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Closing In 10-days Or Less

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hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
This isn't new; it is the on-going discussion about streamlined mortgage approval including streamlined collateral valuation.

But this gives a sense on how some lenders will market the product:

http://www.housingwire.com/articles...-in-10-days-or-less?eid=311679968&bid=1609287

One quote (my bold in black)
So how does Caliber close a loan in 10 days or less?

According to the company, its “Ultimate Homebuying Experience” automates much of the home buying process, including appraisals in some cases, which several other lenders recently cited as a impediment to shorter loan closing times.


It should be obvious that there is a segment of the historical residential mortgage business that is not going to go to appraisers any longer. And while appraisers cannot compete with the turn-time that an automated valuation can deliver, if one is going to do primarily residential mortgage work for GSE lenders, one should do what one can to improve efficiency (reduce turn-time) while maintaining the minimum standards.

The good news is in that competitive arena, appraisers like me are not competitive. So, the appraiser-pool that can (a) improve efficiency and (b) maintain minimum standards are the ones who are going to have the competitive advantage going forward.

For the rest of us who continue to do residential mortgage appraisal and who cannot compete on turn-time, our clients and/or assignments will be the unique or oddball assignments, or higher-end valuations where speed is not the critical factor.

I don't see this as a negative.
I see this as a reality.
There are opportunities for those who can adapt their process to improve their efficiency.
There are opportunities for those who want to specialize rather than try to become efficiency-experts for general residential mortgage work.
Both paths are open and both can be equally rewarding.
But probably what isn't an opportunity is to change the direction things are headed.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
For the rest of us who continue to do residential mortgage appraisal and who cannot compete on turn-time, our clients and/or assignments will be the unique or oddball assignments, or higher-end valuations where speed is not the critical factor.

And don't forget those assignments where the AVM does not make the number and the borrowers start complaining. There will be those assignments to.


I don't see this as a negative.
short sighted.

I see this as a reality.
True, as long as everyone rolls over and just accepts everything new is good, until it's not good, then it was inevitable, or someone else should have done something in the beginning.


There are opportunities for those who can adapt their process to improve their efficiency.
There are opportunities for those who want to specialize rather than try to become efficiency-experts for general residential mortgage work.
Both paths are open and both can be equally rewarding..

It does not matter how efficient appraisers become, if 5 days after the report is sent, a stip comes back that is asinine, or already addressed in the report, and then 5 more days later we repeat the "let's be stupid" question and answer period.

But probably what isn't an opportunity is to change the direction things are headed .

Sounds like a party-line-corporate meme.

Do you know something that should be shared?

.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
Sounds like a party-line-corporate meme.

Do you know something that should be shared?

.
:hug:

No, I have no secret knowledge.

I agree with you that in those cases where the automated valuation tool doesn't runs into friction, they can always upgrade to an appraisal. Any home with newer upgrades would likely not get that condition recognized in an automated valuation. On the other hand, if the LTV is 20%, it probably doesn't matter.

I'm sorry if I come off like a party-pooper or some Corporate Robot. I'm not.
This is the reality that is impacting the residential mortgage-market appraisal sector. Naturally, I'd love it if the clock turned back 15 years and I had the same clients now than I had then. Personal relationships, cash at the door, and compliant appraisals.
But I don't think the clock is turning back. And since it hasn't, I've made adjustments in anticipating of not being able to compete in the high-efficiency, quick turn-time, minimum-standards only, residential mortgage appraisal.

Marion, I'm sure you will recall that I had predicted (although one doesn't need to be Nostrodamus to make this prediction) that the appraisal profession- especially at the residential level- would bifurcate into two branches:
1. Technicians (low risk LTVs, homogeneous properties/market, no significant external turmoils/negative influences): this type of appraiser will do a lot of volume but at a lower fee-per-assignment and using streamlined process supported by big-data analytical tools.
2. Analysts (everything that doesn't fit into the above): These appraisers will have a lower volume but a higher fee. More analysis is required and a higher level of reporting. Turn times are not as significant.

