American home appraisal firms are streamlining further their appraisal processes and administrative operations to cut costs and to shorten appraisal turnaround time without sacrificing quality.
Because of the housing slump, home appraisal companies and individual home appraisers not affiliated with companies have been struggling with reduced appraisal work and income.
According to many professionals in the real estate sector, the difficulties of home appraisers further worsened when the Home Valuation Code of Conduct was implemented by Fannie Mae, Freddie Mac and other government agencies as their standard appraisal guidelines.
Many appraisers claimed that the HVCC unfairly favored appraisal management companies owned or affiliated with the country?s biggest lenders. Because of certain provisions of the HVCC, most of the biggest lenders now hire only AMCs, sharply reducing available appraisal work for independent appraisers and other home appraisal firms.
Home appraisers are not the only ones complaining about the unintended effects of the HVCC. Home sellers, buyers, brokers and builders are also expressing their frustration about their lost home sales because of low appraisals. They claim that inexperienced appraisers are unfairly using foreclosure sales and short sales as comparable sales in their appraisal calculations.
Recently, the National Association of Home Builders held a meeting in Washington, D.C. to discuss appraisal problems with American home appraisal firms, realtors, government housing agencies and other housing market participants.
The home builders particularly pointed out their problem of lost sales due to low appraisals. They said that newly-built homes are being unfairly compared to foreclosed houses and old houses with damages and defects.
Meanwhile, several home appraisal companies are implementing their own strategies to mitigate the unintended effects of the HVCC and the lingering effects of the economic downturn by finding ways to cut costs.
One of these is MDA Lending Solutions, which has been providing several types of services to the mortgage market. MDA vice president Greg Dennis said his firm has been using several systems to coordinate its business services with its clients ? investors, originators and servicers.
Instead of criticizing the HVCC, he said that the HVCC has not hindered the appraisal activities of his firm. He even lauded the Federal Housing Administration for releasing its own guidelines related to the implementation of the HVCC.
Additionally, Dennis said that its platforms streamline business processes so that the services needed by lenders, servicers and investors such as American home appraisal are delivered promptly.
