1. THE M REPORT | 23
FEATURE
Mounting
Challenges for
Today’s Appraisers
There are good reasons to be
optimistic about the hous-
ing industry’s future. First-time
homeownership is on the rise,
bolstered by low rates and an im-
proving economy. The origination
landscape has become increasingly
diverse, which is good news for
consumers. Independent mortgage
bankers in particular are growing
in strength by placing a strong
focus on speed, quality, and cus-
tomer service.
Of course, an improving pur-
chase market is generally good
news for appraisers, too. However,
the appraisers of 2016 face a busi-
ness climate that is much more
demanding than the last time the
market was this healthy. Three
key issues in particular are hav-
ing a direct impact on valuation
professionals and how they do
business. Yet they also represent
opportunities for both appraisers
and the industry as a whole to do
better, and to help restore public
trust in the appraisal process.
Tighter Margins
The majority of appraisers are
committed to providing the
best service they can. However,
the increasing demands placed
on them, such as requests for
additional client-specific scope
of work, has substantially added
to their workload and decreased
productivity.
No doubt today’s mortgage
lenders are under extraordinary
pressure to comply with mul-
tiple regulatory requirements
and shifting investor guidelines.
Yet the increasing level of client
requirements far exceeds normal
expectations. Many credit and
risk professionals are interpret-
ing recent mandates that apply
to valuations very narrowly. The
result has led to extra work for
appraisers, which inevitably cre-
ates greater expense. And even
though the average cost of a
residential appraisal is climbing, it
has not been rising commensurate
with the level of detail expected
of appraisers. Many appraisers
earn less today after factoring in
the additional time, effort, and ex-
pense it takes to meet the unique
needs of their clients.
For example, a growing num-
ber of lenders require certified
appraisers not only to oversee
the work of licensed apprais-
ers and sign their reports, but
also to view subject properties
personally. The vast majority of
appraisers work independently
or in small groups in order to
share expenses. As such, it’s not
economically feasible for them to
send two appraisers out to view
the same property.
Another example involves
FHA purchase loans. Appraisers
on FHA mortgages are required
to not only determine a home’s
value, but also assess its overall
condition, such as the home’s
electrical and plumbing systems.
TheValuation
Conundrum
As Big Data and new technologies change the face of the
housing industry, appraisers are working hard to adapt to greater
demands and shorter timelines.
By William Fall
W
hile appraisers were once a revered source of information in the housing industry,
a changing industry alongside Big Data and an influx of new technology, have
drastically changed the appraiser’s world. No longer the keeper of covert information,
some even say the appraiser today is at an informational disadvantage compared with his
counterparts. At the same time, appraisers face increasing pressure to complete valuations with
increased detail and accuracy all the while doing so in the shortest time possible.
The solutions to the vast challenges appraisers face today seem to
lie in technology. Appraisers are crying out for technology that pro-
vides them greater access to information, streamlines their workflow,
helps them keep an eye on compliance, and importantly that has the
ability to change as the industry continues to transform.
In this comprehensive valuation update, take a closer look at the chal-
lenges facing the appraisal profession and the resilience of a few seasoned
appraisal experts who have a vision for the future of the profession.
* * * * * * * * * * * *

2. 24 | THE M REPORT
FEATURE
This essentially makes the ap-
praiser a de facto home inspec-
tor. HUD Handbook 4150.2 has
a checklist of health and safety
issues that the appraiser must
check, but these are often open
to interpretation, leading to un-
certainty among appraisers. Are
they supposed to run the dish-
washer? How long should they
leave the oven on? All of this
adds time as well as ambiguity
to the appraisal process.
Turn-Time Pressure
Lenders want the safest loan
they can obtain to mitigate
buyback risk and reduce the
potential for noncompliance.
Today’s appraiser is expected to
do more than ever. As a result,
many appraisers try to default
to a “safest route possible” when
it comes to complicated apprais-
als. Appraisers invest more time
upfront to avoid possible correc-
tion requests or re-inspections
of the subject property.
While accuracy is essential,
appraisers are also pressured to
work quickly. It is extremely
common for lenders to use
the promise of fast closings as
a competitive differentiator,
especially in a surging purchase
market like we have today.
However, the appraisal is often
the factor can make or break a
lender’s claims. This creates a
double-edged sword for apprais-
ers. On the one hand, the scope
of the appraiser’s work is increas-
ing. On the other hand, there is
pressure to close quickly.
