Home appraisers are struggling to keep up with a sudden surge in home buying and refinancing. As a result, turnaround times for appraisals are increasing, causing delays in the underwriting process, HousingWire reported this week.
HousingWire said a survey of lenders showed that many are being quoted two to three weeks for an appraisal, which is far longer than usual. In one case, a lender was told it would take 10 days before an appraisal, but it actually came back 27 days later. And in hot markets like Colorado, some say the appraisal process can take up to four weeks, or longer.
“What’s happening is because it’s difficult to become an appraiser,” Phil Treadwell, vice president of development and regional manager for Mason-McDuffie Mortgage, told HousingWire. “And because you have to go through third parties whenever you have a spike in production, those agencies and appraisers get backed up. There’s not a whole lot that can be done - at the end of the day we have a finite number of appraisers.”
The industry is also held up by a limited number of underwriters available to keep up with demand, said Brian Covey, vice president of regional production at LoanDepot.
The problem is that mortgage volumes have surged ever since lockdown restrictions began easing in May. Low mortgage rates have created more demand for appraisers and underwriters than they can handle.
The only good thing is that appraisal waivers are now rising in some markets.
“Property inspection waivers through automated underwriting systems and consumer-friendly online document exchanges have helped to speed up the process and keep employees and families safe along the way,” HousingWire reported.
But some appraisers argue that automated technology is not as transparent as having a human come in to appraise a property.
“What I’ve been encouraging people to do is just be really honest with the customers,” Lori Noble, an appraiser, told HousingWire. “My clients who are honest like that are definitely being successful and it’s not causing any discomfort, just success. People in the industry forget we are selling a home—this is more than a bottom line and, if you are realistic, people will understand that.”