Ever since the economic collapse of 2007, the mortgage industry has been the subject of severe scrutiny and regulation. The Dodd-Frank Wall Street Reform and Consumer Protection Act called for greater controls over many business environments, but the appraisal of property and the qualification of mortgage candidates came in for a special mention. And with good reason: Over-valuation, fraud and other nefarious practices were rife at the time, and we all bore the consequences when the house of cards came tumbling down.
This post-collapse regulatory environment is far more robust and secure, but it has added enormous pressure to the workload of loan originators, lenders and investors to ensure that the process of loan approval is managed thoroughly and compliantly, from ordering an appraisal to closing and even post-funding.
Common complaints from the industry include the duplication of tasks by different players such as appraisal reviews that have commonly been done by appraisal management companies (AMCs), loan originators, lenders and investors, lack of transparency and fragmented processes.
To complicate matters further, there are hundreds of AMCs and thousands of appraisers all of whom must be managed for performance, suitability and compliance. Typically, originators and lenders often want to use their own selected appraiser panels, but they have a duty to ensure that the appraisers are compliant and suitable for the task with good track records. With time pressures and staff shortages managing this complicated scenario becomes an onerous task.
The demands of high-speed business environments where resources are key and accuracy paramount, have made it critical to employ less manual processing and more technology, but there is a lack of sophisticated software that uses joined up thinking and offers a way to manage all the processes, people, regulations and organizations that are part of the loan approval process in a transparent, efficient and cost-effective manner. At present, the process is cumbersome and creaking along; duplications, manual interventions, and confused processes create quality control risks and unnecessary expense.
There is a definite need for a solution that connects all the dots, puts the user in charge, and gives him or her a 360-degree view of the loan approval process from start to finish, rather than the fragmented, murky and risky environment in which the industry currently finds itself trying to operate ethically and compliantly.
Joni Pilgrim is the founder and director of sales and business development at National Appraisal Network. For more information, visit Nationwide-Appraisal.com or call (888) 760-8899.
This article originally appeared in the October 2015 print edition of National Mortgage Professional Magazine.
