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Minnesota Bankers Association publishes Spanish translation guide

National Mortgage Professional
Oct 09, 2006

Brokers hope appraisers join the eRevolutionSig AndermanAdvice,Internet,RESPA Today, mortgage originators routinely order credit reports, flood certificates, automated underwriting, lender submission, title reports and loan documents with a few clicks of the processor's or loan officer's fingertips. Applications, employment, credit and other pertinent information are keyed in only once and instantly made available online to everyone involved in the transaction. Saving time not only translates into increased efficiency, but has also become a new form of customer service. So, why are appraisers dragging their feet? The appraisal industry has begun to join the eRevolution, albeit a bit reluctantly. It has always been important for appraisers to protect their independence; however, now that the Internet has transformed the entire mortgage industry, even the small local appraisers cannot deny the benefits. New challenges facing brokers and today's appraisers The RESPA reform proposal that nearly made its way into law in March would have required even more changes to the appraisal business model. The Guaranteed Mortgage Package (GMP), would have put lenders in the cat-bird seat, making it easy for them to negotiate down the fees of service providers and the terms in which they receive and return order requests. Many believe that if the proposed reform had passed--and it still may in some form or variation of its original GMP--independent appraisers may have been required to become part of appraisal management companies to receive orders from lenders for those loan packages. That would not only have a significant impact on an appraiser's profit margin, but it could also require appraisers to learn multiple systems and processes just to receive appraisal orders from their mortgage broker clients. Everyone is breathing a sigh of relief because the U.S. Department of Housing and Urban Development has retracted this particular RESPA reform for further study. But, the threat is still out there, in a HUD committee, circling the broker, appraisal and settlement services community. Now is definitely the time for mortgage brokers and appraisers to take advantage of every opportunity to strengthen their relationships, including leveraging every available technology to make the ordering and delivery process as easy as possible. Top three broker and appraiser concerns So, how do brokers and appraisers feel about what's happening in their industry? At my company Ellie Mae, we spent some time talking to both parties to learn what's impacting their industry and what they see on the horizon. The first thing our interviews confirmed is that appraisers are a fiercely independent bunch. In fact, unlike what the National Association of Mortgage Brokers does for mortgage professionals, there is no single association that brings together more than 10 percent of the appraisal community. Our interviews also raised three main concerns that were consistent across the board with most brokers and appraisers. The good news is that technology is now available to address two out of three concerns. 1. Generating more business without spending more for it. This concern cuts across both brokers and appraisers. The simple answer is to drive all of your marketing and lead acquisition costs from a fixed- to a variable-cost model. An appraiser paying monthly fees just to be put on somebody's list is not only an ineffective marketing technique, but also a bad business model. The days of "if you build it, they will come" are not just over; frankly, they never existed. Especially in today's market, you have to go to where the transactions and the customers are. Being present in the point of sale is terrific, but being available in the "point of thought" is even better. That's one of the main benefits of joining a network that is tied closely to the mortgage originator, like for the lender community and ePASS Appraisal Connection for the broker community. Variable-cost models require the appraiser to only pay a nominal fee, and only if they accept an order. Providing responsive, wonderful service to your lender/broker is great; being one click away on their desktop application is even better. 2. Spending less time answering phone calls and more time on my business. Everybody likes games, but phone-tag isn't fun for anyone. The fact is that sophisticated technology offers the capability to make status updates that automatically feed directly to the mortgage originator who ordered the appraisal. This is a more efficient process and saves a great deal of unnecessary phone calls between those who order the appraisals and those who provide them. Unfortunately, many appraisers still do not embrace that technology. Brokers want to be able to check status through their LOS system each day and save hundreds of unnecessary phone calls, provide better customer service, create a competitive advantage for the broker, and finally, and perhaps most importantly, create a true customer retention tool for the appraiser and broker. 3. Feeling pressure to inflate prices. Brokers understand the value of having an objective, independent and professional network of trusted appraisers who can maintain their autonomy and deliver unbiased evaluations. While there isn't currently any known electronic solution that can solve this concern nationally, will RESPA changes help or hurt this issue? I don't know. But one thing is for certain, brokers and appraisers who take advantage of the opportunities presented today will have the best chance of maintaining their independence in what is sure to be an uncertain tomorrow. The bottom line is the bottom line. Now is the time for the broker and appraiser communities to strengthen the important bond between themselves so that, regardless of what regulatory changes take place, what consolidation continues to occur in the industry, and what new data or products enter the market, the third party originators, who are responsible for approximately 65 percent of all loans in the U.S., will still be motivated to work directly with their favorite appraisers. Leveraging technology to strengthen that bond is of paramount importance. Sig Anderman is founder and CEO of Ellie Mae Inc. He may be reached at (925) 227-7087 or e-mail [email protected].
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