Platinum Data Solutions reports that 39% of the appraisals reviewed in the third quarter using its RealView appraisal quality technology contained property quality or condition ratings that conflicted with previous ratings on the same property.
Such inconsistencies are a primary cause of underwriting delays, the firm notes. They can result from a number of factors, such as human error, appraiser subjectivity, actual changes in the property's condition or quality, or even possible fraud.
Platinum Data arrives at its findings by analyzing its massive database of appraisals.
The firm points out that conflicting property condition and quality ratings in appraisal reports can cause closing delays of one to several days. This can cause undue risk for mortgage lenders, specifically with regard to rate locks and deadline-oriented regulations.
‘More than one in three appraisals contain inconsistencies in property ratings,’ says Phil Huff, president and CEO of Platinum Data Solutions, in a release. ‘Causes aren't easy to determine, so they need to be investigated. Doing this after Uniform Collateral Data Portal (UCDP) submission opens lenders up to numerous issues. Costly delays are just one of them.’
Fannie Mae's new Collateral Underwriter (CU) appraisal scoring software identifies inconsistencies in loans submitted through the UCDP by comparing the appraisal's data with its own proprietary data and flags the appraisal for comments or corrections.
However, appraisers aren't privy to CU's data – only lenders and appraisal management companies have access to the findings – so appraisers are basically in the dark with respect to whether a particular report will be flagged for errors.
Platinum Data's RealView helps solve this problem in that it checks reports for possible inconsistencies, using a similar methodology, before they are uploaded into the UCDP.