Handling Appraisals Internally? How’d the Last Few Months Go?

The entire mortgage industry is still reeling from the historically low interest rates of 2020, which have generated record levels of refinancing. For lenders handling appraisals internally, how have the last few months gone? Have you been able to keep up with the demand for appraisals, even as some appraisers have turned down assignments due to concerns about COVID-19?

If your team has been run ragged by the sheer volume of business so far in 2020, what are you going to change to ensure this doesn’t happen again? Our suggestion is to outsource appraisals to a trusted appraisal management company. There are four compelling reasons to consider this.

First, outsourcing reduces costs. Costs for an internal department with an appraisal expert to oversee it (as required by the Appraiser Independence Requirements) can be higher than you’d think. In addition to salaries, there are payroll taxes, benefits, rent, equipment, utilities, insurance and more. And don’t forget the time, effort and expense of reconciling invoices and paying appraisers. Outsourcing to an AMC costs lenders nothing and allows them to get rid of significant overhead costs.

Second, outsourcing lowers hassles and distractions. Appraisals, by definition, are not a mortgage lender’s area of expertise. They’re a distraction from your core competency and a hassle to manage. Allowing experts to take the burden off your hands leaves your team free to focus on bringing in and closing more loans.

Third, outsourcing appraisals to an AMC lowers risk to the lender. Dodd Frank and AIR are clear: “An employee of the Seller in the sales or Mortgage production function shall have no involvement in the operations of the appraisal function.” Lender requirements to manage appraisals internally are lengthy, detailed and demanding, and we’ve found that very few lenders are compliant. And no, using appraisal management software is not enough. The vast majority of lenders managing appraisals internally are at risk of failing an audit.

Fourth, lenders can continue to maintain control, get quality appraisals done quickly, and use the same trusted appraisers through an AMC. We know that many AMCs have poor turn times and even worse customer service. But Triserv is an exception. Our client-specific teams on both coasts get to know the lenders they work with. Their high-touch, personalized order follow-up means every appraisal’s milestones are managed to strict timelines and lenders always know when each order is accepted, scheduled, inspected and delivered.

After moving from a self-managed approach to appraisal management, our productivity has been greatly enhanced since engaging Triserv to manage the process for us. They possess a great knowledge of our market area and continue to order from our established panel of appraisers, but are large enough to have appraisers in other areas where we occasionally lend. Their staff are knowledgeable, the quality control process is extensive, and they are very responsive to our needs. - VP of Mortgage Services, Federal Credit Union, Tennessee

In fact, even during the boom of the past few months, Triserv has still provided the same service levels to our customers. During the month of March, we performed over 13,000 appraisals, which was a record for us. We maintained our quality and service levels without missing a beat. If you can’t say that, contact us and let’s talk about how we can help you reduce costs, get rid of distractions, and lower risk.

For resources on maintaining appraiser continuity during COVID-19, please click here.

Triserv will be releasing additional information on how COVID-19 is impacting the appraisal process. We invite you to sign up below to receive those updates. We look forward to being a resource for you in these challenging times.

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