United Wholesale Mortgage (UWM) is launching an in-house appraisal service, giving its brokers an alternative to appraisal management companies (AMC) starting October 1.
The program gives UWM the ability to handle the appraisal on its own by contracting directly with appraisers. UWM CEO Mat Ishbia said AMCs are “middlemen” that cause unnecessary delays in the lending process.
“We understand how important it is for independent mortgage brokers to get a fast and efficient appraisal on their borrowers’ home,” Ishbia said. “This new team will be using state of the art technology, making it faster and easier, so brokers and borrowers can get the elite client service they deserve and expect from UWM.”
AMCs are regulated by state agencies and are required under the Dodd-Frank Wall Street Reform and Consumer Protection Act. But brokers have criticized them for cutting into their wages.
“Genius idea and helps all including the appraisers who are underpaid by these AMC’s,” one user commented on Ishbia’s Facebook Live announcement. Another said, “This is the type of thing that could be a knee-capper for retail. The only place where brokers haven’t been better. HUGE DEAL and this is coming from a decades-long top-shelf appraiser.”
Brokers can still choose to use any of 100 UWM-approved AMCs. But brokers who opt into the in-house program will have the process managed by the Appraisal Direct team, which handles everything from scheduling to delivery.
However, some independent brokers say privately they’re concerned this may lead to yet another effort by UWM to limit their options. They point to Ishbia’s mandate in March that his company will not do business with brokers who work with his competitors. Critics called the edict “bizarre,” “unethical,” “anticompetitive” and antithetical to the whole broker model
In the future, will brokers be pressured to get appraisals through UWM?
“It’s a win for the appraisers, they’re going to get 100 percent of the comp,” Ishbia said. “It’s a win for borrowers, because they’re going to pay less, and get better quality appraisals. It’s a win for brokers, you’re going to get better quality appraisals, faster appraisals, and the best appraisers are going to work with UWM.”