- rable properties and conduct adjustments will strengthen and provide more confidence in the appraisal process and product, as will modernization of the valuation approach for home loans through the use of data, technology, and process design. With the majority of the apprais- er workforce nearing retirement, Fannie Mae and other industry stakeholders see this as an oppor- tune time to encourage talented new entrants to the field from all segments of the population, shaping an appraiser workforce that better represents the diversity of our nation. Steinley: We continue to believe that a traditional residential appraisal with a full inspection by our highly trained Designated Members is the gold standard of security for the banking system and the parties involved in the transaction. Appraisers use their experience, expertise, and education to de- termine which comparable sales to use and what adjustments, if any, to make. (e.g., unusual buyer or seller motivation, foreclosed properties, short sales). ERIC C. PECK has 20-plus years' experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in communication arts/ media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com. "We continue to believe that a traditional residential appraisal with a full inspection by our highly trained Designated Members is the gold standard of security for the banking system and the parties involved in the transaction." —Craig Steinley, President, Appraisal Institute