TheMReport — News and strategies for the evolving mortgage marketplace.
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Feature plus the District of Columbia and American territories. Staying abreast of all those regulations is a full-time and costly job. Two years ago, AMCs didn't have to worry about being licensed in every state. Now they do. And licensing isn't cheap. "We pay $150,000 a year in licensing," Tedesco said. "Appraisers don't realize the licensing fees that we pay for or the $200,000 a year in marketing that we pay to get their business. So many people think this is an avenue where it is almost a get-rich-quick scheme. They find out within 12 to 18 months that the cost of managing and running and operating an AMC on a national level is so significant that they are upsidedown and the next thing you know they're gone." One reason Tedesco's company has survived is because it looks at the business from the loan originator's point of view. It makes sense, given that Tedesco started in the mortgage industry as a lender and another partner worked for a large AMC. His third partner was an appraiser. "We take that experience, merge it together, and are able to meld it into a much more well-rounded approach to what the lender needs," he said. "When we look at the business from the lender's side, we are able to provide solutions that other AMCs don't even think about." Like most AMCs, Appraiser Nation concentrates on issuing good-quality reports. But Tedesco's company recognizes that a quick turn time is vital because it can affect the rate lock. The company also keeps longer hours to accommodate West Coast clients, offers products like flood certification, and has a higher employee-to-order ratio. "We recognize that there is an advantage to providing a flood certificate on the front end with an appraisal as opposed to doing it on the back end where the lender pays for it," Tedesco said. "We'll look for efficiencies like that. We are really looking out 22 | for their best interest. That's what separates us." Appraisal Nation has its own stable of 12,000 certified appraisers. Appraisers recruited by the company are rated on service and quality after every job. When an appraisal comes in, it goes through an automated review system and then to an in-house appraiser who does a line-by-line review. "Because of that, we have one of the lowest revision rates in the country," Tedesco said, adding that the company never assigns by the lowest fee and pays the Dodd-Frank required "customary and reasonable" amount. Pickell, VP of operations and chief appraiser at LRES. "Clients expect their reports quicker than ever before, partly because of the technology that is out there and partly because of the competition." Appraisers join the LRES panel by invitation only. The company considers references, licensing, and hours and years of industry experience. Appraisers are rated and ranked based on the quality of their work. The higher an appraiser's quality and turn-time rating, the better chance they have of receiving more work. "We have a vendor oversight program and a core vendor management team that spends In today's appraisal world, technology is the asphalt covering the road to success. A Two-Fold Focus W hile Appraisal Nation leans heavily toward the originator side, LRES is more sensitive to the pressures appraisers are facing. Yes, the client is paying for the work, and at the end of the day both AMC and appraiser want to deliver an accurate evaluation with a short turn time. But getting to that fast turn and rock-solid appraisal takes a certain level of level of trust. That two-way street of understanding and mutual respect is LRES's "secret sauce." "Pressure has actually increased on appraisers because now the turn times are shorter," said Scott its time managing the vendors and managing the nationwide coverage where we have multiple vendors," Beane said. The vendor management program offers training to appraisers on its panel. Pickell and his staff critique appraisals to help venders increase the quality of their work. In today's appraisal world, technology is the asphalt covering the road to success. It provides faster turn times, which leads to more work. It means having the right hardware and software in the field and office, as well as the ability to integrate with a variety of customer systems. "As an AMC, the big thing is integration," Beane said. "We have to be able to receive the data from our venders in the field, and we have to deliver it to our customers. We have a dozen different customers with a dozen different types of software. That requires a tremendous amount of capability around integration." Bien Aime has been preaching the doctrine of technology to the mortgage industry for years. Global's valuation solution set is delivered on a software-as-aservice transactional basis that ensures compliance and adherence to regulations. It provides the necessary firewall while keeping the lender in the loop, letting them know when the inspection is happening and when to expect the final report. The software also performs a collateral review that includes a level of confidence that an appraisal is accurate based on rules set by the AMC. In the not so distant past, many weren't looking at the collateral. It wasn't until 2011 when mortgage giants Fannie Mae and Freddie Mac started insisting on information about collaterals that lenders began providing it. "Collateral is back, and we're glad to be a part of it, offering the technology to not only manage the appraisal process but to manage the review of it and deliver it directly to the Fannie and Freddie portal and kind of close the loop," Bein Aime said. "We're helping the industry to move forward in the right direction." Some of Bien Aime's clients may also be helping the relationship between appraisers and AMCs move forward in the right direction. The AMC owners, many of whom are former appraisers, are using a "cost plus model" to pay their appraisers. Lenders are charged for an appraisal, say $400, which goes directly to the appraiser. The plus part is an additional $100 that is tacked on and goes to the AMC. "It's changing the impression of a lot of appraisers to like AMCs," he said. "The relationships are getting better, and the new philosophy is making that a reality." The M Report M