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Human vs. Automated Appraisal Management Services

As technology advances, artificial intelligence and automation are playing an increasingly larger role in a variety of industries. One such sector is appraisal management, an industry that facilitates real estate valuation by providing services such as selecting an appraiser for mortgage lenders and delivering the appraisal report to them. Doing so helps facilitate an efficient appraisal process and provides a legally required separation between the lender and the appraiser.

One important service appraisal management companies, or AMCs, provide is the review of reports submitted by appraisers. AMCs have review departments that play a quality control role in the management process. These departments:

How to Pick the Right Appraisal Management Company (AMC) for Your Needs

Remaining in compliance is hardly the sole reason to sweat picking the right appraisal management company (AMC).

When appropriately selected, these businesses go above and beyond to save your bank or lending institution valuable time, money and better-suited resources — all while obtaining the most qualified, comprehensive and unbiased property appraisals possible.

However, how to choose an AMC has become a somewhat convoluted process. In recent years, the leap in lending regulations and stricter attention placed on mortgage practices has rendered it difficult, if not impossible, for most banks to perform compliant and effective in-house appraisals.

Key Benefits of an Appraisal Review

When you stop to think about the benefits, an appraisal review is truly worth its weight in gold. The main objective of ensuring accuracy in the estimation of a property's value is a no-brainer for community banks and credit unions alike. A comprehensive appraisal review locks down a clear assessment of the property, going over every detail to protect the financial institution's investment. A real estate appraisal report's accuracy is just one key benefit, though, and appraisal reviews offer numerous advantages to support their required usage.

10 Ways AMCs Improve Your Appraisal Management

Not too long ago, the process of appraising houses was a bit like the Wild West. In the years leading up to the housing crisis and recession, loan officers lenders had more of a hand in the appraisal process. In some cases, that led to lenders trying to influence appraisers to increase the perceived value of a home. In 2007, 90 percent of appraisers reported feeling pressure from someone — such as a lender, borrower or real estate agent — to inflate the appraised value of a home. In 2003 that number was 55 percent and I would like to know the current percentage now after more than 10 years have passed since the beginning of the housing crisis.

5 Reasons Why Relationships are So Important to the Appraisal Process

Good relationships serve as the cornerstone in just about every line of business. Tasks become easier and company goals are more attainable when everyone works together. A company's plans run more smoothly with respect, honesty, and consideration at the helm of the partnership. As with any industry, the success of the appraisal process depends on a solid relationship between the appraiser, the appraisal management company, and the bank or credit union.

At SAMCO, we strive to ensure our relationships with appraisers and financial institutions are second to none. Here are a few of the key reasons why we believe good relationships are so vital in our line of work.

5 Tips for Checking if Your AMC Fee is Accurate

If you are a mortgage lender, appraisal management fees are a necessary part of your business. Before you choose an appraisal management company, you want to make sure you are getting a fair price. It's important to know how to tell if an AMC fee is accurate. What is an average AMC fee? How much do AMCs typically charge? Here are five ways to tell if an appraisal management fee is accurate.

How to Check the Accuracy of an Appraisal Management Fee

1. View the Reports

Even if you have an idea of how to check the accuracy of an AMC fee, you cannot do it unless you are getting regular reports. You should be receiving monthly or quarterly reports on all fees your AMC is generating. Make sure to read them carefully when they arrive.

Facetime with your banker

The times have certainly changed! Just a few short years ago no one would even have thought of applying online for a mortgage. A recent study by the American Bankers Association showed that 60% of real estate borrowers today prefer to apply in person for their mortgage instead of applying online.  I’m not surprised that it’s 60%, I’m surprised that 40% of today’s borrowers would choose NOT to be face to face with their banker. That same survey revealed that 66% of today’s borrowers are not confident with their knowledge of the mortgage process. Could be a fairly strong correlation and the reason the borrower would want a ‘real’ person helping them.

What’s in your wallet (or home equity)?

CoreLogic recently showed that the value of home equity has doubled in the past five years. Most of that is not from borrowers paying down on the principle but in the added value of real estate. The value has gone from $6 trillion five years ago to $13 trillion this year. Not only that, but CoreLogic is predicting another $1 trillion additional being added to the equity side in this year alone! Now there is a wide variation depending on what part of the country you are in, but everyone has gained equity.

Household debt

The New York district Federal Reserve came out with a very interesting report, household debt has hit a level that is above the peak level of 2008! Does this mean we’re in trouble? I don’t think so. Household debt level includes credit cards, consumer loans (such as autos), student loans and also real estate (or home loans).

Real Estate loans have dropped from a 2008 high of 73% to 68%, and with the tougher lending requirements since 2008, those real estate loans are in good position credit wise. The real difference in credit from 2008 is student loans and auto loans. Those categories are significantly higher.