Expert AnalysisMay/June 2023 Issue

Why Mortgage Lenders Should Consider Alternative Valuation Products

Staying ahead of the curve is crucial in the ever-evolving mortgage industry landscape. As lenders strive to streamline processes, reduce costs, and improve efficiency, alternative valuation products have emerged as a game-changer. Offering lower costs, faster turnaround times, and increased flexibility, these products present an enticing opportunity for mortgage lenders to revolutionize their operations. In this article, we will explore the benefits and advantages of alternative valuation products, highlighting why lenders should consider integrating them into their appraisal and evaluation processes.

One of the key advantages of alternative valuation products is their cost-effectiveness. Traditional appraisals can be time-consuming and expensive, especially for low-risk transactions like home equity and portfolio management. However, alternative valuation products, such as the Merge AVM Reconciliation offered by Nationwide Property & Appraisal Services, provide a solution that is both efficient and cost-effective. Lenders can save time and money while ensuring accurate property valuations with no upfront costs and pre-built, benchmark-tested AVM Cascades.

Moreover, alternative valuation products offer a faster turnaround time, enabling lenders to expedite their operations and meet tight deadlines. The Merge AVM Reconciliation, designed to meet the requirements of an Evaluation under the Interagency Guidelines for Appraisals and Evaluations, leverages pre-tested AVM Cascades and the Foundation PDR (Property Data Report). Lenders can achieve quicker results by utilizing these tools without compromising accuracy or compliance.

Another significant benefit of alternative valuation products is their ability to reduce bias and increase independence in the valuation process. Traditional appraisals involve face-to-face interactions between homeowners and appraisers, which can introduce potential biases and subjectivity. In contrast, alternative valuation products, such as the bifurcated workflow offered by Nationwide Property & Appraisal Services, ensure that the homeowner and appraiser never meet. This separation helps maintain objectivity and integrity in the valuation process, resulting in more reliable and unbiased property assessments.

Efficiency is critical to modern mortgage lending, and alternative valuation products offer a streamlined approach that saves time and resources. Traditional appraisal forms, such as the 2055 or 1004, can be time-consuming to complete. In contrast, alternative valuation products offer abbreviated forms that are more efficient and tailored to specific needs.

Furthermore, alternative valuation products provide a range of data collection options to suit different scenarios. These options include exterior-only assessments, exterior and interior evaluations, and even floorplan measurements captured using state-of-the-art scanning technology. By leveraging these alternatives, lenders can choose the most suitable approach based on their specific requirements, optimizing the valuation process for maximum efficiency and accuracy.

When considering alternative valuation products, it’s essential to highlight the value of the Pinnacle Desktop Appraisal offered by Nationwide Property & Appraisal Services. Meeting the standards set by the Uniform Standards of Professional Appraisal Practice (USPAP), the Pinnacle Desktop Appraisal is a robust alternative to traditional appraisals. Leveraging the same Foundation Property Data Report used in the Merge AVM Reconciliation, this appraisal offers a seamless upgrade path from an AVM to a desktop appraisal. Using a trained panel of Professional Data Collectors, lenders can ensure that accurate property data is collected for a comprehensive desktop report.

Additionally, the ACE+ PDR and Value Acceptance + Property Data programs, endorsed by Freddie Mac and Fannie Mae, provide appraisal waiver offerings that further emphasize the potential of alternative valuation products. Nationwide Property & Appraisal Services has partnered with CAPTURE Data Services, a vetted technology partner of Freddie Mac and Fannie Mae, to leverage cutting-edge technology and efficiently gather property data.