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Internal Appraisal Panel; Why We Left the Broker Channel; Never Pushing Values

Internal Appraisal Panel; Why We Left the Broker Channel; Never Pushing Values

APPRAISER WHO LIVED 100 MILES FROM SUBJECT PROPERTY

In October, I shared an appraisal horror story about a huge Appraisal Management Company hiring an appraiser who lived 100 miles away from our subject property.

The appraiser crossed a major freeway to find comparable sales in a vastly inferior neighborhood, and came in $200,000 under contract price (and under value).

When we tried to rebut this extraordinary negligence, the Appraisal Management Company not only dug in its heels, its managers became belligerent.

It was shocking to say the least, but what was more shocking was the fact that similar situations arose time and again with large Appraisal Management Companies simply b/c we were not able hold anyone accountable.

And, as I repeat often, bad appraisals were a major reason why we left the broker channel.

“Mortgage Brokers” do not underwrite loans in-house, but instead send all their loans to other “Wholesale Lenders” who underwrite and fund the loans for the brokers.

We loved that channel b/c of its flexibility but we left it b/c ALL of the Wholesale Lenders forced us to use large Appraisal Management Companies, and we had far too many appraisal issues.

We are now in the “Mortgage Banking Channel” where we do underwrite and fund our loans in-house, which of course provides many advantages.

MORTGAGE BANKS HAVE INTERNAL APPRAISAL PANELS

But one of the biggest advantages is our ability to set up our own appraisal panel, entirely comprised of very skilled appraisers of our own choosing.

The benefits of having our own appraisal panel cannot be overstated, particularly in hot markets where values are difficult to support.

Our appraisers love working with us too b/c we pay well and b/c our Appraisal Manager is so skilled, reasonable and professional herself. As a result, our skilled appraisers tend to be extra-accountable b/c they want to stay in our good graces and on our panel.

WE NEVER WANT APPRAISERS TO PUSH VALUES

While the appraisers on our panel go way out of their way to support values for us, we never want them to push values outside of the range supported by the comparable sales data.

Whenever an appraiser does so, underwriters, with all of their own access to data and algorithms, immediately get suspicious and then order reviews which often results in significant cuts in value.

Making matters worse, such appraisers also get “black marks” on their records which result in excess scrutiny in the future, or get put on an actual blacklist exclusion at a particular lender.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167