Reggora, an appraisal management software company providing real estate valuation services for mortgage lenders, worked with STRATMOR Group to quantify mortgage lender appraisal operations and performance. Comparing the industry’s performance with the outcomes of their 120-plus lender customer base, Reggora determined it saves a typical lender $258 per loan by automating the appraisal order management process, the company announced in a release.

The savings is realized by reducing time spent on billing, order management, and quality control, as well as reducing cycle times and better managing appraisal fees, the company stated.

With production costs on the rise and volume on the decline, the savings come at a time when many mortgage lenders are experiencing significant margin compression.

“Reggora has helped shrink turn times, open up communication and transparency, and eliminated surprises from our appraisal process,” Kevin Peranio, PRMG (Paramount Residential Mortgage Group) chief lending officer, said in the release. “Having a solution that keeps everyone on the same page, reduces time and errors from the process, enables an exception-based pipeline management strategy, and actively manages vendor fees, has combined to drive down our cost to originate and improved margins.”

The cost savings are primarily generated across the operations and finance departments, alongside the elimination of revenue lost from appraisal fees and reduced cost of funds. Savings are realized in the following areas:

• Appraisal billing, resources spent managing invoicing, payment collection, and financial tasks related to collecting appraisal payments and paying appraisal vendors, $34 per file;
• Cycle time, a faster mortgage cycle time and reduced carrying and hedging funds costs, $43 per file;
• Appraisal fees, reduced revenue leakage due to appraisal fees not collected by the borrower (i.e. deal is lost or a fee escalation without a change of circumstance), $56 per file;
• Appraisal order management, resources spent managing the appraisal order (ordering, communication, receiving & follow-up), $44 per file; and
• Quality control, resources spent QCing each appraisal, $81 per file.

"Our goal is to reduce a lender’s operating costs and make them more competitive with a fast, convenient digital mortgage," Brian Zitin, CEO and co-founder of Reggora, said. “By fixing the bottleneck that appraisals have become, we’re able to turn appraisal operations into a revenue generator for our customers.”