Banks are squeezed now more than ever by the increased costs of compliance on one side, and the need to process new business in a competitive environment on the other. The problem is further compounded by the fact that not only must new projects be properly vetted, so too must existing loan portfolios.
The end result is an industry that has to choose between profitability and compliance.
Or does it?
More and more frequently, banks are turning to outside firms to manage a key component of compliance related to real estate transactions – the appraisal process. Rather than find, hire, and train new employees to ensure compliance, banks can partner with a third-party company and pass the incremental cost on to their customers.
As a result, your bank immediately acquires the manpower and expertise of a fully-staffed appraisal department without incurring the exorbitant up-front and ongoing costs of staffing and managing it themselves.
So how does it work? Well, we won’t give away all of our secrets, but here are the basics of how we do it for our clients:
- You submit a request for an appraisal through our online portal.
- We bid out the appraisal request using the bank’s approved appraiser list.
- We present you with the bids, and you select the appraiser.
- We engage the appraiser on your behalf.
- We monitor the appraiser throughout the process, providing you with automated email updates.
- When completed, we review and certify the appraisal for 100% compliance.
- If an appraisal requires corrections, we notify the appraiser (in writing) and insure the corrections are made.
- We store all documents online and make them available to you for five years.
The fee charged is a function of the size and complexity of the appraisal, and in the vast majority of cases is passed along to the borrower by the bank as part of the appraisal fee.
Given all of the above, it seems obvious to us why a bank would outsource its appraisal process. But just in case, here is a recap:
In as little as one day, a bank can have a 100% compliant appraisal system without having to spend a dime of its own money.
That means the bank can focus on finding new business while being comfortable in the knowledge that they are in full compliance with appraisal requirements. The result is an efficient, cost-effective real estate lending unit – and happy regulators.