The mortgage industry is constantly evolving. Today, we are seeing that more often than ever as we work through COVID-19 and recover from the ripple effects it is having on the world. It has changed how we as a country operate and has specifically brought a large amount of changes to the mortgage industry. Every touch point of the mortgage process has been impacted due to the virus, as well as every person involved. With social distancing orders in place across the nation, lenders, mortgage brokers, borrowers, real estate agents, appraisers and many others have had to change the way loans are processed and closed.
Although the industry itself is constantly evolving in terms of the guidelines and products available, it has traditionally been slow to accept new technology, especially when it comes to the process of appraisals.One of the biggest changes that happened in this industry was in 2017 with the launch of Fannie Mae’s Property Inspection Waiver (PIW) and Automated Collateral Evaluation (ACE). This allowed for lenders to offer appraisal waivers on qualifying purchase and refinance transactions, and also helped close roughly 25%- 30% of loans without an appraisal being needed.
In order to meet the demand of the other 70%-75% of loans being closed with a traditional appraisal, many companies in the industry began focusing on creating different systems that will help not only speed up the appraisal process, but standardize it as well. This was already happening before we were faced with the global pandemic; however their efforts were accelerated in response to COVID-19.
THE SHIFT TOWARDS DIGITAL
The amazing thing about the mortgage industry is how rapidly everyone can work together to be solution-focused during challenging times. One thing that many appraisal management companies have been working towards is creating technology and taking advantages of digital opportunities that would make the appraisal process faster and more standardized across the board.
What we are seeing today is that many of the AMCs are taking parts of their future technology and quickly adopting it to meet the needs of the industry during these times. Some of the things they have been able to adapt their software to include allowing for a borrower to click on a secure link from an email where they can credential in and provide property details.
The system works by guiding borrowers through taking pictures of their home’s entire interior including any upgrades they may have added. All of the photos and data are then packaged up and sent to the appraiser so that they are able to review the information and see the inside of the home without actually having to enter it themselves. To protect the credibility and accuracy of everyone involved in the purchase including the lenders, borrowers and appraisers there are geolocation integrations that ensure the home being photographed is the accurate one.
The capability to incorporate various technology tools and geocoding has, and will continue to, revolutionize the appraisal industry and the mortgage industry as a whole. But, the key to the success with these new technologies is the ability to be agile enough to quickly embrace and implement them as smoothly as possible.
EMBRACING NEW TECH
For years, technology has continued to embed itself deeper into the mortgage industry. It wasn’t too long ago when everything needed to be wet-signed and done in person. Now in most of the states borrowers are able to do 100% virtual e-closings anywhere with access to Wi-Fi. Borrowers are able to apply fully online, and sign and submit documents.
Technology is a huge advantage to the mortgage industry and it makes closing loans a faster, easier and more seamless process. Technology is a tool that can help the appraisal industry not only continue to operate,but become more operationally efficient. By standardizing the appraisal process, it will expedite originations and help real estate agents, borrowers and mortgage brokers to close loans even faster and will be a game-changer for all involved.
These new digital tools will only help to strengthen all aspects of the mortgage, appraisal and real estate industry. It’s also important to note that it will help drive these industries to play a huge part in the revitalization of the economy in the coming months.
CHANGE YOUR MINDSET
Change is inevitable in any industry. More importantly, it is how the industry responds to change that determines its success and longevity moving forward. Right now, it is key to understand that it is not just our industry that has changed and continues to change, it is every industry and every person that has been impacted by COVID-19 and is adapting the new “normal.”
For the appraisal industry, it is now more important than ever to maintain an agile mindset and to actively invest in solution-driven options for their industry. There is a tremendous need right now to be agile and able to change and adapt at a fast pace.
By altering the approach to handling change, it is an opportunity for growth that will help AMCs expand on their skill sets and the appraisal options that can be offered through lenders with guidance from the GSEs. This is going to be crucial to all aspects of the mortgage industry in order to stay ahead of the needs of the market and thrive.
MOVEMENT TO MODERNIZE
There is a movement happening within the mortgage industry of re-inventing and modernizing every process involved, resulting from economic changes, advancement in technology and consumer preferences. Social distancing has only accelerated this movement by proving a need for digital resources in the homebuying process.
As lenders, real estate agents, appraisers, mortgage brokers and the GSEs continue to develop and use new technology, it will create further efficiencies throughout the industry and the ways in which we buy, sell and refinance our homes will only advance to a better and more efficient place.