This double-edge sword is
sharpest when issues surface
during the appraisal process. For
example, an appraiser may find
several health and safety items
in need of repair, per HUD’s
guidelines, or concessions may
become an influence to the
final value estimate. Such issues
become even more complicated if
there are additional costs to the
buyer. All the while, there is a
lot of pressure on appraisers to
get the work done quickly, and
obviously to get it done right,
even though “getting it right” in
such circumstances is sometimes
in the eye of the beholder.
Who Will Carry
the Torch?
In recent years, there has
been a great deal of discus-
sion about whether the housing
industry is facing an appraiser
shortage. I don’t think there
is much of a debate. In fact,
the loss of appraisers through
attrition is already exceed-
ing the number of incoming
candidates. While it’s true that
many markets seem to have an
adequate number of appraisers
to meet current demand, some
markets are clearly stressed.
Colorado, for instance, has seen
little change in the number of
appraiser licenses, and lenders in
this state are frequently expe-
riencing four-week delays in
appraisal report deliveries.
There are a number of reasons
we have an appraiser shortage.
Certainly the previous two is-
sues I’ve discussed play a role.
But perhaps the biggest culprit
is the oppressive barriers to an
appraisal career. The current sys-
tem is no longer generating the
quantity and quality of apprais-
ers that the housing industry
needs. Currently, licensed
appraisers need to complete
a certain number of hours of
coursework and on-the-job work
experience with a certified ap-
praiser. However, as mentioned
earlier, many appraisers work
independently. Why take on a
trainee today who may likely
become a competitor tomorrow?
The solution is not to lower
training standards, which would
only make matters worse and
erode confidence in the profes-
sion. But there should be more
than one way to become an
appraiser. There should also be
licensing standards that are based
not just on the number of class-
room hours, but on actual com-
petency. Attorneys, for example,
must demonstrate competency
before practicing in certain courts
of law. It makes sense for apprais-
ers to meet similar standards.
For example, an alternative path
to becoming a licensed appraiser
could include a smaller set of
coursework than is currently re-
quired, but require the completion
of at least 25 property inspections
within a 60-day period under the
oversight of a certified appraiser.
Under such a system, a candidate
could become a licensed appraiser
within a six- to nine-month period.
To advance to the level of certified
appraiser, the requirements could
remain similar to what currently
exists but should also follow a
competency-based system demon-
strated by work samples.
An appraiser shortage will only
exacerbate the issues appraisers
currently face. If our industry
cannot find a way to recruit,
train, and develop the next gen-
eration of appraisers, we may all
find ourselves overly dependent
on non-appraiser models, which
could have far-reaching impacts
and damage consumer trust.
Again, these are big chal-
lenges for appraisers, but within
every challenge lies opportunity.
Many appraisers, for example,
are taking a much closer look at
their business practices and the
companies they choose to partner
with. By choosing to work more
frequently with appraisal manage-
ment providers that clearly outline
client expectations and are more
realistic on turn time demands,
appraisers are able to work more
productively and efficiently.
A capable appraisal manage-
ment provider can also help
appraisers enhance and ensure
the quality of reports. Quality
is always the key ingredient in
providing an accurate report,
and clients are demanding it
in order to avoid re-purchase
demands and other post-closing
issues. There is also a growing
number of technology solutions
that can help appraisers man-
age appraisal orders and report
deliveries while checking for
quality and compliance. The
bottom line is that lenders want
a smooth origination process,
so when appraisers need help
with their issues, a quality ap-
praisal management provider can
remove friction from the process
for both parties.
As we consider the issues
affecting today’s appraisers, we
should remember that poorly
valued real estate decisions were
a major factor behind the failures
of hundreds of banks between
the years 2008 and 2014. Our
industry will remain suscep-
tible to future disasters unless
The current system is
no longer generating
the quantity and
quality of appraisers
that the housing
industry needs.

3. 26 | THE M REPORT
FEATURE
we are aware of the challenges
appraisers face and work toward
preserving a well-trained, com-
petent workforce of professional
appraisers in the years ahead.
