Fannie Mae certainly is making headlines again. There are quite a few comments coming from every industry profession regarding Collateral Underwriter’s implementation last month. Various lenders have embraced the system.
So far, Collateral Underwriter has only proven the industry’s continuous need for Appraisal Management Companies. AMCs have been growing and changing long before the financial crisis of 2008, and while some say that there are 100% automated ways to check an appraisers’ work – the past few weeks have shown that there is a lot more to the appraisal process than the final quality control check. While important, and vital, to an appraisal report – there is a lot more that goes into the appraisal process than the final QC.
The release of Collateral Underwriter has shown local and national appraisal management companies that they are still needed to help mitigate the entire appraisal process. Before an order is ever even placed, AMCs work to ensure they have the most qualified appraiser panel, and effective communication to ensure their clients stay compliant. Lenders who decide to take appraisal management in-house are committing to their lending staff and consumers to facilitate the appraisal experience. That means with the ebb and flow of business; lenders are responsible to staff appropriately to ensure efficient loan closing. This results in either underutilized or overworked staff, depending upon whether the tide is in or out.
Since Collateral Underwriter does not effectively change the vast majority of the management process, what advantage does a lender have in bringing management in-house? Conceivably, could it be to cut out the middleman and return higher fees to the appraiser? The facts do not seem to support this.