Does your appraisal process have a transparency problem?

Is your appraisal process a black box? Do you lack the transparency to understand exactly what’s happening during the appraisal workflow at precisely every step? 

Even in today’s tech-dominated world, many lenders grapple with this very problem: their origination teams don’t know what’s going on once the appraisal process is underway.

So, why does this problem happen and why does it matter? Unfortunately, many lenders – especially smaller ones – are still relying on legacy appraisal platforms or processes to conduct appraisals. As a result, these systems either lack the integrations, capabilities, or granularity to provide lenders with the basic information of what stage the appraisal process is at and if any issues have arisen. Instead, you find loan officers constantly emailing or calling their processors asking for status updates who, in turn, reach out to appraisers or AMCs to find out what’s going on.

In the end, it’s the borrower that suffers most. 

Borrower experience is key in today’s lending market, yet while the appraisal is being conducted, the borrower is essentially playing a waiting game. As a result, when appraisals come back late, require revisions, or involve additional fees, the borrowers are understandably frustrated.

The crux of this issue, however, is the fact that loan officers are unable to effectively set borrowers’ expectations about the appraisal process. If, in fact, the loan officers were looped into the process, they could take actions to resolve any issues that arise. For example, if a buyer’s agent is not answering phone calls for the appraiser to schedule an inspection, the loan officer might be able to take immediate action to resolve this delay rather than wait until the appraiser manually reaches out. 

So, at its core, lack of appraisal transparency negatively impacts borrower experience and also affects loan officers’ ability to effectively do their job.

In evaluating whether your appraisal process is truly transparent, consider some of these questions:

• Does your appraisal system send status updates to your loan origination system and point of sale system?
• Does your system provide for email notifications that notify users of progress, delays, or issues?
• Can this email system be customized so only the relevant parties are receiving the information needed?
• Does your system have a mobile app that allows you to gain insight into the appraisal process on the go? 
• Can your loan officers communicate seamlessly with your processors through your system or are they working outside the platform through email?
• Does your system have a timeline of the progress of the appraisal with important notes and documents? 
• Does your vendor have a system that allows them to quickly input updates, notes, alerts, and more? 

If your answer to many of these questions is no, then it’s critical that you should evaluate your existing systems and consider whether the lack of transparency is affecting your loan process. 

Luckily, the industry is innovating in such a way that allows lenders to quickly implement solutions that address these issues immediately and easily. New appraisal technologies offer advanced integrations, appraiser-friendly applications, and customization that ensures that every member of your loan team is receiving the updates they need.

Through these modern systems, loan officers can gain the necessary insight into the appraisal process, and then quickly inform borrowers of impending issues and adequately set their expectations.