WILLIAM FALL, MAI, SRA,
ASA is Founder and CEO of William
Fall Group and its AMC subsidiary,
Valuation Partners. A General Certified
Appraiser credentialed in five states, Fall
has taught real estate valuation courses
at the university level and has served as
a supervisory appraiser for numerous
apprentice/trainees. He can be reached
at wfall@valuationpartners.com.
* * *
Yearning for Big
Data and Big Tech
How important is it to have
the right tools for a job?
For example, imagine you are
in the process of renovating a
bathroom, when you realize the
wrenches and pliers you have
in your tool belt are plastic toys
from your kid’s playset. Will
that hamper your ability to
complete the work necessary in
order to realize the bathroom
renovation you had in mind?
What if you were to find
yourself in a situation that
required an ice axe in order
for you to summit a peak, but
instead of finding your trusty
Grivel Air Tech Evo strapped to
your pack, you find a small hob-
by hammer that would only be
useful if you were endeavoring
to complete an arts and crafts
project. How successful is your
summit attempt likely to be?
The same logic can be ap-
plied to the residential ap-
praisal profession. Is it possible
to meet the needs of today’s
lenders and AMCs with the
tools currently available to the
residential appraiser community?
Unfortunately, until appraisers
are provided more advanced
tech- and data-centric appraisal
production tools—the kinds of
offerings that have previously
been reserved for investors, lend-
ers, and AMCs—the answer is a
resounding, “NO.”
The Shifting
Information
Advantage
Residential appraisers work-
ing in the mortgage lend-
ing space are woefully unde-
requipped to meet the needs of
the client base they serve. In
years past, before the advent of
“Big Data,” lenders and origina-
tors heavily relied on appraisers
to inform them on what was
occurring in a subject property’s
market. An appraiser would
source comparable sales from
MLS books obtained from the
local Realtors’ office, or from his
or her own business’ database
of previous assignments. In
later years, the appraiser would
obtain public records data from
CDs (remember those things?)
purchased monthly from early
versions of data aggregators.
They would also pull MLS
records from DOS-based sys-
tems, which at the time was a
significant improvement over
the MLS books that had been
previously used. More recently,
the appraiser would leverage his
or her local Web-based MLS
system, public records, and per-
mitting databases to perform his
or her job function. In all of the
aforementioned scenarios, the
appraiser was the conduit by
which market data was obtained
and disseminated to clients, but
times have decidedly changed.
Advancements in technology
revolving around data offer-
ings made it much easier for
an appraiser to come by the
information needed for them to
complete an assignment, but the
digitization of this data opened
up the floodgates for analytics
companies that envisioned taking
this newly-found content and
productizing it in a way that
would allow them to sell their
offerings directly to the lender
or AMC. Today, the appraiser’s
client has access to the same re-
sources that had previously been
reserved for appraisers. Instead
of relying on the appraiser to
paint a picture of the market in
the form of his or her delivered
appraisal report, the appraiser’s
client relies on third-party data
and analytics to refute or qualify
the appraiser’s findings. The
informational advantage has
officially trended away from the
appraiser and now leans heavily
in the direction of the users of
appraisal products and services.
An Inundation of
Revision Requests
For appraisers who have been
performing field work since
the last millennia, the changes
that have transpired are palpa-
ble. Today, the way an appraiser
completes an assignment and
assigns a value opinion remains
relatively unchanged, but the
requirements and complexity of
current appraisal requests de-
mands greater utilization of data
and analytics in order to reduce
the percentage of addendum
and revision requests emanating
from AMCs and lenders.
In decades past, it was un-
common for an underwriter to
question an appraiser’s findings.
When it did happen, it was typi-
cally tied to assignments where
the nature of the subject prop-
erty, or the market in which it
was located, increased the overall
complexity of the assignment. In
this case, the appraiser wouldn’t
be caught off guard if/when a
client made a request for clarifi-
cation or additional information.
Now, if an appraiser submits
a completed report on even the
most rudimentary assignment,
and he or she doesn’t receive an
addendum or revision request,
it’s considered an outlier. How
can that be? Isn’t the appraiser
acting as a trusted advisor on
behalf of the client that en-
gaged them on the assignment?
Doesn’t the client implicitly trust
the opinion of the appraiser? If
they did, would the AMC or
lender continually bombard
the appraiser with questions or
concerns on the vast majority of
appraisals? The reality is, most
AMCs and lenders have greater
insights into the market—includ-
ing visibility into all relevant
data—than even the most sophis-
ticated residential appraisers.
