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June 2017

I hope everyone's summer is off to a great start! Hard to believe we're halfway through the year already. In this month's Dart Board, I wanted to dig into the appraisal process - what happens behind the scenes at Dart regarding your orders, and also some tips for you to share with your borrowers on what they should expect.

MD2017

Michael Dresden
President
Dart Appraisal

Ready, set, go! The file management process begins as soon as each order is received. Dart assigns orders to the best matched appraiser based on file score - we do not broadcast orders. Each appraiser in our system is given a file score for each potential assignment. Scores are continuously updated based on the appraiser's ten most recent orders, and are comprised of quality, due date compliance, order acceptance, and proximity. The appraiser with the highest file score and no disqualifiers should be selected for the assignment. Our system sends that appraiser an assignment request immediately, and the appraiser has up to 6 business hours to accept or decline the assignment. (Our team contacts the appraiser if they have not responded within that time period.) If the appraiser declines, our team sends the assignment to the appraiser with the next highest file score. In cases where orders need to be manually assigned, our system provides file score information to our staff to utilize when assigning orders.

Once the order is accepted, the appraiser is provided with the property information along with entry contact information and any relevant documents (ex: purchase agreement). Dart includes a formal engagement letter with each order, detailing requirements for the product as well as any client-specific requirements. The appraiser is to reach out to the entry contact within 24 hours to schedule the inspection. Borrowers should be encouraged to take the first available appointment time the appraiser offers when possible. Appraisers are incredibly busy, especially this time of year, and avoiding any delays with scheduling the inspection will be beneficial to all parties.

The Inspection. Once the inspection date is set, the appraiser will create a preliminary list of comparables to use. (After the appraiser has viewed the property, the comps he planned on using might go right out the window.) A typical inspection can take anywhere from 10-30 minutes. Complex properties usually warrant a longer physical inspection time. The technology available to appraisers has greatly reduced the time spent physically inspecting properties. (Laser measuring devices, sketch applications and high-quality digital photography are just a few examples.) Besides not having to physically measure each room with a tape measure, appraisers also don't need to take as many notes since they can reference multiple photos of the home while back at their office. Some apps available also enter property data right into the report via tablet or laptop computer.

At Dart, our service level agreement with appraisers is that reports must be complete within 3 days of inspection. Once the completed report is received, our Quality Control team reviews the report before delivering to you, the client.

Tips for Borrowers. We asked some of our appraisers what, from the borrower's side, makes their job as easy as possible. A few of their responses were:

  • Provide the appraiser with a list of updates/improvements that have been made to the home. While improvements are usually discussed during the inspection, it is helpful to have a list to reference while completing the report.
  • Make sure the appraiser has easy access to all areas of the house, including garage, attic, crawlspace, bedrooms etc.
  • Quarantine any pets during the inspection, for the safety of the appraiser and the animal.
  • Lenders should remind the borrower not to talk about value with the appraiser. Even casually asking the appraiser "what he thinks the home is worth" can be awkward, and in some cases, may make the appraiser feel that they are being pressured (leading to a potential AIR violation). Appraisers are prohibited from talking about value with the borrower; the lender is the intended user of the appraisal, not the borrower.
  • Borrowers should also be aware that the large majority of appraisers are independent contractors. They may not be wearing a uniform, although best practice on the part of the appraiser would be a business card and professional attire.

Post-Delivery. Once the appraisal is delivered, any post-delivery requests (corrections, addendums, etc.) should be routed through the AMC. Objective factual errors, such as discrepancies in GLA measurements or missing commentary regarding adjustments, should certainly be sent back for the appraiser to address. Appraisers are human and they do make mistakes. In any post-delivery request, it's important to avoid any insulting or derogatory language, as well as any language that violates the Fair Lending Act. As an AMC, Dart sanitizes all post-delivery requests to ensure AIR compliance before sending to the appraiser. 

If the appraisal comes in low, and a formal Reconsideration of Value is submitted, it is best to avoid emotional appeals in your request. We understand that a mortgage transaction is incredibly personal to the borrower and seller, however the appraisal is based purely on data. Consider sending up to three, well-researched sales for the appraiser to consider in your request. Sales should be more similar than the comps used in the appraisal (not just the three most expensive nearby sales), and be located in the subject market. Remember, the appraiser is charged with creating an opinion of value. The value is what the home is worth, not the price that someone is willing to pay for it.

Conference Update. Earlier this month I attended MBA's Chairman's Conference for the first time. This was an incredible event in Lake Tahoe which brought together roughly 200 industry leaders. Dart is a proud premier member of the Mortgage Bankers Association, and I was thrilled to have the opportunity to attend this event as part of our membership. We've got another busy few months ahead of us in terms of industry events, with the Michigan Mortgage Lenders Conference, Florida Association of Mortgage Professionals Convention, and Mortgage Collaborative Summer Conference on deck this season.

Military Drive Update. In May, Dart teamed up with Operation Care Package of Michigan (OCPMI) to supply overseas troops with care packages. Through the donations of staff and local appraisers, we collected nearly 600 items to be included in care packages! Additionally, we had several people let us know they made a monetary donation directly to OCPMI. Thank you so much for all of your support!

I truly enjoy reading your comments and suggestions in response to recent issues of this newsletter. If you have any feedback to share, or if there is anything we can do to assist with your appraisal management needs, please don't hesitate to contact me.

Thank you,


Michael Dresden
President
Dart Appraisal

 

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