This article was originally published in Today's Lending Insight by the Progress in Lending Association.
When considering which strategic initiatives to tackle first, the appraisal process does not always surface as a top contender for mortgage lenders. This is understandable, given the obvious impact that so many other aspects of the mortgage process have on the bottom line. Lenders typically prioritize areas with the most obvious ROI, such as loan volume, pull through rate, and employee headcount.
But when you take a closer look at the appraisal process, you see that it actually impacts many of these vital areas and more. The appraisal also contains an abundance of “hidden costs” that would add up in substantial ROI and savings if addressed.
Below I’ve outlined ten ways that implementing modern appraisal technology can result in substantial cost and operational savings and yield newly found profit for mortgage lenders:
- Shorten appraisal turn times: How would your bottom line improve if your appraisal turn times decreased by one day? Two days? Three days? Appraisal technology is focused on connecting your systems, stakeholders, and manual processes to make the appraisal faster and easier, like it did for North Easton Savings Bank.
- Increase appraisal capacity: How many more loans could you process if the appraisal wasn’t a bottleneck? Automating manual tasks such as scheduling, payment processing, and collateral reviews means your team can get more appraisals processed with less effort.
- Reduce manual efforts: How much time does your appraisal desk spend manually replying to inquiries about statuses, scheduling, and issues? Modern appraisal technology can provide visibility to all stakeholders, consolidate communications, and automate notifications.
- Let your sales team focus on selling: How much time is wasted by your LOs tracking down appraisal statuses? Modern appraisal technology can help your loan officers stay focused on sales, by automatically keeping them informed and giving full visibility into their appraisal pipeline, something the LOs at North Easton Savings Bank are thrilled to have.
- Automate change of circumstance and appraisal re-disclosures: How much money are you losing by not having an automated Change of Circumstance / appraisal re-disclosure process? This is a perfect example of how a simple automation can go a long way to reducing your costs.
- Avoid delayed closings: How often are closings delayed because the appraisal wasn’t sent to the borrower within 72 hours of close? How many appraisals do you have to physically mail? Again, a small investment in automation can add up in recovered profits, like this regional bank that saved $225K and eliminated revenue leakage. Automated appraisal e-delivery to the borrower ensures you stay on track.
- Recruit and retain loan officers: Would you be able to recruit and retain loan officers better if they had a better appraisal experience? Look for appraisal technology and offers a modern interface, mobile application, integrations across your tech stack, and offers full transparency to loan officers.
- Increase wholesale volume: Would brokers do more wholesale volume with you if you had an improved appraisal ordering process? What about better transparency? Leading appraisal technology is built for ALL stakeholders, providing updated visibility and ease of use.
- Improve appraiser loyalty: Would your appraisers be more willing to work with you and pick up your orders faster if you offered a more accessible user interface? Look for modern appraisal solutions that offer valuable features for appraisers, such as an easy-to-use interface, mobile application, accounting tools, and more.
- Increase borrower satisfaction: How much would your borrower net promoter score improve (and therefore lead to more referrals) if your borrowers had a transparent and streamlined appraisal process? What if your appraisal solution was integrated with your point of sale system? Borrowers are often left in the dark when it comes to the appraisal, leaving them uneasy and unconfident. Give them full visibility and confidence that their appraisal is on track, a huge win for large lenders such as Assurance Financial.
All told, these savings amount to $258 per loan file for lenders, outlined in case studies like the one we created for Alpha Mortgage. What lenders don't know can absolutely cost them, so it's vital to know how appraisal tech provides an ROI.
This is just a sampling of the ways that a modernized appraisal process can reduce your costs and improve your overall bottom line. When you think about how many people, systems, and processes are involved in getting the appraisal processed and delivered, the opportunities for savings and optimization are massive.
Want to see more? Request a demo and see how Reggora can help cut costs and boost the bottom line in your appraisal process.
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