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Blog post by Reggora

In today’s mortgage market, there are few things more important than high borrower satisfaction scores. One of the biggest factors in achieving this is time to close, especially for purchase money mortgage loans.

 

Because the appraisal takes longer than anything else the lender does to originate a new loan, speeding up that process will improve borrower satisfaction, and increase referral business.

 

From an increase in top-line revenue to massive cost-savings, here are the six reasons lenders should optimize the appraisal process now.

1. Reduced cost per loan

The number one benefit of an optimized appraisal process is a reduction in the cost to originate for lenders. Results of a recent Reggora and STRATMOR study on lenders’ appraisal operations showed that many lenders were leaving money on the table with each loan processed.

 

Using the data from STRATMOR as a benchmark and comparing it with the successes of Reggora customers found that lenders could reduce costs by up to $258 per loan file. By eliminating revenue leakage from appraisal fees, reducing your cost of capital, and reducing the staff needed to manage orders and handle accounting, lenders can increase margins without making a significant investment. Such was the case for Alpha Mortgage, a lender that reduced its cost per loan by $70 per loan file.

 

Image of Reggora white paper "Why Mortgage Lenders Should Optimize The Appraisal Process Now"

2. Increased borrower satisfaction

Satisfied borrowers give higher NPS scores and also refer more of their friends and family to the lender. Satisfied home buyers make for happy real estate agents. They can also refer more business to the lender, especially in a purchase money market.

 

And it’s not just the borrower who benefits from a smoother process. Agents have more confidence that the lender can hit their closing dates, the lender’s appraisal department staff benefits from more effective communications and time savings, and the lender’s CFO benefits from a more cost-effective process.

 

When it comes to appraisal innovation, satisfaction is available to all, such was the case for Assurance Financial, a lender that increased its appraisal-related borrower NPS.

3. Time savings

Lenders know that every day the loan is in process costs them money. But a streamlined appraisal process saves time. That’s why lenders we spoke to recently, like PRMG and another well-known regional bank, are focusing their efforts on updating the technology in this department. One key benefit they are enjoying is a faster process.

 

Another good example is North Easton Savings Bank, where Vice President – Director of Sales Jim Dell’Anno saw a “gaping hole” in his appraisal department with turn times approaching 30 days. His solution was automated payment processing via Reggora technology and a single source of truth within the software. The bank implemented Reggora’s platform and saw a 35% improvement within weeks.

 

Infographic of how lenders spend too much time managing appraisals from a 2022 STRATMOR study, featured in the white paper "Why Mortgage Lenders Should Optimize The Appraisal Process Now"

4. Better revenue management

The regional bank we spoke to estimated that in 2019, it lost $75,000 to uncollected appraisal fees on transactions for applicants who would ultimately choose another lender. When volume spiked 60% in 2020, revenue leakage rose to an estimated $125,000.

 

Streamlined revenue collection, remittance capabilities, bidirectional integration with LOS, and ease of use that came with Reggora all helped show immediate improvement. Ultimately, the leakage stopped.

5. Increased management visibility and control

Larger institutions that operate large wholesale or branch networks often find that decentralizing the appraisal function can lead to problems. But pulling it all in-house isn’t possible with a manual process. Reggora has been the answer for many firms, including PRMG.

6. Better staff management

As a result of replacing outdated manual processes with automation that comes with a new appraisal innovation platform, lenders can free up staff to move away from the appraisal desk to higher impact roles. Alpha Mortgage is a great example here.

 

Achieving all of these benefits requires an integrated solution that can seamlessly connect directly into the lender’s LOS. That’s what Reggora’s solution provides, especially for lenders who use Encompass.

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