Appraiser Compliance, Technology Go Hand-In-Hand
Dec 23, 2016
The more technology is applied to a race car, the faster that car will reach the finish line, one would assume. In appraising, crossing the finish line would indicate a compliant appraisal report.
Valuators try to achieve the fewest number of reports coming back with red flags all over them.
Veros Strategic Initiatives Senior Vice President Chuck Rumfola said that new technologies can enhance the process towards compliance, and they can validate the values the appraiser assigns to a report. “When you consider the widespread industry adoption of the Uniform Appraisal Dataset (UAD) and the mandated appraisal portals –namely, the GSEs’ Uniform Collateral Data Portal (UCD) and FHA’s Electronic Appraisal Delivery (EAD) portal which went into mandate in June this year- one thing quickly becomes clear: Our industry is going to continue to move toward greater adoption of technology supporting the transport and analysis of appraisal data,” he said.
“There have been excellent evolutions in appraisal data quality and in investor risk management as a result of these initiatives, not to mention broadly sweeping policy changes, which would not have been possible without the adoption of technology. At the heart of the matter – technology is vitally important, because it creates a baseline for the facts behind the mortgage equation," Rumfola added.
Our industry now has a defined dataset for the appraisal, widely adopted tools to create and transmit appraisals using that dataset, and more clearly defined expectations from investors around how that data is interpreted. Never before has our industry been able to see this incredibly valuable report in such complete transparency and so early on in the life of a loan. If it is even possible to remain removed from this technology movement, those who do so ultimately risk being cut out completely from transactions flowing to the agency market.
As one chief appraiser said, having a compliance technology product is a better alternative than compliance desk reviews, and it allows appraisers to be a lot faster, more efficient and cost effective over AMCs handling these appraisals manually.
Bob Keith, compliance officer with First Choice Appraisal Management, said compliance technology solutions can help appraisers keep their focus where it belongs. “I would say, that a big deficiency is the appraiser’s failure to start with the end in mind,” he said. “The appraiser has to know what the end is. The end is not what your opinion of value is; that’s the assignment result. The end should be to clearly and concisely communicate what you did in the appraisal and why. What you did, how you did it, and why you did it are three things appraisers can effectively communicate with technology. If they can do that, they are basically home free.”
Appraisers justifying their results to the client, lender and the AMC continue to be a heavy burden for those in valuation. John Forsythe, president and CEO of Forsythe Appraisal, said data solutions can help appraisers remain compliant by providing support for their work.
“Big data can become an appraiser’s best ally. Appraisers have always analyzed the data, but the key differentiator is the way in which the data and conclusions are included in the appraisal report,” Forsythe said. “This is how we support our conclusions and enhance the confidence of lenders in the determination of our valuation. A big advantage, especially in regards to the improvements in mobile technology, is that when an appraiser shows up at a property that is different than what they expected, they can utilize their connectivity to pull different comps or source additional market data, all while in the field, resulting in little or no delay in delivery of the final report to the customer.”
With more homeowners able to research the “value” of their homes on their own, appraisers are often left in a position of explaining their conclusions to the homeowners or others involved. Technology solutions can help appraisers do just that, Rumfola said.
With some of the customer-level tools available in the marketplace today, homeowners are getting glimpses into recent sales, and expecting to handle more of their loan transaction online,” Rumfola said. “For many customers, this access to data is simply overwhelming, while at the other end of the extreme the data can cause disruptions to the originating process. But more often than not, homeowners can begin to see how marketplace data is used to arrive at a well-supported value.