Magazine article Mortgage Banking

A la Mode Stays on Cutting Edge

Magazine article Mortgage Banking

A la Mode Stays on Cutting Edge

Article excerpt

MANY MORTGAGE LENDERS CONSIDER HOME LOANS to be a commodity business. If that's so, then selling some of the forms and documents used to originate them is the ultimate test of business resourcefulness. [paragraph] Dave Biggers, founder and chairman of a la mode Inc., certainly rose to the challenge. He founded the Naples, Florida-based firm as a college engineering student in 1985.

Besides his studies, Biggers also was working in his father's real estate appraisal company. Software used to enter data in the standard appraisal forms of that era was written by Biggers for use in the family business.

"But we realized we were building something faster" than what was on the market, recalls Biggers, and began selling appraisal form software to other appraisers. Today a la mode software is involved with half of all residential real estate transactions, he notes.

Not a single line of code from earlier programs is in the current version of a la mode's TOTAL forms engine. Online capabilities and mobile technology are playing growing roles now, Biggers observes.

Apps are available for TOTAL that let appraisers access multiple listing service (MLS) data, view flood maps and make property sketches in the field. A la mode reports that apps have been downloaded more than 250,000 times.

Appraisers can receive and negotiate assignments remotely on Mercury Mobile. Mobile content transfers onto desktop software in an appraiser's office via TOTAL for Mobile as well.

Yet technology developments are just part of how the appraisal industry has changed in recent years. Regulatory oversight of appraisers also has dramatically altered how they work. Biggers says he understands the reasons behind increased watchfulness on the appraisal industry. Yet he believes "the cure is worse than the disease."

Lower fees and increased compliance burdens are causing experienced appraisers to leave the business, Biggers adds. "You can't beat up a critical industry sector every day and expect better results," he contends.

Rolling with the punches

Appraisals have been subjected to increasing scrutiny since the housing crisis. New requirements from Fannie Mae and Freddie Mac are combining with closer examination from lenders.

In 2009, the Home Valuation Code of Conduct (HVCC) was put in place in an attempt to eliminate pressure from originating lenders on appraisers to get a property's appraised value at the same level as the purchase price on the sales contract.

Fannie and Freddie began requiring appraisers to submit data according to standardized definitions with the Uniform Appraisal Dataset (UAD) in 2011. Electronic delivery of appraisals was mandated with the development of the Uniform Collateral Data Portal[R] (UCDP). Together these initiatives allow the government-sponsored enterprises (GSEs) to receive and analyze national valuation data that's being continually updated.

However, appraisers are concerned they could be blacklisted when they put information on a report that is contrary to something in the GSEs' databases. Biggers explains in some cases this could be due simply to a judgment call, such as grading a property on its construction quality.

But without recourse to present their side of these issues, appraisers constantly run the risk of "being judged in a career-altering way" as their performance is evaluated by secondary market investors and lenders, says Biggers. …

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