United Wholesale Mortgage (UWM) unveiled a new policy this week, telling brokers that appraisals will be completed within 10 business days or they’ll refund 50% of the appraisal cost back to the customer.
The initiative, called “Appraisal Promise,” drops just a week before the wholesale lender’s Wall Street debut on Jan. 22. UWM is merging with a special purpose acquisition company led by Alec Gores. It’s expected to achieve a valuation of $16.1 billion following the merger, the largest SPAC to date.
UWM, the top wholesale mortgage lender and the second largest originator in America, has been trying to generate buzz with its broker set through a series of product launches and sweeteners.
UWM’s rule stipulates that only appraisals that go through an approved appraisal management company are eligible for a 50% credit should it not be completed within the 10 business days.
HousingWire recently spoke with CoreLogic’s Chief Appraiser Shawn Telford about re-examining traditional appraisal workflows in light of the changes brought on by COVID-19.
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“We are always looking for ways to support our brokers and help them win,” said Mat Ishbia, President and CEO of UWM. “We consistently find opportunities to make the process faster, easier and cheaper. Appraisals are one piece of the process where speed matters, and our new Appraisal Promise will give brokers confidence that enable them to get borrowers into their dream home as quickly as possible.”
When lenders were struggling to meet capacity for most of 2020 and turn times eclipsed 30-plus days, many fingered appraisals as contributing to the logjam.
The Federal Housing Finance Agency is currently considering implementing hybrid appraisals that enlist a third-party – typically an appraiser trainee, home inspector or real estate agent – to collect the data for a lender and certified appraiser once past the automated underwriting system.
According to the FHFA, hybrid appraisals would increase coverage for rural markets and high-volume areas where speed matters. In August, several lenders voiced concern over the appraisal industry’s finite number of appraisers and underwriters as well as quotes taking anywhere from 10 to 27 days to hit the lender’s desk.
Though hybrid appraisals are faster and usually cheaper, adding another cook in the kitchen could complicate matters since a uniform set of standards does not currently exist that hold non-appraisers accountable for their appraisals, the FHFA said in late December.