Residential Lenders Targeting 21-day Close
In an article by Bonnie Sinnock on 1/9/2017, there was mention of 21-day closing times. I’ve also been seeing commercials for RocketMortgage, which is QuickenLoans new product. Their promise is for instant approval and ‘rocket-fast’ closing on your refinance or purchase. Obviously, market research has shown that borrowers don’t want to wait 2 months to close on their house. While I don’t doubt that closing times will be begin to decrease, I think that will be a product of less volume of loan applications coming in in first quarter 2017, not necessarily a big step in technology or change in banking guidelines. I recently purchased a home in Louisville, Kentucky and it took 10 weeks to close.
Residential appraisers need to continue to do the higher quality work that we’ve been able to produce post-recession. In my early appraising years of 2003 to 2008, we produced a 2-page appraisal plus addenda (photos, maps, etc..) That means the ‘reporting’ time (typing time) was reasonable given the fee. Now, I produce a 12-page appraisal plus addenda that gives the same answer as before…it’s the ‘reporting’ time that has increased. While fees have crept up a bit, it’s still out of balance.
I think a 21-day closing is possible for a cookie-cutter house, no maintenance issues, non-FHA, non-VA, conventional loan assuming appraisers are not up to their necks in work and can view the house. Our firm calls to schedule the day we receive the order. That cuts down time. We strive to turn the reports in 2 days after inspection, which cuts down time. If you are an appraiser, think about how to shrink the different lead times in your process. If you are a lender, start to ask those questions and see if your appraisal provider is striving to provide the next level of customer service.