Originating a mortgage takes too long. Who says so? Borrowers, real estate agents, loan officers, and lenders know that every day the loan is in process is costing them money. But perhaps that’s just the way our industry is. Things take time.
Don’t you believe it!
When COVID struck, and Fannie Mae and Freddie Mac looked for ways to keep consumers safer during the loan origination process, millions of appraisal waivers were issued. Suddenly, the time to originate a loan — and the cost — shrank dramatically.
People working in the lender’s appraisal department were not surprised by this. They knew intuitively the results of new research recently completed by Reggora with STRATMOR Group. From the time the lender realizes they need an appraisal until the time they get a completed report is, on average, 19 days.
Taking time out of the process with appraisal innovation
Lenders won’t receive an appraisal waiver from the GSEs for every loan they originate. They’ll have to find another way to save that time, which is why more lenders are focusing now on a streamlined appraisal process.
Lenders know this is a serious problem and they know what it will take to fix it. Lenders’ sentiments toward new appraisal products show that the market is ready for new, streamlined approaches to valuation. A Fannie Mae study released in the first quarter showed:
- 94% of lenders surveyed indicated “appraisal modernization is valuable”
- 61% “think it’s very valuable”
Why is this so serious to them? In our work with STRATMOR, survey respondents told us that 52% of appraisal-related lender time is spent on scheduling and follow-up. With falling loan volumes, they are reducing staff. The old way of operating is just not sustainable. It’s time to make some changes.
Appraisal innovation: a lighter lift than you might think
How can this be best accomplished? Reggora just published a new white paper that shows how successful lenders are approaching this process and the benefits they are enjoying.
What will surprise many is that updating the lender's appraisal department is a relatively light lift, given there’s technology specifically created for this department and expert teams who have experience implementing it. And the results are impressive.
Consider PRMG, a leading lender with 250 branches and over 1400 employees. Within 60 days of implementation, PRMG turned off ordering on their previous systems for 90 percent of their branches, increasing efficiency, and communication among all players in the appraisal process.
Fighting margin compression? Reggora solves common pain points felt in the appraisal process to significantly reduce a lender's cost to originate, thus improving margins by $286 per loan file. Find out more by downloading our white paper on why lenders should focus on optimizing the appraisal process.
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