Last week readers of LendingLife got a first look at the Veros, Valligent partnership promising to cut mortgage lending cost.
In that article, it's written that a big part of that cost savings would be taking the legwork out of valuations.
More importantly, the news set off some responses from LendingLife readers, not just on the partnership, but on the state of the valuations industry as a whole.
One reader replied to me about the Veros announcement, calling it a genius marketing move.
A genius move? Why?
The reader explained that, as the number of appraisers keeps shrinking (but just don't call it an appraiser shortage) and the Appraisal Institute “scrambles to find solutions,” more individual appraisers will continue to move on and others will possibly retire.
This is leaving a skills gap that is not being replenished.
“Millennials don’t graduate college and say: Hey! I want to be an appraiser! As a result, lenders are increasingly doing everything they can to avoid a full appraisal, if and when possible. Quality, experienced, knowledgeable appraisers are sometimes really tough to find, depending on geographic area. AVMs and various other sophisticated data analytics are a good alternative, especially as they continue to advance in accuracy and depth of valuation analysis. Some say that all but only a handful of AMCs will remain in a few years.”
Later, the reader added:
“It's a bit sad how the individual appraiser has had their profits pinched with so many tough rules and regulations over the years, not to mention if the lender uses an AMC, the appraiser gets cut even further.
We shall see how this thing goes over the next couple of years. A complete appraisal is a pretty freakin' important part of buying a property!”
Thoughts on this LendingLife reader's comments? Either write below or reply and send me an email. I will post any further, salient points in an upcoming LendingLife email. To sign up for LendingLife, out every Tuesday and Thursday, click here.