The lending process’ evolution – not to mention the fast approaching TRID deadline – has caused many roles and the responsibility for mortgage professionals to adjust. While appraisers are certainly not immune to the effects of today’s era of regulation, there has been a realization over the past few months that many are not fully aware or clearly understand just how this new wave of legislation will impact them.
TRID’s delayed deadline brought a considerable amount of relief to lenders and the industry overall; however, among lenders, there remains a lack of consistency in handling the new appraisal requirements. While the majority of the industry’s focus has been on the changes lenders must undergo as a result of TRID’s implementation, and their deadlines for doing so, the changing expectations and responsibilities for appraisers have been less frequently discussed. In communications with appraisers, at both industry events or in the field, it has been alarming to learn that many do not understand the magnitude this major guidance has and how it will affect their positions moving forward. With some appraisers believing it will have no impact on their day-to-day activities, the importance of a well informed, qualified and trained appraisal panel will play a significant role in the success or failure of new, mandated processes once TRID is in full effect.
At USRES, we feel strongly that the responsibility falls on the lender or its designated appraisal management company (AMC) to properly educate their appraiser panels on TRID – what the regulation entails and how it will alter their roles. Since the appraisal fee now falls within the new loan estimate and has been included as a zero tolerance item, there is no longer room for adjustments in the fee once the estimate is delivered to a borrower. This is a critical change for appraisers. Under new guidelines, post inspection upcharges once considered standard for more costly situations, such as rural or complex assignments, have been ruled out. This will pose challenges for an appraiser who accepts an assignment for an agreed upon fee, only to later realize that the property is much more rural or complex than original anticipated. In these scenarios, modifying the fee will not be possible without a valid (and extremely noteworthy) change in circumstance. In addition to the fee, a more rural property or a more intricate assignment requires more of an appraiser’s time – and as is well believed, turn times will be of the essence once TRID is in place. It is critical for every appraiser to be aware of these elements; they must be able to make considerations and accommodate for the changes when taking assignments.
With the sheer number of new rules and the speed at which regulatory changes occur, it has been nearly impossible for most mortgage professionals to truly become experts on TRID. And, no one is quite certain what the future holds once the rules are enacted. However, it is important for lenders and their AMC partners to continue researching, attending educational seminars and staying on top of the regulation’s evolution, both now and after the implementation deadline and to consider it their responsibility to share as much as possible with their appraiser panels. At the end of the day, the real estate process depends on accurate appraisals, and lenders rely heavily on the knowledge, expertise and ultimate success of appraisers. In this time of change, lenders that ensure they become strong resources and partners to appraisers will experience better outcomes and a smoother transition once TRID is in place.
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