September 26, 2021

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Mortgage News

How to clear your appraisal bottlenecks

The lack of processing last year was an underwriting. Assessments are expected to be made this year.

The refi boom is giving way to a shockingly hot real estate market and the pace of the deals makes the heads of the appraisers beat faster. Bidding wars are Force sales prices above estimated values and many sellers have so much power that they can ask to forego rating opportunities to speed up the buying process, which makes almost every stakeholder on the buy side nervous. Traditional assessments themselves are categorized as flawed in terms of both turnaround time and possible bias. With the real estate market looking more like the wild west every day, a new valuation solution is needed.

Many believe that the solution can come through digital valuation technology. Digital ratings use 3D image capture technology to digitally render a property. In this way, a storable, transferable and comprehensive overview of a property is created that an appraiser can view from the comfort of his desk. Its proponents see this as a far more error-free and faster alternative to an appraiser who drives from house to house and takes photos that may be subject to human error. Still, it is a new technology that is only now being used across the mortgage and real estate industries.

At an upcoming webinar with MPA A panel of experts organized by the head of digital valuation, Class Valuation, will discuss this technology, its promises and any kinks that have yet to be worked out in the system. The panel will be moderated by Faith Schwartz, President of Housing Finance Strategies and an expert on housing and mortgage policy. Speakers include Lyle Radke, director of collateral policy for Fannie Mae, David Battany, executive vice president of capital markets for Guild Mortgage Company, and Scot Rose (pictured), chief innovation officer for Class Valuation. Together they will break down the most acute problems of traditional assessments and explain how digital assessment technology can overcome them.

“The most noticeable problem with the conventional assessment process is the lack of standard and transparent collection of property data and significant capacity loads,” said Rose. “That’s because it’s done by a human and they choose what they want to show off a property. If you put a human in control of the capture of these images, you run the risk of not being able to see the full story compared to a 3D scanning technology for which we can guarantee 100% transparency. “

By capturing the entire asset to be reviewed by an appraiser behind a desk, Class Valuation technology enables multiple digital walkthroughs and duplicate reviews in a fraction of the time. Additionally, Rose found that downstream stakeholders had far better access to real estate information. Perhaps most importantly from a creator’s point of view, this all goes faster.

Rose explained that by using technology to capture the property, digital appraisals make more efficient use of appraisers time. A trained operator can carry out the acquisition quickly and send the data directly to an appraiser, who evaluates the property with his critical eye on the basis of the scan. This leads the evaluation process from a trend reversal lasting several weeks to something that can be achieved in a few days. With this tool, a buyer can offer the speed a seller demands without sacrificing the security that comes with a review.

“It’s the way of the future,” said Battany. “With the digital data, both government and private retail mortgage investors can better understand the quality of the collateral on which their investment is based.”

Battany noted that digital appraisals can be helpful in disaster scenarios where lenders need to quickly assess whether their newly funded but unsold loan has been hit by a flood or a hurricane. He sees a number of bottlenecks that are slowing the efficiency of the appraisal process and believes the digital appraisal process can remove many of them.

Rose and the other panellists agreed that this technology is new and that the engagement of the entire mortgage industry needs to be perfected. Still, they hope to show at the webinar that this technology can increase the efficiency and success of the entire industry. At the same time, they want to drive home that for a leap and trustworthy digital reviews, mortgage professionals not only trust people (prone to human error), but also technology that is designed to eliminate errors.

“It’s not about trusting a third party, it’s not about trusting a non-appraiser that they know what they’re doing, it’s about having trust and confidence that technology will do the job for you” said Rose. “Basically, the person doing the scan has the job of getting the equipment in place so the technology can do its job.

“It’s about including digitization in the evaluation component of the process. The rest of the mortgage process is digitizing and bringing more efficiency, consistency and credibility to the process … We do the same with the valuation process. “

To hear more from Scot Rose, David Battany and the other panelists gathered to discuss the future of the judgments. Register for the webinar here.