Recapturing
the Information
Advantage
If we as a profession want to
recapture the informational
advantage that’s been lost in
recent years, we must have tools
that are at least commensurate, if
not superior, to those being used
by the AMCs and lenders we are
working for. Until the organiza-
tions that provide appraisers with
production software are able to
deliver applications that mirror
the analytics suites being used at
a transactional level by an origina-
tor, the appraiser will continually
suffer through the kind of back-
and-forth with their clients that
have become standard operating
procedure for the typical service
provider.
Improving upon the technol-
ogy currently being employed
by most appraisers will not only
prove to minimize the time an
appraiser spends on an assign-
ment throughout production
and post initial delivery, but it
will also increase the AMCs’/
lenders’ reliance on the appraisal
report itself. This alone has the
potential to improve the transac-
tional economics associated with
residential appraisal practice.
An End to Fee
Stagnation
During a recent industry con-
ference, there was consider-
able focus placed on the fees
being paid for a typical appraisal
by the majority of appraisers in
attendance. Most commented
that the fees haven’t increased in
a meaningful way in more than
By Jordan Petkovski

4. 28 | THE M REPORT
FEATURE
a decade. Some felt the reason
their fees hadn’t improved was
a result of AMC proliferation
post Dodd-Frank. Few, if any,
placed the responsibility for fee
stagnation on the dilution of
the appraiser’s value proposition
that had historically been made
to the mortgage lending process.
This is unequivocally the most
underrated contributing factor.
As an example, imagine a
world where the appraiser could
read the mind of the AMC
reviewer or the lenders’ collateral
underwriter, thus allowing the
appraiser to respond proactively
to questions that would oth-
erwise have been asked after
submitting the completed report.
In this case, would the AMC
or lender still need to stack the
same number of resources up
against the review or underwrite
function? Would they be able to
reduce the capital expenditure
on these roles? Would that freed-
up capital now find its way into
the appraiser’s pocket? Though
no one can say definitively what
will transpire in this type of
future state, it seems far more
plausible than if we were to
continue with the status quo.
By giving appraisers the means
to see the completed report
in the same manner as those
responsible for reviewing their
output, you could reduce, if not
eliminate, the tête-à-tête between
appraiser, reviewer, and under-
writer that continues to plague
the process. By improving upon
the resources available to ap-
praisers and the technology they
have at their disposal, you may
even get more youthful interest
in the profession.
The fact is, until AMCs and
lenders feel confident that they
no longer need to scrutinize the
opinions of the appraisers they’re
engaging as a means to miti-
gate their exposure to collateral
risk, the fee being paid to the
originating appraiser isn’t going
to realize the kind of vertical
elasticity that’s needed to satiate
the residential appraiser.
To the tech firms that oper-
ate in the appraisal production
arena: Let’s give appraisers the
proverbial ice axe they’ll need
to summit the peak we call ap-
praisal fees.
JORDAN PETKOVSKI is VP and
Chief Appraiser at TSI Appraisal. He
has worked in senior leadership posi-
tions within the residential appraisal
industry for more than 15 years. He’s
held numerous roles for appraisal and
settlement services providers, includ-
ing operational and policy-centric
positions. He is the current Chairman
of the Five Star Institute’s National
Appraisal Congress.
* * *
The Top Ten “S”s
Needed in Appraisal
TechnologySolutions
In today’s rapidly changing en-
vironment, there is an impera-
tive focus on the quality and
accuracy of collateral valuations.
Lenders, AMCs, and appraisers
face greater accountability at all
levels, yet find themselves reli-
ant on the antiquated tools and
resources of yesteryear. At the
same time, a complete paradigm
shift in how a valuation is de-
veloped is upon us.
We truly need a revolution
in our industry’s technology.
Technology that delivers a data-
centric approach will help valua-
tion professionals better aggregate
information, analyze markets and
value, increase quality, reduce
errors and turn-times, and bring
context and clarity back to valua-
tions and the valuation process.
In light of these evolving needs,
it’s time for a well-considered
reassessment of how valuation
software can better serve us.
Recent developments in technology
offerings pave the way for 2016 to
be a year of innovation—even for
an industry that has “always done
it this way.”
The following top-10 checklist of
“s” words shows the bar valua-
tion technology should meet to be
defined as true solutions.
