An increasing number of brokers are seeing exponential growth in the number of deals mortgage insurers are sending back for appraisal, a move they argue is costing clients valuable time and possibly themselves valuable credibility.
An increasing number of brokers are seeing exponential growth in the number of deals mortgage insurers are sending back for appraisal, a move they argue is costing clients valuable time and possibly themselves valuable credibility.
"The funny part is I don’t think I’ve had appraisal come back that was off value and they were ultimately approved, but what’s happening is time is being wasted and it is straining broker credibility with some clients who are turned off by the paperwork,” says Sherisse Hume, an agent with TMG The Mortgage Group in Edmonton. “Some of those clients are now saying, ‘yes, I know you have the better rate, but I don’t want to go through all that paperwork again.’”
Other brokers across the country are pointing to the same phenomenon at two of the three default insurers. In Hume’s case, the change has been night and day, with “almost all deals” being flagged for appraisal. That’s distinctly different than the one in 15 that were subjected to the same fate as little as a year ago.
Ironically, many mortgage professionals are sympathetic to the greater scrutiny all files are now subject to under lending guideline tweaked last summer. Still, there’s some concern that brokers are bearing the brunt of that deeper examination, said another mortgage professional, worried the banks may inadvertently been handed a competitive advantage.
But criticism over insurer-ordered appraisal is a perennial concern for many brokers, who point to the growing conservatism compounded by a softening real estate market.
The trend may actually continue as sales further slow and home values suffer a modest correction in some markets, according to industry analysts.
