"APPRAISALS ARE STILL AN ART FORM," contends Jeff Bradford, founder and chief executive officer of San Jose, California-based Bradford Technologies. He notes that a residential real estate appraiser needs at least 2,500 hours of supervised training to become certified. [paragraph] Yet the mortgage industry "is moving to the science of valuation," says Bradford. "Appraisers are caught in the middle," he believes.
Deploying automation to determine property values isn't simple or straightforward, Bradford suggests. Interpretation is required when comparing sales prices on similar homes, he points out. Comparable sales figures can be skewed by factors ranging from seasonality to neighborhood characteristics, he points out.
Veteran appraisers are aware that values increase for properties higher on a hillside, adds Bradford. Or a house that's close to a Starbucks[R] will be worth more than a similar one near a Dunkin' Donuts[R], he notes.
For most of its three-decade history, Bradford Technologies has focused on placing appraisal information on mortgage forms. Filling out those forms was at the heart of the mortgage process. But today the industry is moving from being forms-based to being data-centric, Bradford says. However, an emphasis on turning out "fast, cheap appraisals" can reduce them to a commodity, he explains.
When it comes to using analytical tools to support their work, appraisers "are slowly moving there," Bradford says.
And Bradford Technologies hopes to be instrumental in helping appraisers make that transition. The mortgage industry, he believes, needs appraisal professionals who are "supported by analytics."
Pulling valuations out of a technological "black box" is a hit-or-miss process, Bradford says. Yet Bradford Technologies is finding it's a "tough, uphill fight" to get appraisers and the rest of the industry in sync.
A technological infrastructure has been built to automate the appraisal process--and Bradford Technologies plays a role in that initiative. PortalDirect[TM] is an appraisal submittal platform that connects both with the Federal Housing Administration's (FHA's) Electronic Appraisal Delivery (EAD) portal and the Uniform Collateral Data Portal[R] (UCDP) used by Fannie Mae and Freddie Mac.
EAD and UCDP collect appraisal report data electronically as part of the mortgage origination process. PortalDirect is unique in that it allows lenders to use a single system to connect with all three...