If your provider’s valuation
platform doesn’t fall in line with
this checklist, then maybe it’s time
to re-evaluate.
• Standards: First and foremost,
does the provider’s platform
meet the wide array of compli-
ance and regulatory standards?
Does it ensure adherence to
policies, rules, and regulations?
If you can’t be confident that
your valuations are compliant,
what is your platform doing
for you? A high-value platform
integrates robust validation
of regulations, client-specific
rules, and data standards, from
UAD and USPAP to MISMO
and inter-agency compliance,
for appraisers and reviewers. It
incorporates these needs into
the system design, eliminating
time-consuming and error-prone
back-and-forth between instruc-
tion lists and review cycles.
What’s more, a platform should
be able to flex as organizations
update these requirements and
grow with emergent standards.
• Solutions: Does your provider
have to use multiple software
platforms to complete the
life cycle of a valuation? The
needs of the modern valuation
industry have surpassed simple
form-filling portals; modern
valuations call for modern
solutions. Does your platform
manage service coordination,
order management, panel man-
agement, client relations, and
user management; or is there
a bevy of unrelated software
to manage? A full suite of
flexible solutions can improve
overall quality and efficiency
and reduce the time, costs, and
frustration of integration pains.
• Service: Your technology should
integrate client relations with
top-notch customer service
tools. From online customer
access and order transparency,
to constant communication
and follow-through, your
solution should inform custom-
ers and make them a priority
throughout the process. Look
for solutions that provide order
visibility, customizable notifica-
tions, integrated communication
tools, full order histories, and
clear resolution paths.
• Specialization: Are you a
lender, originator, investor,
buyer, or seller? Whether you
work with AVMs, BPOs, evalu-
ations, or 1004 appraisals, your
provider needs the experience
and capability to meet your
specific needs. Engaging the
right provider with the right
technology is critical to have
a successful and profitable
alliance. Who developed their
platform? Do they originate
from within the valuation in-
dustry, or are they an arm of a
general software conglomerate?
The right provider is one that
understands your business and
develops software that directly
addresses the challenges inher-
ent in your industry.
• Support: You might run a small
valuation shop with limited re-
sources or a large organization
with in-house training and IT.
Depending on your business
and the roles of your learners,
you’ll need access to responsive
technical support and training
options that meet your needs.
Look for providers that offer a
variety of support and train-
ing to fit your needs, such as
instant chat help, live tech-sup-
port, video library of tutorials,
and instructor-led training.
• Security: In this industry, we
work with personal information
and sensitive data. Make sure
your provider’s technology has
policies, processes, and auditing
methodologies that keep data
secure, according to standards
such as the Sarbanes-Oxley Act,
the Gramm-Leach-Bliley Act,
and practices compliant with
ISO 27001. For companies with
the strictest security, such as
lenders, providers should be able
By Jordan Wilde

5. THE M REPORT | 29
FEATURE
to host solutions in a secure, lo-
cal environment. And although
cloud-based technology may not
seem like an obvious choice,
secure data partitioning keeps
your data separate and safe from
others and can be less expensive
to maintain than traditional
software. Regardless of where
your technology lives, data
encryption, fault-tolerant backup
systems, security policies, and
disaster recovery procedures are
imperative for reliable systems.
Don’t be afraid to ask your
provider about their security
protocols and processes that
should already be in place.
• Satisfaction: Does your provid-
er’s platform adapt to changes
in your business processes or
new regulatory guidance as
it is published? Technology
should not dictate how you do
business, but instead adapt and
customize to meet your needs.
Current technology is capable
of meeting these challenges–
without the weeks or months
of delay we experience with
old-school systems, even for a
simple form update. As Kevin
Lombardo, President of Centric
Technology Solutions, LLC,
says, “Bringing new products to
market on a platform should be
a simple process that can be im-
plemented within a short period
of time. As lenders and others
define new needs, we must
be able to develop solutions
quickly.” Technology that can
respond to regulatory changes
overnight sounds like a dream,
but it is tangible and real.
• Savings: Managing multiple
software programs, manually
shepherding orders, and coordi-
nating vendors creates unneces-
sary overhead. Automation is
not a luxury in technology; it’s
the norm and should streamline
the relationship with your valu-
ation providers and customers.
Auto-placement of orders, auto-
matic data validation and comp
scoring, customizable product
configuration, and notifications
are part and parcel of any truly
automated solution.
