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Ensuring Appraiser Independence
By Anthony Garritano
As volume falls, instances of fraud are expected to rise. Appraisal fraud like all other forms of fraud is expected to follow that trend. As a result, companies like IRR-Residential, Kansas City, are throwing technology at the industry to solve this issue.
"We're a national residential valuation company. We're in 40 markets in 20 states. We were stated by appraisers and are principally owned by appraisers. We provide valuation services nationwide directly or through affiliates. We do appraisals and appraisal management," noted John Wood, president and COO of IRR-Residential.
The big topic now is ensuring that there is independence in the valuation process, agreed Mr. Wood. "We attended the MBA Annual and it seems like the market is moving back to basics. What does that mean? It means equity and credit matters. The availability of reliable valuations is very important as a result.
"We're about bringing together quality appraisers and connecting them together to allow for a one-stop location to get good-quality valuations. Just as there is a lot of different valuation needs, there is a range of products to fit those needs. If you're talking about a home equity or a refi on a borrower with good credit an AVM is the product to use there. There are times when it is critical to have a live appraisal."
As one failsafe, IRR-Residential ensures that appraisers are already licensed. However, the larger issue is that there has been a change in the market. Lenders have gotten bigger, and appraisers have gotten smaller, so you have a fragmented appraisal industry dealing with a few larger companies, pointed out Mr. Wood. "The risk is that the small appraiser feels threatened because the large company has a relationship with a competitor. There needs to be a source that comes in the middle to get rid of that," he concluded.
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