INCORPORATING A DISCUSSION OF RISK IN APPRAISAL: A NEW DIRECTION FOR THE APPRAISAL INDUSTRY

Martin A. Skolnik

The Valuation Journal, 2019, vol. 14, issue 1, 81-97

Abstract: Risk is an ongoing discussion in the mortgage lending industry, both across property types and geography, and on a property-specific basis. During an appraisal engagement, appraisers collect and discuss many risk factors that might tangentially describe the risk to the mortgage lender, but the appraiser’s analysis of risk is embedded into the report’s narrative and not a distinct discussion. This article outlines a framework for a potential expansion of the appraiser’s scope of work (and new business opportunities) to evaluate and discuss risks, which might affect how lenders analyze the subject property, and also result in a more uniform consideration of mortgage risk. This framework would also provide a new value-added opportunity between lenders and appraisers beyond what is typically part of appraisal reports.

JEL-codes: G32 R3 R31 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:vaj:journl:v:14:y:2019:i:1:p:81-97

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