• Sustainability: If your provider’s
platform is three years old or
more, it’s out of date, which
can jeopardize the quality and
accuracy of your valuations.
Technology moves fast, and so
do changes in regulations, rules,
and customer requirements.
Technology should be able to
adapt to changes in the indus-
try, technology, and business
needs. Ask your provider how
their solutions manage change
in all these areas. They need to
be agile, adapt to constant in-
novation, and develop systems
that improve processes.
• Strategic: Does your solution
offer the tools and resources
to expand your business? Your
provider should be a strategic
partner who understands your
vision and can implement
configurable processes, custom
offerings, automated functional-
ity, and integration services that
react to your business processes
as you grow. Look for providers
who offer support for multiple
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6. 30 | THE M REPORT
products, such as appraisals, BPOs, and
custom valuations, as well as a variety of
report and data delivery options.
As we become aware of the innovations in
technology and what is truly possible, we can
and should expect our technology to address
the main points that are specific to our indus-
try, which we all encounter in our day-to-day
operations. As technology consumers, it’s time
to demand that our software catch up with
changes in our industry, new challenges, and
the ever-increasing pressure we face to provide
fully-compliant, high-quality valuations more
efficiently, and with fewer manual interven-
tions other than high-touch in quality review.
If your provider isn’t focused on next-gen
technology that evolves with the industry
and improves on current processes, then it’s
time to seek out one that does. Keep the
“Top Ten Ss” in mind as you navigate the
wild, wonderful world of valuation technol-
ogy solutions. And remember this: If the
technology doesn’t solve a problem, it’s not a
solution.
JORDAN WILDE, VP of Sales and Marketing
at First Valuation, has a 13-year tenure in the
housing finance and real estate industry during
which he has held senior positions in sales,
marketing, account management, business
development, mortgage origination, underwriting,
private lending, title insurance, and REO sales.
Throughout his experience in the mortgage
banking community, Wilde has gained critical
insight and familiarity with collateral valuation,
mortgage default servicing, market analysis, and
mortgage finance. He is based out of Dallas.
* * *
The FHA Embraces
Electronic Appraisals
W
Changes are afoot at the FHA. Sub-
mitting paper appraisals to the FHA
is about to become a thing of the past.
Starting June 27, 2016, the FHA will
require mortgagees to use its new Elec-
tronic Appraisal Delivery (EAD) portal
for all appraisal and report submissions.
Per the FHA, the EAD is a Web-based
technology system that enables electronic
transmission of appraisal data and reports
to the FHA from mortgagees and/or their
designated third-party service providers
prior to loan endorsement. Mortgagees
can go to ElectronicAppraisalDelivery.com
to submit appraisals or via an integration
that their valuation management software
provider established. After the EAD is
implemented, submitting appraisals manu-
ally to the FHA will no longer be allowed.
In June 2015, the FHA opened up use of
the portal to approved mortgagees to give
users the opportunity to begin testing the
system and become familiar with the new
process. The good news is the way the EAD
works is similar to the Uniform Collateral
Data Portal (UCDP) that the GSEs require
for appraisal submissions. The success that
the UCDP has had ended up making it not
just for use by the GSEs, but also investors
started using it as well, essentially making
it the defacto standard in the industry to
submit, review, and accept appraisals.
The EAD uses the same Uniform
Appraisal Dataset (UAD) that the GSEs use
for the UCDP, so appraisers and lenders are
already accustomed to working with the
UAD format and have integrated the delivery
of appraisals electronically into their business
processes. Like the UCDP, the EAD provides
messaging containing real-time feedback on
compliance with the FHA file format and
data integrity policies.
The expectation is that the EAD portal
will provide an efficient method by which
the FHA can accept files and check, collect,
and enforce guideline requirements. The por-
tal is designed to make appraisal submissions
more efficient and facilitate better quality
appraisals by flagging potential errors early
on. As a result of eliminating paper-based
FHA appraisal reviews, the cost to process
appraisals will be lower and turn times will
be quicker. Loans are also less likely to be
kicked back due to errors, missing informa-
tion, or other data problems.
