For most businesses, just mentioning the word “compliance” causes eye rolls, discomfort, or even some screaming. My experience shows that once you understand what needs to be done and why, it can even be a little fun. To accomplish this, you just have to have the right mindset and follow a few tips. 1. Understand the rules and tell your team why they exist People generally do not like to…
Are you a real estate appraiser looking to mentor someone and bring on an apprentice? Or perhaps looking to begin a career in real estate appraising and unsure where to start? If so, you’re in luck because the Appraisal Qualifications Board (AQB) released a Q&A earlier this month regarding supervisory and trainee appraiser education. They are developing a new required course slated for 2015. Some of the questions answered:
EXCERPT – Ok so maybe not a good thing but it’s not the end of the world. Of course there is the slowdown in production, the phone not ringing, the increased pressure to hit your numbers; these are not usually considered good things but hold off on the Kool-Aid for now. First off refi’s are not gone forever, as we all know the housing market is cyclical. When interest rates rise and the refi’s go away we enter into a purchase phase. This is necessary for the next refi boom, without this period of rising interest rates and a mostly purchase market, refi booms would be impossible. We usually see this every few years, after a period of low rates when everyone is refinancing like crazy and the phones are ringing off the hook with new applications (although, as of late, not as many actually qualifying) until the refi market is tapped out. As the uptick in rates begins to slow down the refi market, it is imperative to understand what is coming and how best to not only survive it, but to thrive.
The companies and loan originators that have prepared for this change may actually see their pipeline increase. This will be partly due to a thinning of the industry; we have already seen most of the major lenders lay off people in mass. As this downsizing continues, we see a survival of the fittest take over where the strong (most prepared) thrive and the weak (relied on incoming refi phone calls) wither and die on the vine. Those lenders and loan officers that have spent the time and hours developing their referral system, their builder and realtor business and have a focus on relationships will come out on top and even more important will be in place for the next refi boom.
The consumer also wins during this switch over to purchases. How, you ask? Well as production decreases, the importance of every transaction goes up exponentially. This means more time spent working with the borrowers to ensure each transaction has the greatest chance of approval and closing, more time available to review each file to ensure compliance and completeness thus again increasing the chances for approval and funding. This increased competition forces the industry to focus on customer service instead of speed and rates. Purchases are much more time consuming with a great deal more moving parts than a simple refi. The successful loan originator will have to possess extraordinary relationship building and management skills to handle all the parties involved (buyer, seller, realtors, builders, home inspectors, appraisers, title, and more) and of course on a purchase it is common to have this group of people on three different transactions. You will have to maneuver through this minefield of people on your purchase but many times also on the buyer’s current property and your seller’s next property.
As the refinance market slows down to make the turn into a purchase market it is a great time for companies to re-examine not only their structure, their marketing and their personnel but it is also an ideal time to make sure you have the correct compliance procedures in place. The CFPB compliance changes take effect in a few short months. Are you ready? Do you know how the new rules on maximum points and fees will affect you, especially if your company has affiliate relationships? The appraisal component is a big compliance point but you can reduce your exposure by working with a compliant focused AMC such as Nationwide Appraisal Network and be able to spend more time building those relationships that are going to help you survive and thrive in the near future.
The relationship between wholesale lenders and national AMCs rely on 5 primary factors. Each factor is vitally important to the wholesaler for compliance management and growth in this market.
1. Communication
For the wholesale/AMC relationship to work properly it comes down to the basics. The cornerstone to every relationship is communication, and in this business relationship, nothing is more important. Unlike a community bank or credit union, the wholesale client is not just one client. When you work with a wholesale lender you are actually working with hundreds of independent mortgage brokers, across the entire country. You must be able to properly communicate with the wholesale staff (underwriters, account managers, etc.) as well as the broker staff (owners, processors, etc.). And of course, the number one concern above all else: keeping all parties fully compliant.
