If you’re considering outsourcing the appraisal process to a third party Appraisal Management Company, consider the following before making your selection. Choosing the best appraisal management partner is an important decision.
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Effective January 2014, rules adopted by the Consumer Financial Protection Bureau (CFPB) allow borrowers to receive copies of all valuation products ordered with their loan (even if the lender did not rely on them three days prior to closing.) Various valuation products (appraisals, AVMs, BPOs) may produce different values and cause confusion for borrowers.
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:
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.
A few months ago, I was invited to attend the Five Star Conference in Dallas. I was so excited to attend this conference with some other amazing NAN team members so of course, without hesitation, my answer was a resounding YES and I immediately started of thinking of ways I could promote NAN to the Five Star attendees
This is an age old question that every appraiser, realtor and lender has come across at least once. There are two common questions relating to this: Why does the appraised value always come in at or slightly above the contract price? Why did the appraiser lowball the value and kill the deal? Now, most appraisers will tell you the appraised value is entirely independent of any contract price. Technically this…
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