At Reggora, we believe lenders will truly meet consumer expectations only when a borrower can get a home loan in a few days.
The industry has made remarkable strides the past few years. Point of sale systems make it easier than ever to apply for a loan, closing solutions allow borrowers to eSign most of their documents, and much more. Getting an appraisal done, however, remains slow, inconsistent, and disrupts far too many of your deals.
So as we work to completely remake the appraisal process, it’s essential that we reimagine how you actually get appraisals fulfilled.
That’s why we’re announcing The Appraisal Marketplace.
Built on our Appraisal Management Software Platform, the all-new marketplace allows lenders to fulfill appraisal orders directly from the platform — without relying on an AMC or managing a fee panel.
Even better, by leveraging the data running through our platform, the marketplace’s “Uber-style” allocation algorithm matches every order with the appraiser that’s truly right for the job. This superior allocation method provides lenders with the fastest turn times, lowest revision rates, and lowest fee escalation rates in the industry. Seriously. Book a complimentary appraisal vendor performance consultation and we’ll show you how it performs in comparison to the results you’re getting today.
“Within a matter of weeks we saw a 35% improvement in our turn times. That’s a dramatic improvement, especially in the craze of a refi wave where if we can cycle through them faster, we can bring on more & more business.”
VP & Sales Director, North Easton Savings Bank
Reggora’s approach to appraisals
Despite the industry’s desire to provide a “digital mortgage” or, more simply, to provide mortgages in less than five days, there has been little to no change to the way appraisals are done. That’s obviously a problem. Lenders often describe the appraisal as the “long pole in the tent” and, when demand surges like it did during the pandemic, this part of the origination process becomes almost unbearable. Turn times routinely went over 30 days, and that’s with the GSE’s providing appraisal waivers on almost half of their volume (46%, to be precise).
And slow appraisals is just one problem. Low quality reports make the process even slower because you have to wait for revisions to get done. And you have to staff enough of the right underwriters to perform quality control on every report, which is another slow, manual and often paper-based process. That quickly gets expensive, is still error-prone, and it isn’t the only way appraisals hurt your bottom line.
Revenue leakage from appraisal fees can quickly add up. Between the borrowers who walk away, or go with another lender, when the lender has already ordered an appraisal, and fee escalations that don’t qualify for a change of circumstance, lenders routinely lose hundreds of thousands of dollars in uncollected fees. Some lenders even pay the credit card processing fee, making their losses even worse.
These problems persist because the way we get appraisals done hasn’t changed for the better in, well, decades.
Today, most appraisal orders are sent to an appraiser, or an AMC who then sends it to an appraiser, based on the appraiser's general location and performance, one at a time. This rudimentary process relies on incomplete and imperfect information. For example, one lender wouldn’t know when allocating an order that an appraiser may have seven other outstanding orders with another lender already. Nor do they know where an appraiser is traveling to over the course of the next week. As a result, the overall logistics of appraisal fulfillment are impaired and turn times, revision rates and fee escalation rates remain lackluster — despite the industry’s best efforts to improve them.
Reggora is in a unique position to solve this problem.
We can achieve superior appraisal performance because of the incredibly rich data running through Reggora today. Using this much larger set of accurate, real-time data points to match orders with appraisers, the marketplace significantly improves performance by automatically matching each order with the appraiser that’s truly right for the job. Our “Uber-style” algorithm uses an appraiser’s proximity to the order, their proximity to an order that already exists, how many orders they’re currently working on, each order’s due date, and much more.
Specifically, our algorithm uses four key groups of data points to select the right appraiser:
- Smart Capacity: Number of orders an appraiser can handle before their performance suffers.
- Outstanding Orders: Current orders & the distance between those properties & the subject property. Accounts for the appraiser already being in the area for other property inspections.
- Distance from Appraiser Address: Distance between the appraiser & the subject property. This is the actual driving distance to account for the route to get there.
- Quality: Combines revision rate & appraisal risk scoring to ensure that the most competent appraisers are assigned.
What does this look like in practice? Let’s say an appraiser is inspecting a property in a neighborhood of Newton Massachusetts on Tuesday for Lender ABC. A different lender, Lender XYZ, also needs to get an appraisal done in Newton. The algorithm will batch these orders together for that appraiser so that he could inspect two properties in one go instead of getting another appraiser to come to the neighborhood. This keeps appraisers in tight knit geographies (building their local expertise & reducing drive time) while improving turn times for lenders
When you just compare the traditional way orders are allocated with our algorithm’s approach, you can clearly see the difference. Lenders only utilize their own individual data which leads to a tremendous amount of wasted time spent driving. Why send someone all the way across town when there’s already an appraiser a mile away? The results get even better when the appraiser close by has a higher quality score, and isn’t currently working on another order.
When you look at the data, quality becomes just as obvious. Most appraisers start to rush when they have too many orders and, naturally, quality starts to suffer.
I could go on, but you get the point. By more intelligently allocating orders, we’re able to significantly reduce appraisal turn time, revision rates & fee escalation rates. That means healthier margins, a better experience for borrowers and realtors, and of course — happy Loan Officers.
And data-driven allocation isn’t the only reason we’re able to deliver better performance. Because the marketplace is built on our appraisal management platform, and that’s already integrated with your technology stack (LOS, POS, etc), we’re able to solve problems that traditional approaches cannot. For example:
- Borrowers can instantly schedule inspections from your POS. Instead of going back and forth with an appraiser via email/phone, borrowers simply select an open time slot and the system will do the rest. No more phone tag. We’ve seen this simple change shorten turn time by multiple days.
- The correct fee is automatically disclosed upfront due to our native integration with LOS’s and low fee escalation rate.
- Basic errors in the report are eliminated by automatically checking it against loan file data in the LOS. There’s a surprising amount of basic errors (borrower name, property address, etc) in appraisal reports. Instead of allowing those reports to get sent back to the lender with errors, which are manually reviewed by underwriters, then sent back to the appraiser for revisions — we automatically check the report against loan file data in your LOS. That way basic errors get fixed and you don’t have to do anything.
By combining appraisal management software with fulfillment in this way, we’re finally able to bring the appraisal up to speed with the rest of the origination process. And, the truth is, we started testing the marketplace’s performance during the pandemic when volume was through the roof. So we’re not just confident that it will improve your operations now, we know you’ll be prepared when volume picks back up and appraisals get incredibly slow again.
“After using The Appraisal Marketplace for a few months, I am very pleased with the ease of the platform and i’m confident it’s able to find us an appraiser [on all of our orders]. We have the option to use another AMC in Reggora, but at this time we don’t see a need because the marketplace has been a great fit.”
Processing Manager, Assurance Financial
The next step towards five day mortgages
At Reggora, we’re committed to making two-day appraisal turn times a reality. The Appraisal Marketplace is the next step and we couldn’t be more excited to get it into your hands.
Reach out to our team for a complimentary vendor performance consultation and we’ll show you just how much better your appraisals can be.
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