Sandy Adds to Appraiser Procedures
Hurricane Sandy recently highlighted how important it can be to be prepared to quickly handle a wave of re-inspections in the event a disaster strikes and requires the confirmation of previously done appraisals on pending loans.
CoreLogic’s early estimates were that homes valued at roughly $87 billion in total could be at risk of property damage.
Qualified appraisers—either the ones that did the original valuations or ones that had access to a copy of the original appraisal—were active last month because of this. Although they had some offsetting loss in work linked to waning origination activity, they were advising companies to file requests as early as possible in anticipation of increased delays and costs down the line.
Nationwide Property and Appraisal had sent out a notice even before the storm had passed in anticipation of the need and asking lenders to place their orders online “as soon as possible so that appraisers can schedule on their calendar to see these properties.”
It said it had already initially received 500 orders for natural disaster inspections over the weekend just ahead of the storm.
Automation provider a la mode, which typically charges lenders and appraisers who use its web-hosted Mercury Network to order valuations a nominal fee per transaction, let its customers order re-inspections with photos for free through November to help facilitate the process, Mercury Network president Jennifer Miller told Origination News.
Since Oct. 29, Mercury Network—which provides connections to approximately 3,300 appraisers who live and work in the affected areas and qualified to provide the re-inspections—had lenders and appraisal management companies place orders for inspection report on over 2,000 properties in Sandy-affected regions.
The storm had a “profound impact on transactions” in the areas affected and was “pretty devastating” for originating branches in those regions, said Daniel Jacobs, president of retail branching at Residential Finance Corp. However, most properties seemed to be salvageable to some degree and few were truly decimated, he said.
Jacobs, who said he was not in an area affected by the storm but has had to contend with other natural disasters during the course of his branch management career, said his initial response to such events is to “first make sure people are safe, then deal with the business issues.”
Once power is down, it becomes very difficult to do business, but because lenders and service providers are so heavily reliant on automation these days, many companies do have some redundant systems in place to mitigate the risk. Residential Finance Corp., a la mode’s Mercury Network and Nationwide Property and Appraisal all indicated that they do.
Jacobs said his company, which is licensed in 38 states, also was able to reduce the delays caused by the need for re-inspections by transferring loan files to call center originators with appropriate licenses while other originators were temporarily cut off from their work due to storm damage.
He added that the company also was being lenient with rate lock extensions to so that there would be “as little negative impact as possible” on volumes.