As the mortgage industry shifts more of its traditional workflows to operations that align with the digital mortgage — such as with eSigning, eNotes, eVaults, and more — the appraisal process cannot be an afterthought. There are numerous inefficiencies associated with the “old world” of appraisals that are slowing mortgage lenders’ cycle times, keeping production costs high with manual file management processes, and negatively impacting the borrower’s experience. These pain points all unnecessarily cost lenders in excess of $258 per loan file.
This guide highlights three key areas where efficiency gains have been proven to generate measurable ROI: appraisal ordering and vendor allocation, appraisal payments, and communication and visibility. These lender-appraiser touchpoints are riddled with manual, error-prone tasks that are better executed by technology. Automation will not only expand employee bandwidth, but it will also do the work faster, more effectively and with greater accuracy.
1. Efficient appraisal ordering and automation produces savings for lenders
By focusing on modernizing operations in the three aforementioned areas, Leader Bank reported an increase in efficiency by 213%, while Alpha Mortgage has been able to reduce their appraisal desk staff by 75%. Among other quantifiable benefits, these gains drove down loan costs for the two companies. These savings are reflected as a saving of $70 per loan file for Alpha Mortgage and $130 per loan file for Leader Bank.
Lenders must prioritize optimizing the appraisal process with order management technology because efficiency equates to savings. In another example, by automating manual activities, a private mortgage company saved $192 per loan file. Emails, lack of visibility into the process for loan officers, and a need to manually invoice each appraisal order created a logistical nightmare. The use of technology simplified the process and produced a quick ROI for the lender.
2. Payment processing eliminates appraisal revenue leakage
Another point for lenders to consider when evaluating their appraisal process, the right appraisal management technology does more than just increase efficiency, it also cuts costs in other ways, such as how this regional bank eliminated revenue leakage and saved $225,000 per year in its appraisal operation.
The bank had major issues when borrowers walked away from deals after an appraisal was performed as their operation collected at close. Again, appraisal tech connected to Encompass made life easier for the bank and eliminated such a costly headache.
3. Enhanced communication and visibility in the appraisal process is a huge lift for lenders
It might not sound like it would equate to massive savings for lenders, but a transparent process translates to soft benefits for companies using appraisal management technology. The ability for loan officers, processors, underwriters, and other stakeholders to all easily view information on the appraisal pipeline goes a long way to streamlining a lenders' appraisal operation.
Larger lenders such as PRMG and Assurance Financial saw how Reggora got their teams on the same page and eliminated unnecessary emails related to status updates, a benefit that increased both the user and the borrower experience for each. A better borrower experience in line with the ideal digital mortgage means is not only a customer expectation, but can also mean more repeat business, an increasingly salient point in a shrinking market.
An efficient appraisal operation clearly produces results for lenders, but there are other opportunities available that can be explored in our free STRATMOR benchmarking consultation for lenders.
Download the guide to learn how to boost appraisal efficiency
Ready to explore how to achieve similar results as lenders like Alpha Mortgage and Leader Bank? Download this free guide to better understand how optimizing your appraisal process can reduce your cost to originate.
Fighting margin compression? With an increase in appraisal efficiency, Reggora improves margins for lenders by $286 per loan file. If you would like to learn more about how Reggora can help, reach out to schedule a conversation with our team.
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