Many times, when we are called to handle appraisal management for a lender it’s because they are either A. not happy with their current appraisal management service or B. they are doing it in house but are struggling with managing the vendors and the process and therefore, they are not getting the results they need.
When dealing with the latter of the two reasons, we understand the struggle. We have made it our business to find the great balance between managing vendors and developing and maintaining healthy relationships that will last well into the future.
There is a common misconception in the mortgage and appraisal industry that appraisal management companies are just middle men that scrape fees off the top and do nothing in return for it. While I’m sure that there are companies out there that do, it’s not the case for most.
Nationwide Appraisal Network is viewed by our vendors and clients as a trusted and reliable resource for managing compliance and vendors while obtaining the results the lenders require.
Lenders that try to manage the appraisal piece in house run into many issues like chasing down appraisers for updates, not getting the turn time results they need, quality control, finding appraisers to take assignments, paying appraisers in a timely manner, managing customary and reasonable fees, not to mention hiring and paying staff to handle all of these tasks that and making sure that staff is not compensated based on the outcome of the loan (this goes for their supervisors as well).
One reason we believe that lenders struggle with getting the results they need from appraisers is because appraisers view working with one particular lender and working with an AMC very differently. Historically, an appraiser has a much more relaxed approach in their communication and updating, their turn times, and quality control. This could be due to many things, but one being that the lender has not outlined requirements with the appraiser up front when engaging them to complete an assignment. Maybe the lender isn’t aggressive in getting the communication and updates because of the onslaught of regulations brought on in the past couple of years. Maybe the appraisers feel they don’t have much to lose if one lender pulls their business due to their lack of communication or lack of urgency.
At Nationwide Appraisal Network, we do things a bit differently:
- We outline our expectations up front with each appraiser at the point of registration. The appraiser is aware of the requirements upon registration to join the panel.
- We communicate these same requirements at the point of engaging an appraiser on every order every time. We believe that communication is everything.
- Though our expectations are NOT out of the industry norm and we are NOT asking for anything that isn’t industry standard, we continuously remind the appraiser that this is what we expect and need.
- We manage the process from order placement to completed report with a hands-on approach.
- We don’t blindly bid out our appraisal orders to the lowest bidder. We hand select an appraiser for an assignment based on qualifications, geographic competency, availability, score and place in rotation.
- We keep a limited number of appraisers per zip code to ensure that we can provide enough work to our appraisers to keep their businesses thriving.
- And lastly, our appraisers know that they have the opportunity to receive work from many different lenders, banks, credit unions, and servicing companies throughout the country.
So maybe the secret recipe is:
Take communication and respect and mix thoroughly. Blend with fair and on time payments. Add compliance management and sprinkle abundantly. Finish with providing enough work to keep your appraisers happy. Serve.
But seriously, for a lender to try to replicate all of the functions that an appraisal management company performs costs time, money, resources, and involves a large amount of risk. If you are a lender looking to keep this function in-house, I invite you to use this list to calculate the cost you would incur to employ and manage such a department.
Leave it to the professional appraisal management companies who will work to ensure your compliance and quality and use your time to focus on your business.