Traditional Appraisals No Longer the Industry Standard
Traditional appraisals are no longer considered the default home valuation option, according to the updated Fannie Mae selling guide released March 1, 2023. The speed, accuracy and transparency servicers can achieve from digital mortgage and appraisal management technology has become a must-have. Tech-savvy lenders, originators and service providers are leveraging digital mortgage technologies to speed up loan turn times, enable faster property data collection, eliminate administrative overhead and deliver more accurate results. The pandemic accelerated the demand for alternative appraisal methods and technology-driven appraisal solutions, proving that remote data collection and desktop appraisals are just as effective as traditional appraisals.
We are not surprised to see a major shift in industry standards, especially since in 2022 the FHFA declared desktop appraisals are here to stay. And now, Fannie Mae has updated its selling guide to encourage valuation modernization. The guide states, “valuation modernization helps lenders, appraisers, and risk investors manage collateral risk more effectively, while also benefiting consumers via greater appraisal accuracy, lower costs, and increased speed of loan decisioning.”
We could not agree more. In fact, Accurate Group partnered with Fannie Mae prior to the release of the new selling guide to demonstrate how our real estate appraisal, title, data, analytics and e-closing solutions are leveraged for appraisal modernization. After extensive review and client testing by Fannie Mae, we are one of seven providers approved by Fannie Mae for the new Value Acceptance + Property Data valuation modernization initiative.
This new option allows lenders to “utilize property data collection by a third party who conducts interior and exterior data collection on the subject property… The lender must verify and be able to demonstrate that data collectors are vetted through an annual background check, are professionally trained, and they possess the essential knowledge to competently perform the property data collection.” Appraisals are no longer the industry standard. There are other, less expensive options with faster turn times.
Home valuations are long overdue for digital mortgage and appraisal modernization efforts.
Many loan originators still depend on labor-intensive, repetitive and time-consuming processes to manage the full loan cycle. This approach limits the visibility, convivence and speed borrowers have grown to expect. Digital mortgage technologies can automate and streamline just about any process, including workflow management, back-office process improvements, appraisal management, exterior and interior property data collection, income, asset and employment verifications, title verification, e-closing and compliance and document management.
Surveys conducted by Forbes, McKinsey & Company and Fannie Mae reinforce our belief that these technologies will have a major impact on the future of mortgage lending.
- 99% of lenders believe that technology can help improve the mortgage application process. (Forbes)
- Benefits include simplifying the entire process (74%), reducing time to close (70%) and minimizing data entry (67%). (Forbes)
- 94% of lenders say appraisal modernization efforts are valuable to the industry. (Fannie Mae)
- 78% of large banks and lenders say streamlined, automated processes at scale will transform and disrupt the industry. (Forbes)
- 30% of all key front- and back-office elements of mortgages – including origination, documentation and closing will become digitally integrated and enabled. 60% say that this will happen by 2025. (Forbes)
- 42% to 67% of borrowers say they are satisfied with the mortgage process, and banks fared worse than non-banks, lagging by about 20% to 30%. (McKinsey & Company)
- And satisfaction drops by roughly 15 percentage points if the lender takes more than ten days to provide a decision on the application. (McKinsey & Company)
Does your current technology stack have what it takes to embrace appraisal modernization?
The industry is at an inflection point. Lenders, originators and service providers are contemplating their next move. Knowing traditional appraisals are fading out of the mainstream and competitors have already adopted robust digital mortgage technology platforms to transition into the age of appraisal modernization – where do you stand? Does your current appraisal, title, data and analytics technology have what it takes to enable transformation in the digital age? If a consumer is deciding between your business and a business that has undergone appraisal modernization and offers the speed, transparency and accuracy they expect – which do you think they will choose?
If you are thinking about implementing appraisal modernization, check out The Lender’s Guide to Appraisal Modernization eBook.
Ready to get started?
Accurate Group’s appraisal modernization and property data collection suite, powered by its proven flagship technology products, ValueNet™ and GroundWorks™, meet the data standards for all industry appraisal modernization initiatives on the market today.
Lenders who leverage ValueNet and GroundWorks proven technologies and processes on purchase and refinance origination loans eligible for Fannie Mae’s Value Acceptance + Property Data experience reduced cycle times plus significant cost savings when compared to traditional and residential appraisals, along with greater accuracy and a better borrower experience.
In addition, Accurate Group’s affiliate, AppraisalWorks™, offer lenders a cloud-based approach to managing all of their appraisal efforts, AppraisalWorks empowers lenders to work with multiple providers and eliminate screening overhead by consolidating access to approved service providers on Fannie Mae’s Value Acceptance + Property Data list.
AppraisalWorks provides an agnostic SaaS platform to lenders and servicers, enabling them to build a vendor panel of AMCs, appraisers, or both, and use the system to manage all appraisal orders across all providers from a single technology platform, complete with intelligent reporting and dashboards.
Going Beyond Appraisals to Modernize the Entire Loan Process
Accurate Group is one of two companies listed under the approved service providers for Fannie Mae’s Value Acceptance + Property Data that also offer title and closing solutions in addition to valuation services. Our appraisal, property inspection, title and closing technologies are designed to plug into any digital platform, making Accurate Group the ideal choice for lenders who want to drive greater efficiency, improve loan turn times and ultimately better serve the consumer.
Through its focus on continuous technology innovation, Accurate Group has developed the broadest set of technology-driven appraisal, valuation data collection and title products on the market today, serving the majority of the top 25 U.S. real estate lenders.
Contact us today to accelerate your appraisal modernization and digital mortgage efforts.
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