United Wholesale Mortgage has said it’s rolling out a new program that allows lenders to work directly with appraisers, instead of using an independent appraisal management company.
The new program is called Appraisal Direct and will roll out on October 1 nationwide. Under the program, it will oversee the entire appraisal process, from scheduling the appraisal to execution and delivery.
UWM works solely through wholesale channels, which means that it employs numerous brokers who help to connect clients to home loans. The company hit the headlines last month when it announced it will start accepting bitcoin for mortgage repayments.
Today’s news is equally game changing, as the lenders it works with will now be able to use Appraisal Direct or order an appraisal the old fashioned way, through a third party appraisal management firm.
During a Facebook Live address, Ishbia proclaimed that while AMCs add value to the industry, appraisals have been a stumbling block for the mortgage industry.
“It’s going to be cheaper for consumers and more money for appraisers, because there’s no longer going to be a middleman with UWM Appraisal Direct,” Ishbia said.
Appraisers say AMCs cut into their pay and introduce inefficiency into the appraisal process. AMCs came into prominence as a result of post-recession reforms, which sought to place a regulatory firewall between mortgage brokers and appraisers.
UWM said it will hire around 100 people to work on the new program, with appraisers selected based on a scorecard that reflects their knowledge of a geographic areas and their past performance.
The appraisal industry has grappled with concerns over a shortage of qualified appraisers in recent years. With the housing market booming, some lenders have complained of delays in having appraisals returned promptly.
Not everyone agrees that UWM’s program will help to solve the appraisal shortage. Kimber White, president of the National Association of Mortgage Brokers, told National Mortgage News the Appraisal Direct program may work for UWM presently, but said it would be better if it would work with the industry to find a solution for everyone.
“Is this really the way we want to go and allow all wholesalers to enter the appraisal business?,” White asked.