You go to get a loan. You get your documents together, sign the application, make sure the rate is good. Things are cruising along. And then…days go by. You hear nothing. And when you call your LO, he says “we’re waiting for your appraisal.” What? Why? Shouldn’t it be easier than this?
There are two things you 
ought to know. First, this is a terribly difficult market. It’s very tough for appraisers to find comparable sales in markets that are slow, and as you might have heard, this is one slow market. I had one appraisal come back the other day for which there were no recent sales at all in that zip code. None. How does an appraiser establish the value of a home for which there is no verifiable market? Appraisers are having huge difficulty finding the comparable sales necessary to complete their appraisals, and this is making the process take a lot longer than normal.
ought to know. First, this is a terribly difficult market. It’s very tough for appraisers to find comparable sales in markets that are slow, and as you might have heard, this is one slow market. I had one appraisal come back the other day for which there were no recent sales at all in that zip code. None. How does an appraiser establish the value of a home for which there is no verifiable market? Appraisers are having huge difficulty finding the comparable sales necessary to complete their appraisals, and this is making the process take a lot longer than normal.
The second thing is that the regulatory environment is causing enormous delays. It seems like every day we have new forms to fill out, new agencies to deal with, and new hoops to jump through. Recently all FHA loans began requiring a set of new forms for appraisers to fill out. Those forms take another couple of hours per appraisal. Almost simultaneously, Fannie Mae and Freddie Mac instituted the Home Valuation Code of Conduct (HVCC), which added another layer of bureaucracy to the appraisal process, and in many cases both increased appraisal cost and slowed down processing time (for a deeper look at HVCC and how to fix it, see this article).
Both of the above are combining to make the job of establishing the value of a home much more difficult. It’s made the ordering of appraisals harder, made the construction of an appraisal take longer, and establishing a value (which is the whole point of the appraisal) more time-consuming than it once was. That’s why it’s taking so long.
This probably doesn’t help you feel any better, but you’re certainly not alone. It’s a tough market, and everything from appraisals to underwriting has slowed down considerably, for almost everyone. Tell your LO to keep you updated, even if he doesn’t have anything to report, and just hang on. You can make it.
Story by Chris Jones
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