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I N D U S T R Y I N S I G H T / M A R K J O H N S O N
Forty years ago, consumer-based computer technology
began to touch our lives in substantially different ways.
Microsoft Office was first released in 1989. at same
year, the first of 24 satellites was launched to support
the Global Positioning System (GPS) that we now rely
on daily for navigation.
During this same period, the current
methods of appraising property were initially
fortified under the rules emanating from the
Financial Institutions Reform, Recovery, and
Enforcement Act (FIRREA). Congress formed
the Appraisal Subcommittee, as well as the
Appraisal Foundation, which authored and
continues to update the Uniform Standards
of Professional Appraisal Practice (USPAP).
It is hard to imagine but prior to FIRREA,
no federal rules regarding appraisal practices
existed.
e government-sponsored enterprises
(GSEs) were coming of age with standards
for loan production and servicing. At that
time, appraisers were using notepads, manual
tape measurers, and bulky, low-resolution
cameras often taped with the photos to the
appraisal reports. Many of the forms still in use
today—including the infamous 1004 Uniform
Residential Appraisal Report—were put into use
as dictated by the GSEs.
While the entire mortgage process from
application to servicing is being challenged to
operate in a more efficient manner, one of the
hottest topics in recent months is how best to
appraise the value of a home.
Conventional wisdom and regulatory history
is being challenged across the industry as a
direct result of the technology enhancements in
data and analytics (DnA) now available to the
marketplace.
WHAT HAS EVOLVED?
e appraiser operating in a local market has
historically been considered the fiduciary. He/
she had access to the most-and best-real estate
data to assess the value of a home. Today, with
the broad expansion of DnA, that is no longer
always the case.
REMAPPING
THE DNA
