A better understanding of appraisals in today’s world

By March 25, 2015Appraisals

There’s a famous episode of the old television comedy “The Brady Bunch” in which Peter Brady, entering his awkward teenage years, puts the family musical act in jeopardy because of his voice cracking. The incident results in their most famous song, trumpeting the importance of change and how we all have to “rearrange”. In the appraisal business, we may not don the sparkly polyester pant suits, but we can certainly relate to the Brady’s, because change is upon us, whether we asked for it or not.

Aside from Dodd-Frank, there have been many updates from Fannie Mae, FHA, USPAP and UWs.  Shortly after Dodd Frank, we had the 1004MC, which was added as a required addendum to most residential appraisal reports.  Next, Fannie Mae implemented UAD and with that came a brand new way of reporting for appraisers and reviewing for underwriters. This was followed by UAD formatting required by the FHA, which was followed by last January’s Disclosure and Delivery requirement. And of course, we now have Fannie Mae’s Collateral Underwriter, a proprietary appraisal risk assessment application developed to support proactive management of appraisal quality by tapping into a larger database and weighing major metrics within the industry. As with all of the aforementioned changes, NAN is ready to “rearrange”.  We’ve been preparing since the announcement by Fannie Mae and have created new systems and software designed for a smooth transition. “Our enhanced QC policy will streamline the appraisal process and assist in the identification of any discrepancies within a report, said Joni Pilgrim, Co-Founder and Director of Sales & Business Development. “A risk score will now appear on the main screen in addition to other areas and plans are for it to be displayed next to the Successful Submission Report function.”

So why all the change? Each new set of rules and standards has its own origins for sure.

But in most cases, these adjustments are enacted in order to allow underwriters make better informed lending decisions.  Appraisals help assess the risk involved in lending money to a borrower using their property as collateral.  The appraiser is the lender’s “boots on the ground”, their eyes and ear to report every aspect of the property that impacts value and marketability.  In the case of default, is there enough equity to cover the loss? Does the value of the home allow the lender to recoup their capital? These are just a few valid questions. Many of the changes enacted over the past decade have helped appraisers and underwriters communicate more clearly, sharing all of the vital information needed to make a sound lending decision.

At NAN, we’re ready to take all the challenges of Collateral Underwriter head on. “I can honestly say I don’t think anyone is more prepared for this big change”, said Cari Burris, Co-Founder and Director of Operations at NAN. “We’ve done our homework. Our IT people have worked tireless to make sure that every client has easy access to everything they can possibly need when it comes to Collateral Underwriter, and we believe we’ll be the ‘go-to’ source for appraisers from every corner of the country. That’s the advantage of dealing with a company that’s truly national.”

To speak to a NAN expert about how we can help you, call 888.760.8899 or click here. 

And for more about the most commonly asked appraisal questions, click here for our white paper: “Top Ten Questions Borrowers ask Lenders and Appraisal Management Companies”

ABOUT NATIONWIDE APPRAISAL NETWORK- NAN is an industry leader in appraisal management, providing a unique approach to appraisal management through customization, innovation, and quality. NAN website – 888.760.8899

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