I said appraisers have a marketing choice to make:
While an appraiser could be both, it makes sense to pick one of the models and run with it.
I choose the analyst path. We have posters on this forum who proclaim they do 5-7 a week, get no stips, and have happy clients. One in particular states that his market is very homogeneous and it isn't that difficult to to ramp-up to that kind of volume.

Right now we are transitioning from the journeyman/jack-of-all-trades appraiser to the more specialized appraiser.

Again, I don't see the change as a negative. I see opportunity. I don't think things are going to go back to the way they were. I think things are moving toward more automation and streamlining where possible.
We can disagree about the prudence or soundness of the movement, or to the degree it moves toward non-traditional appraisals. But I think it is a mistake not to acknowledge (like it or not) that there is movement. And that is all I am saying.


BTW, I didn't make the announcement I cited. I'm just referencing it and providing my read of what it means. You may read it differently. I'm OK with that. And if I'm wrong in my read, I don't have a problem being wrong.

:cool:
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
I think we agree.

We both know, money is made on forecasting the future, not analyzing the past.

So,

What's the AI up to these days?

.
 

Mark K

Elite Member
Joined
Jan 27, 2004
Professional Status
Certified Residential Appraiser
State
Indiana
The lenders are (successfully) using the excuse of "appraiser shortage, long TAT" etc. to convince the regulators that something needs to be done in order to keep the market moving, even though they've created most of the 'problems' and are now exploiting the situation to their benefit.

Appraisals for low LTV with high FICO borrowers are at best a formality and at worst, a waste of time and money so an AVM is probably appropriate in these cases.

The reality is most loans don't fit into this category and if they go down that road for all loans chances are that they will have to backtrack. Maybe they can try some NINJA loans again; that worked well in the early 2000's. :(
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
The reality is most loans don't fit into this category and if they go down that road for all loans chances are that they will have to backtrack. Maybe they can try some NINJA loans again; that worked well in the early 2000's. :(

I think,
if you do a little research,
you will find lots of
interest only real estate loans have been made in Australia,
and now there is some concern
those loans are going to implode.
Good thing we don't have international lenders or anything like that to worry about.

'Cause you know,
if our lenders are in other countries,
and their markets implode on bad loans,
it's not our tax payers who will bail them out.
They'll just use their profits made here to cover the loss.

Right?

.
.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
What's the AI up to these days?

.

Despite a well-known opinion-maker's characterization of "obsolete", the AI is doing fine.
Good news (I believe) is that many of the local chapters are positively adapting to changes at a faster pace than the national office's structure allows it to adpat.

BTW, the AI was against the streamlining programs announced by Fannie/Freddie (No appraisals). I'm a member of the AI, and I disagree with their position.
We (AI) are a big tent (and trying to make a concerted effort to get bigger); we can handle members who have differing opinions. :)
But I don't want this to turn into an AI-debate; that isn't what the original post is about (someone already bashed me and the AI recently; telling me that my designations were a waste of my money and that the only reason I did it was to buy credibility; but come to think of it, that was last month, so I guess that means we need a new AI-bashing thread... and I don't think you, Marion, are AI-Bashing. It is just too easy for that topic to be taken-up on any thread).
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Imo, if lenders want faster appraisals, they can do a lot to make that happen...such as allow MLS photos (leave it to appraiser's judgement if originals are needed) AND drop the requirement to inspect comps from street-again that should be up to appraiser. In a rural or custom home area, inspecting from street might be needed , in conforming home are, and especially with good overheard maps now, not needed most of the time.
Ditto for lenders providing the condo doc questionnaire, drop the 2 listing requirement etc.

If they keep the requirements they have now, then I don't see how an appraisal can be delivered faster.
 

Mark K

Elite Member
Joined
Jan 27, 2004
Professional Status
Certified Residential Appraiser
State
Indiana
I can understand wanting to bash AI (Artificial Intelligence) but when there is frequently no natural intelligence to be found on a daily basis, you have to live with what you can get.

We are talking about Artificial Intelligence, right? :)
 
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