Remember struggling with complex mathematical equations in high school. The problems would take up half a blackboard, which you stared at in horror, constantly thinking to yourself “where in my life will I ever need to know this?” Then the teacher who had watched a generation of students before you struggle with the same problem would inevitably utter the phrase: “Don’t make it more complicated than it needs to be.”
OK, maybe it didn’t happen exactly the same way for you, but the theory is still valid…simpler is often better. And the more complexities you add in, the better the chance that something will go wrong. Just ask anyone trying to understand the US tax code OR the paperwork associated with real estate appraisals.
On June 29th, Cristy Conolly from Nationwide Appraisal Network (NAN) had the opportunity to attend the 3rd Quarter Collateral Risk Network (CRN) meeting in Baltimore, MD. Cristy is on the Emerging Issues Committee for the Collateral Risk Network and without a doubt, one of the emerging issues was TRID, or the TILA-RESPA Integrated Disclosure Rule.
Compliance has been slow, and while the Consumer Financial Protection Bureau won’t allow an official grace period, they are being somewhat lenient with enforcement as long as a good faith effort is demonstrated. So how does that connect with “keeping it simple”? Cristy has some answers. “This conference was just a great experience and very helpful,” she says. “TRID was a big topic and as one of the nation’s biggest AMC’s, NAN is really leading the charge toward creating fee structure in each state that falls in line with compliance and regulatory oversight. Let’s face it, we’re operating in an environment now where risk has to be kept to a bare minimum for all parties involved. Due to a variety of reasons, appraisal fees need to increase, but if the process is focused on good communication, realistic turn times and high quality control, then the appraisal work will continue to flow on a regular basis.”
The revised fee structure is something that has come about from NAN and other AMC’s surveying appraisers, who are overwhelmingly in favor of simplifying the process. “Change is happening…that can’t be stopped,” adds Conolly. But instead of shying away, NAN is embracing and improving.” The main emphasis of these changes is focusing on when, where, and how appraisal fees are communicated. Research needs to happen on both the part of the lender and the appraiser, whenever possible. Once the appraisal has been added to the loan estimate, it’s done. No going back asking for fee increases. Therefore it is always better to do your homework on researching the property first.
For AMCs and Lenders who are making preparations, a word of advice: Expect the unexpected, and make sure you’ve planned far enough ahead as to not sacrifice your profitability or actually lose money. “It was really great to attend this conference, listen to experts, converse with peers and work together to find solutions and streamline the process,” concludes Conolly. “We really think our revised fee structure is a great start and hopefully, as the guidelines become more understood, this team will continue to work together to make the process even better.”
About Nationwide Appraisal Network- NAN is an industry leader in appraisal management, providing a unique approach to valuations through customization, innovation, and quality. Visit us at www.Nationwide-Appraisal.com or 888-760-8899