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Appraisal Deliveries May Be a Headache for Lenders

JAN 9, 2014 4:13pm ET
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The qualified mortgage rule contains numerous new requirements and some are going to make it more difficult to deliver a good customer experience.

Under the new rule that kicks in Jan. 10, lenders must disclose the appraised value of the property to the borrower three days prior to closing.

“Fortunately, we are starting out at a time when loan volumes are low,” says Ben Cowen, president of BOKF mortgage group.

This new QM disclosure requirement should not be a problem over the next few months. But in the spring, when loan volumes pick up, it could get hectic, he warned. “That’s when you see the appraisals backup or delivered at the last minute.”

It can take weeks to get an appraisal. And many purchase transactions have a compressed time line of 30 days or less. “Your turnaround time on the appraisal is going to become very important,” Cowen told NMN.

Cowen is in charge of the retail, correspondent and online lending channels at BOK Financial Corp., which is based in Tulsa, Okla.

Comments (4)
This and several other problems could be avoided if the appraisal was on the top of the list of things to do instead of being on the bottom of the list. If the appraisal was ordered/requested by the seller, homeowner, builder, Realtor first, and then with the seller, homeowner, and/or builder getting the result prior to any loan process, a lot of headaches would be avoided. Another huge problem is the appraiser having to come up with a "guidelines value" to be understood as a "market value" by all the "guideline investors" whereas, the average homeowner, who will get a copy, have no clue as to what "guidelines" even are. If both lender/investor and appraisers are to gain the public trust again, the appraisal should be brought to the front and not the tail end of all things real estate! But as history serves us, that would make to much sense and therefore, probably won't happen!
Posted by Steve W | Friday, January 10 2014 at 8:11AM ET
The appraisal requirements don't kick in until January 18, 2014. We have a whole 8 days to bask in the glow of QM, before we jump in on the new appraisal requirements. Happy QM day, everyone!
Posted by Jessica O | Friday, January 10 2014 at 9:10AM ET
As more and more requirements are placed on each component of the mortgage process it will make sense to delegate the task to SME's outside of the company. This will also reduce carry costs to find expense efficieny as well. Enjoy the weekend -- next week will be busy.
Posted by scott w | Friday, January 10 2014 at 9:50AM ET
This is a non-issue. The appraisal requirement has been in place for brokers since 2011, and has never been a problem. If you can't get the appraisal to your client three days before a planned closing, you may want to review your time management skills.
Posted by STEVE M | Friday, January 10 2014 at 2:33PM ET
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