A Fee Makes for a Good Appraisal
San Diego-The philosophy behind the business model of Solidifi, said company executives during an interview at the Mortgage Bankers Association's annual convention here, is that a good appraisal starts with a quality appraiser being paid a full fee.
Company president and CEO Jason Smith noted he comes from an automated valuation model background. He was a co-founder of Basis100. Solidifi is headquartered in Toronto, which entered the U.S. market in 2008. Working with AVMs, Mr. Smith found lenders were looking to get better quality appraisals. He looked at workflow issues and mortgage bankers, but he found the problems started with the appraiser.
AVMs remove the easy-to-value properties from the equation, leaving the more difficult ones. "Half the battle (to improve quality) is putting the right appraiser on the file in the first place." He also noted that 40% of the appraisers in North America will not work for an appraisal management company because of the fee split.
Griff Straw, who recently joined the company as president of Solidifi U.S., said technology can set a company apart. The firm uses metrics that not only look at the appraisal but the appraiser as well. It can even let lenders know if the appraiser uses a "green" automobile to get to his jobs, information that matters to lenders who comply with environmental-friendly mandates. According to Mr. Smith these metrics improve appraisal quality and cost for the borrower. Plus, Solidifi's systems are in compliance with the new Federal Housing Administration Appraiser Independence and Appraiser Engagement regulations. Appraisers working with Solidifi, Mr. Straw said, set their own rates. But given the almost 50% fee split with appraisers that most AMCs have, he wonders how those firms will be able to put out appraisals that comply with the upcoming FHA rules.