Brian Zitin and Jonathan Corr on the future of appraisals
Today’s HousingWire Daily features a roundtable discussion on whether appraisals are the next big opportunity in mortgage fulfillment.
During this conversation, Brian Zitin, the Co-Founder and CEO of Reggora, and Jonathan Corr, the former President and CEO of Ellie Mae, also discuss how appraisals are evolving and why lenders should be thinking about valuation right now.
Here’s a short preview of the discussion, lightly edited for concision and clarity:
Diego Sanchez: Recently, Sandra Thompson the interim director of the FHFA announced that desktop appraisals will become a permanent part of the appraisal process, at least for the loans the GSEs examine. Does this potentially mean we don’t necessarily need to send somebody out in the future, or do you think there will always be a place for in person appraisals?
Brian Zitin: I believe the way to think about alternative types of products like desktops or anything else is on the spectrum of risk. If we have a big pie of different types of loans they behave differently. For example, a Texas ranch with very similar identical homogenous comparables like a good loan to value ratio for the borrower and good credit, the risk of the collateral piece affecting the larger loan is much less. On those types of loans, we could do an appraisal waiver or desktop, which don’t need as stringent as an underwriting process, but on some other big percentage of orders where it’s not as easy and straightforward, you probably are still going to need that higher level expert to come in and make sure you know the value is as accurate as possible. So, will it chip away at the pie of orders that require a full appraisal? For sure. However, will it have a much larger impact beyond that? We don’t know yet. I think that’s going to be up to the FHFA, the GSEs, the risk models, and all of the numbers they’re seeing and how they want to manage risk. I think that’ll ultimately determine the frequency with which these alternative products end up being used.
HousingWire Daily examines the most compelling articles reported across HW Media. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsrooms that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Elissa Branch.