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Platinum Data Solutions has reported that in the third quarter of 2015, 39 percent of appraisals contained property quality or condition ratings that conflicted with previous ratings on the same property. These—and other—appraisal inconsistencies are a primary cause of underwriting delays. They can result from a number of factors and apply to work completed by the same appraiser as well as that of another appraiser.
Platinum Data analyzed its database of more than 300,000 appraisals that were evaluated by RealView, its appraisal quality technology, in Q3 2015. Conflicting property condition and quality ratings cause delays that generally range from one day to several days—a costly and risky setback for lenders concerned with rate locks, and deadline-oriented guidelines and regulations. They can result from a number of factors, such as human error, appraiser subjectivity, actual changes in the property’s condition or quality, or even possible appraisal fraud, which has been cited by the GSEs as the top origination fraud scheme trend in 2014.
“More than one in three appraisals contain inconsistencies in property ratings,” said Phil Huff, president and CEO of Platinum Data Solutions. “Causes aren’t easy to determine, so they need to be investigated. Doing this after UCDP submission opens lenders up to numerous issues. Costly delays are just one of them.”
According Fannie Mae, Collateral Underwriter (CU) identifies rating inconsistencies on loans submitted through the Uniform Collateral Data Portal (UCDP) by comparing the appraisal’s data with its own proprietary data, and flags the appraisal for comments or corrections.
“Lenders and AMCs—not to mention appraisers—have felt at CU’s mercy and have been practically begging for a way to identify these issues before submitting their loans to UCDP,” said Huff, who explained that Platinum Data’s RealView solves this issue by identifying all 15 possible discrepancies prior to UCDP submission, so lenders and AMCs can address them during the underwriting and appraisal review process.
“Platinum Data has been evaluating appraisals for over five years now—in fact, we’ve done over one million this year alone,” Huff said. “We have the technology as well as data on virtually everything in an appraisal report. We’re happy to be providing this analysis, and for all of the ways our data and analytics will continue to help our customers and the industry make better, safer, more cost effective decisions.”