A Recap of the 2024 Valuation Expo
Last month, our CEO Ashley Jelinek, attended the Valuation Expo Conference in Las Vegas along with more than 500 other appraisers, lenders, AMCs and valuation professionals. Recently we sat down with her to get her take on the event.
Q: To start off, what was your overall impression of the conference?
A: This was my first time at the event in a few years and it was definitely a more upbeat, positive feel than previous years. The two main focuses of the event were the recent regulatory changes that are going to significantly impact our industry and how technology will help appraisers adapt to these changes.
Q: What were some of the regulatory changes that were discussed?
A: The new Uniform Residential Appraisal Report (URAR) that will have a preliminary rollout next year and then be fully implemented, theoretically, in 2026 was a big point of discussion. The URAR is used for all appraisals done for GSE loans and for the past five or six years, both Freddie and Fannie have both been working to give the report a “makeover”. The goal is to replace the current appraisal forms – 1004, 1075, 1073, 2055, etc. – with one flexible, dynamic report that can be completed on existing vendor software. In 2026, when the new report is mandated, the other forms will be retired.
This has significant impact across the entire industry since this has the potential to completely change how appraisers work. To use the new report and comply with the new standards, appraisers are going to have to do the data collection with a mobile app in the field, if they’re not already, it’s not something that can be easily done with a pen and paper.
Q: Does the new report have new required data fields?
A: Yes, the new report will feature more standardized data fields, including additional information related to property characteristics, market conditions, and risk assessments. It will also include enhanced requirements for documenting the appraiser’s comp selection process. While appraisers won’t necessarily be required to include every comparable sale they reviewed, they will be expected to provide more transparency regarding their selection criteria and justify their choices. The thought behind this is that it will make revision requests easier by pre-empting questions like: “Did you consider this comp?”
The ultimate goal behind all the new data fields is to reduce the free form commentary at the end of the appraisal report by incorporating additional standardized data that will make the report less subjective. The new report will also present the information in a better, more streamlined fashion.
Q: What were the main concerns about the URAR?
A: There is certainly speculation that this may cause fees and turn times to increase and revision rates to go up, at least initially as appraisers and lenders get comfortable with the new report. This will also require significant software changes on the appraiser, AMC and lender side. One of the bigger concerns that we’re hearing is about non-GSE lending, specifically home equity lending. Currently many home equity lenders are using 1004 and 2055 forms. The question now is, will the lenders stick with those forms for home equity, even after they switch to the updated URAR for their first mortgage GSE business? There are similar concerns about portfolio lending. Will non-agency lenders have to run a parallel process? Will there be a period when some lenders are using the old forms and while others are transitioning to the URAR? This could potentially cause a lot of chaos with underwriting trying to manage both forms at once. In any case, there is going to be a need to invest- both time and money- into training on the new URAR.
Q: There are other regulations that are also coming and/or have recently passed, were some of these discussed at the show, as well?
A: ROVs were definitely a hot topic. Fannie, Freddie and HUD have updated their ROV policies to provide “clearer expectation for lenders, appraisers and borrowers.” The new guidelines aim to promote consistency, ensure fair lending practice and streamline the appraisal review process. Appraisers are worried with the new ROVs they’re going to get more revision requests. The GSEs’ point of view, however, is that actually the new ROV should help appraisers because there will be a more standardized process for submitting them, including what the borrower has to include. Now whether that’s true or not, we’ll see. Our hypothesis is, at least at the beginning, we’re probably going to see an increase in requests, but there didn’t seem to be too much concern over this. Overall, the updated URAR is expected to be a bigger change for the industry than the new ROV guidelines.
Q: What technology was discussed that has the potential to significantly help appraisers keep up with and comply with these new regulations?
A: A lot of the technology that’s currently out there while still fairly new is starting to become mainstream. There was a lot of discussion around appraisers using mobile applications during the inspection to capture collateral data and create the floor plan, which should then expedite the appraisal report creation process. I also think computer vision technology has significant potential for our industry. It can be used at the time of inspection to provide real-time feedback on the photos that are being taken, and it can also be used to determine condition and quality ratings in a more objective and consistent manner. CSS also plans to use this technology during the appraisal review process.
Q: Now for the hot topic in the appraisal community…appraisal bias. A touchy subject but one that’s nonetheless on everyone’s minds.
A: It’s certainly a touchy subject. However, the main message at the tech conference was that technology can play a big role in protecting appraisers against these claims. For example, technology that can blur out or eliminate any pictures of prohibited subjects, religious artifacts or personal information can remove the potential for bias before it even gets to the appraiser or lender. Also, technology and the new forms will reduce the commentary on subject properties that is often scrutinized—unfairly in the vast majority of cases—and that can become the basis of bias charges.
Q: Finally, what advice would you give appraisers to help them prepare for these upcoming changes?
A: Stay informed and proactive. Keep up with the latest developments in regulations and technology. Investing in continuing education and training will be crucial as will adopting new technology that can help in meeting the new regulatory requirements. Building strong partnerships with technology providers and staying engaged with industry associations can also provide valuable support.
Ashley is the CEO of CSS and oversees all aspects of the company’s strategy and operations.
Corporate Settlement Solutions is a single-source provider of real estate title, closing, valuation, flood and recording solutions.
Our team is highly engaged in delivering results that make our customers more efficient, effective, and profitable.
Contact sales@visitcss.com to get started!