2. Coverage
A wholesale lender with a national or large regional footprint needs to work with an AMC that mirrors that coverage in Appraisers. Although they may have started with a smaller local or regional AMC and that may have worked for a while, a proper growth strategy will need to include a solid relationship with a true nationwide Appraisal Management Company. A true national AMC has proper appraiser coverage to handle broker requests in every county along with registration certifications in each state.
3. Systems
The successful wholesale/AMC relationship depends on the Appraisal Management Company having the systems in place to handle volume and proper assignment of orders and delivery of reports. The wholesale model is completely different from the bank, credit union or direct lender model. The aforementioned business models typically have the orders come from a centralized location or even from the net branch system with multiple branches placing orders with multiple users from each branch. The wholesale model requires a whole new way of thinking and it requires the AMC to have the right systems in place to handle multiple orders coming in from independent brokerage firms. Each firm having different structures, different needs and different personalities. The AMC must be knowledgeable in this space and must provide convenient avenues for the diverse brokerage population to efficiently order, monitor and retrieve appraisal reports.
4. Technology
Due to the complexity of the wholesale model, the Appraisal Management Company must have the best technology in place. A centralized cloud based portal that is convenient, user friendly, reliable and secure is the optimal solution for large wholesale lenders. The appraisal management company staff must be trained on service and expectations for this particular client type to ensure satisfaction in the relationship with the individual brokers. The AMC should have a dedicated specific landing page allowing the wholesale brokers to have easy access along with reporting and alerting functions available to all parties. This will allow for up to the minute updates on appraisal requests 24 hours a day.
5. Compliance
2014 is the year of implementation as far as compliance is concerned. It’s more important now, than eve, for wholesale lenders to partner with Appraisal Management Companies that are not only fully compliant but who also routinely test and monitor their systems to ensure they remain that way. Lenders are responsible for their third party relationships. Working with a high quality AMC allows the wholesale lender to offer this as an additional selling point to their broker base. With so much competition for third party origination’s and with rates becoming more and more flat, wholesale lenders need to expand upon their offerings to the brokers. It is no longer adequate to rely on quick turn times to win the broker’s business. Today’s brokers are becoming increasingly aware of the pending regulatory pressures and are feeling the CFPB heat first hand. They are looking to partner with wholesale lenders that have these same values and who will help them to remain compliant. Having the right AMC relationship makes that possible.
Aside from compliance, appraiser background checks are the hottest and possibly most controversial topic in the industry right now. I’ve attended both the Five Star Conference and the Mortgage Bankers Association (MBA) 100th Annual Convention and Expo recently where this topic was at the forefront of many discussions. Among the many points addressed: Is this necessary? Does this intrude upon appraisers rights? Will this produce more quality appraisals? Who is…
Should AMC’s be concerned with the borrower’s satisfaction if the borrower is not the client? Appraisal Management Company’s such as Nationwide Appraisal Network are known for providing the service of executing and managing the appraisal process with the appraiser on behalf of the lender/client. Most companies, especially those that have succeeded through the ups and downs of their respective industries and the economy understand the importance of customer service.
Is one better than the other or is the winning formula a combination of both? With the mortgage environment constantly evolving, quality control has become very important for compliant and successful lending practices. The need to evaluate procedures is necessary to keep from facing scrutiny over regulations.
With the new CFPB rules taking effect in January of 2014 all lenders need to be very aware of the rules and make plans now to ensure they remain compliant. One of the new rules involves appraisals when funding a high cost mortgage. Of course before you can prepare for the changes to come you must first have a basic understanding of what makes a loan a high cost mortgage….
Did you know that Nationwide Appraisal Network takes efficiency and quality very seriously? So seriously, that we have team members and proper procedures in place to not only monitor turn times but to hold people accountable for their productivity and commitments. Though our clients and vendors view our relationship to the appraisal process as simple, what they don’t know is that there are lots of things going on behind the…
My first experience in customer service was in high school. I worked at the dining hall in a retirement home as a hostess then as a waitress. I later became the store manager of a local cheese steak sub shop where I handled even bigger customer service experiences. Now, many years later, I’m with Nationwide Appraisal Network where there are thousands of customers to work with. I’ve had the opportunity…
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