Appraisal Management Systems for Mortgage
Lenders are regulated when doing mortgage loans specific to appraisals.
Commission sales staff cannot speak with appraisers to keep them away from pressuring to hit value.
Lenders must prove the following to investors: they have systems in place to keep appraisers independent, the date the final report was provided to the borrower, the appraiser is competent, and be able to protect the lender in case of an audit. To avoid contact with sales staff, lenders set up blind ordering systems, and the development of Appraisal Management Companies (AMC) established themselves to gather lists of licensed appraisers that they deemed reliable in market areas. However, today few banks and lenders have a deep list of staff appraisers who can timely run out to photograph, document, measure, and verify a valuation. Most only have a vendor order team and an appraisal review group (depending on the size of the lender).
There are more than one hundred fifty AMCs in America. Most have on their website the number of contracted appraisers, the Errors and omission insurance of contract employees, years of experience, where the home base is located, turn time, acceptance percentage of orders/and refusals of complex appraisals, and some a star rating system. Some also itemize the costs per property type of appraisal.
Lender upper management scorecards AMCs to predict costs, turn times, and risks. By tracking the history of appraisers under an AMC, the lender can determine which AMC meets their market needs, have enough boots on the ground in a city or county, and save time and money. Things that take additional time for a lender are: appraiser uses incorrect form, comparables inappropriate, failure to note condition, lack of explanation for missing facts, and mistakes of all sorts. The appraisal management desk /or review team sends back an appraisal with errors to the AMC for corrections. This communication back to the appraiser in the field can take additional days or weeks. Often the appraiser has already been paid an will not receive further payment for the corrections; thus, there is a balk factor.
A new middleman application arose in the lending cycle around 2015. A number of applications claim to better tract the cumbersome AMC system with SAAS tools and a dashboard that API can often link to the lender's chosen Loan Origination System (LOS). This is via python code that is added to the code of the lender for systems to communicate live. Corelogic bought Mercury in 2017 to go deeper into this market. Corelogic offers flood, tax, and several appraisal tools, as well as deep data on all the homes in America. Intercontinental ICE partnered with First American Title's title information, plat map, and appraisal Works to build a tool that covers several parts of the mortgage cycle. Recently Reggora, Anow, TRK, and Appraisal Dashboard are advertising tools for the origination cycle to make processes faster, digital, and easier. There is a worry that API plugins and Json Web Tokens (JWT), which are used to attach to the lender's mainframe operating system create risks for hacking the database of a lender, which holds the personal information of borrowers. A JWT does not expire, can be a vector for attack, and modify other apps to create new keys. Firewalls and changing passwords are not enough to protect the information held in a lender's platform.
As we speed ahead into the spring of 2022, lenders are more cost worried and have laid off droves of staff. Mergers and new players will emerge from this next phase of the mortgage business.
The mortgage lending business has relied upon vendors to create tools for the thousands of parts needed to approve and sell a file. Lenders may not want their own platform to be centralized with links to other outside companies. Many others have chosen to build their own. Lenders built their own Artificial Intelligence platforms to reduce manual tasks. Machines can process the numerical pieces of loan review and the costly and time-consuming regimen of returning the files to a human Underwriter, an Appraisal Review Desk, and or Management for exceptions and approvals. For a borrower's file to be reviewed only once by a human Underwriter is the goal.
Are you unhappy with your AMC? Interview a few. Get a list of how many licenses are available in the cities you operate. Have backups already in place.
Here are a few that I suggest in no order
Appraisal Connections
Appraisal Nation
Appraisal Logistics
Appraisal Links
Click Appraiser
AMC
Nationwide Property and Appraisal
Situs AMC
United States Appraisals
Valutrust Solutions
If you want the phone or email to contact a sales rep or the owner, just whistle...
C G Caroline Gerardo Barbeau
NMLS 324982
This is not investment
advice. Copyright 5/7/2022.
Non-disparagement
clauses in consumer contracts (including provisions that penalize consumers for
posting reviews) about a Business, are prohibited under California law (Cal.
Civil Code § 1670.8) and under the federal Consumer Review Fairness Act (15
U.S. Code § 45b) contracts, or otherwise attempt to enforce non-disparagement
or ‘gag’ clauses against consumers under any circumstances.
Anti-SLAPP laws, such as Cal. Civ. Proc. Code § 425.16 in California, may require you to pay my attorneys’
fees if you attempt to impose such liability through legal proceedings.
