Month: October 2023

Appraisal management needs a paradigm shift.

The economy, regulators, and technological advances demand it.

Interest rates remain high, and that means mortgage applications remain low. Yet as revenue from loans is decreasing, regulatory scrutiny is increasing. The bottom line? Whether it’s a renewed focus on Appraiser Independence Requirements (AIR) or a new focus on bias in appraisals and AVMs, the cost of compliance is going up.

So how can lenders ensure they have cost-effective, reliable, and compliant appraisal management?

First, a common misconception needs to be dispelled – that in-house valuation management is cost-effective. When calculating the per-order cost, even if the direct staffing costs are accounted for, what’s almost always left out are things like the need for ongoing training, software licenses, and staying current on regulatory changes.

Moreover, in-house appraisal management isn’t scalable, meaning lenders don’t have the ability to quickly adapt to market fluctuations. This leads to overstaffing during slow periods and frantic hiring scrambles to meet demand during busy times. Either scenario is financially and emotionally draining.

So the short answer is “work with an AMC.”

But simply deciding to work with an AMC isn’t the full solution. The one-size-fits-all approach of many firms is not only ineffective but also fraught with risks. What’s needed is a paradigm shift towards a more nuanced and effective approach that takes advantage of technology to align with both the industry’s evolving demands and individual lenders’ needs, while keeping the end user – the borrower – happy.

In short, what’s needed is intelligent valuation management that makes every valuation personal. Behind every order, every loan, is a person or a family with unique needs and aspirations. When that’s the focus, technology is sought out or developed to make reliability and quality control integral parts of the process.

In a world where most AMCs treat orders as mere numbers, the value of personalized service cannot be overstated. When you call, you need someone to answer. When you have a valuation need, you want it handled with precision and care.

For lenders, the choice is clear: personalized, intelligent valuation management is not just an option; it’s an imperative. And you need a partner that’s big enough to get the job done, but small enough to get it done right.

That’s the future of valuation management. That’s EVP.

Businesspeople love to talk about relationships. We say things like “I don’t want to just sell stuff to people, I want clients that I build relationships with.” And that’s a worthy goal – work’s a lot more fun when you know your clients and like doing business with them.

But what about the clients you don’t get to build that kind of relationship with?

For AMCs, that’s the borrower.

Sadly, most AMCs focus entirely on the lender because that’s who they interact with the most. 

But that means the other client – the borrower – is ignored.

And that’s what Every Valuation is Personal is about – remembering and serving the borrower. That’s why our internal culture building focuses on “One.” We want all of our people to remember that the person behind every order – the borrower – is the One we’ve got to think about, not the order number.

There’s a saying “brownie points have no shelf life” that’s usually meant as a warning to those who think that doing things around the house might get you out of trouble for doing something stupid later (author’s note: it does not!).

To put that saying in the context of our business, we may get some brownie points from lenders, but borrowers can’t give us credit for other orders: they don’t have any!

For the one borrower on that loan, it’s the only order. It’s a One of One. This is their home. Or it could be their business. It’s where they want to start a family, or retire, or vacation. In other words, this order is personal.

And whose job is it to make sure they get in their home? Ours.

Because the lender doesn’t want to hear that someone on their end forgot to upload the old appraisal with the correct square footage or that the borrower waited until two days before closing to schedule the inspection. 

Why? Because the borrower doesn’t care – they just want their home.

And there are no “business days” when you’re waiting for that.

Every order is an opportunity to help make one person or one family really happy. And we may never even interact with them. We believe that if we focus on that – the One borrower on every order – then our relationship with our lenders will take care of itself.