Getting Started
As soon as mortgagees receive access
credentials from the FHA and validate
that they are ready to use the new technol-
ogy, they can began delivering appraisals
through the EAD portal. Appraisal reports
can be submitted two ways through the
EAD. They can either use the system’s in-
terface that allows up to 10 appraisal reports
to be uploaded at a time, or they can es-
tablish a direct system-to-system integration
with the EAD portal. Once an appraisal is
uploaded, mortgagees will be provided with
a confirmation of successful submission,
or they will be informed that the appraisal
requires correction and resubmission.
FEATURE
By Vladimir Bien-Aime
Knowledge
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7. THE M REPORT | 31
FEATURE
When submitting an appraisal,
the EAD portal will either provide
confirmation of a successful sub-
mission or information regarding
required corrections that need to be
made before resubmission. Once an
appraisal is successfully submitted,
data sharing between the new por-
tal and FHA Connection (FHAC)
will allow for the population of
certain data fields on the FHAC
Appraisal Logging screen.
The FHA has advised lenders to
note the following:
• Appraisals submitted through the
EAD portal remain subject to a
review for compliance with FHA
appraisal requirements.
• Mortgagees remain responsible
for proper underwriting of
the appraisal and for ensuring
the property meets the FHA’s
minimum property require-
ments and standards for serving
as security for the FHA-insured
mortgage.
• The appraiser remains ac-
countable for appraisal quality,
credibility, and compliance with
FHA appraisal requirements.
The FHA states that there are
three main EAD portal roles: 1)
EAD User, 2) EAD Read-Only
User, 3) EAD Administrator.
Depending on the role and per-
missions the mortgagee has been
granted, users can access the portal
to submit, search, correct data
errors and omissions, and view
the appraisal report. Per the FHA,
the mortgagee’s appointed EAD
Administrator is empowered to
add users, manage the user’s access
rights, change passwords, change
user roles, revoke user access, and
establish designated third-party
service provider relationships.
Don’t Wait
Vendors and lenders had to
devote a lot of time and
resources over the past year to
prepare to comply with the new
TILA-RESPA Integrated Disclo-
sure rule that went into effect
October 3, 2015. If not already
started, it is important to now
focus on integrating the new
FHA appraisal process into your
workflow. Figuring out how you
are going to submit appraisals to
the EAD portal should be a prior-
ity. You can submit directly to the
portal or by way of a third-party
technology provider.
Lenders should make sure their
valuation management software
provider or AMC is already start-
ing to establish an interface with
the EAD system. Loan origination
system (LOS) vendors should also
be working with their valuation
software providers to ensure tight
integrations are established. Again,
this shouldn’t be as involved as
when the GSEs mandated use of
the UCDP because the systems are
so similar and the same technol-
ogy vendors will be working with
the FHA’s submission platform.
It’s notable that the FHA isn’t
stopping at its EAD portal. It will
also start enhancing or adding
other technologies, such as when
electronic signatures on most loan
documents was introduced in 2015.
Adoption of e-signed promis-
sory notes and the development
of an electronic case binder to
replace paper-based files are also
planned. The FHA’s Computerized
Home Underwriting Management
System, which has been the FHA’s
insurance endorsement system of
record for more than 30 years, will
also be upgraded in phases. So
be prepared for a number of new
FHA technology changes in 2016.
EAD adoption rates are expected
to be high and system issues to be
low. Still, it’s important to start us-
ing the portal now. Lenders should
begin planning their own timelines
to test the system, establishing their
own internal processes and proce-
dures, assessing staffing needs, train-
ing staff, working with investors,
and involving necessary vendors for
a smooth launch.
In order to start using the EAD
portal now, mortgagees just need
to register for and participate in
the FHA’s on-boarding process.
Registration transpires within FHAC.
VLADIMIR BIEN-AIME is CEO
and Co-Founder of Global DMS, the
award-winning pioneer of Web-based
appraisal process management software
and a provider of technologies used
across the mortgage process. He is an
appraisal compliance expert with
specific knowledge of the most current
federal, state and local appraisal-
related regulations, including the
Dodd-Frank Act and new Interagency
Guidelines, as well as initiatives such
as Uniform Appraisal Dataset and
Uniform Collateral Data Portal.
For more information, questions,
and guidance, lenders can visit
GlobalDMS.com/ead-help.
It’s notable that the FHA isn’t stopping at
its EAD portal. It will also start enhancing
or adding other technologies, such as
when electronic signatures on most loan
documents was introduced in 2015.