The Strategic Advantage of Certainty in Mortgage Lending

What do mortgage borrowers and lenders want most in a mortgage transaction?

Contemporary society is shaped by the attraction to instant gratification. The mortgage industry is not immune, and lenders face pressure to deliver fast closings, which is nothing new. In fact, I recall a push many years ago when I was working at Washington Mutual Bank to get to a 10-day close. Certainly, reducing the time needed to close a loan is appealing.  Yet, surprisingly, a recent Cotality borrower survey makes clear: speed alone is not enough to meet borrower or lender expectations. Comfort, confidence, and certainty—especially in collateral valuation—are what matters most to borrowers and lenders.

The From House to Home – Cotality Report 2025 reveals that 43% of buyers say they want faster decisions when finding a home. The urgency drops sharply after the initial steps of making an offer or selecting a mortgage provider. Buyers make clear they crave comfort, certainty and clarity more than speed. What buyers really want is predictability—especially in timing.  Buyers want the ability to move quickly—but only when they have certainty. This is relevant to the mortgage lending industry because when borrowers take longer to gain confidence, outcomes may be affected, buyers may hesitate, transactions can slow, and systems may experience delays. Let’s keep this in mind as we continue to explore the lending process.

The Friction Point: Uncertainty in Loan Manufacturing—Where should the industry direct its energy?

ICE Mortgage Technology reports that the average time to close a loan in September 2025 was 42 days, which illustrates the current state and complex nature of loan manufacturing. To manufacture a loan, multiple documents must be provided, compiled, and underwritten to verify a borrower’s creditworthiness, ability to repay, and adequacy of collateral. Until each of these tasks is complete, there is uncertainty as to whether the loan will be approved, creating discomfort for stakeholders.

The collateral valuation process is frequently viewed as the final, most unpredictable component of the loan manufacturing cycle, bringing friction and uncertainty. It is my observation that this friction is often laid at the feet of the appraiser when, in fact, the appraisal and appraiser with the national average turn time of 5-6 days is not the bottleneck, rather it stems from the lender’s operational processes. Lenders typically compile the documents and information needed for a mortgage loan in a deliberate sequence; creditworthiness followed by collateral suitability.  Lenders tend to wait until other loan steps are complete before ordering an appraisal, in part because the borrower usually pays for the lenders appraisal process.

In this typical sequencing, lenders and borrowers must then wait for the outcome of the appraisal to understand if the collateral value or property eligibility will be a problem—a structural issue caused by how lenders choose to manufacture and pay for the components of the loan package.

The Real Cost of Errors: Extended Appraisal Turn Times & The Correction Cycle

Even more painful than a slow turn time are the process delays and uncertainty which can be caused by the collateral underwriting process. Cotality data indicates that nearly half of all appraisals are reworked, the majority for preventable revisions or clarifications. Regardless of the reason, this revision cycle can take hours, more often days. Far more impactful than the time to resolve is the frustration, closing risk, and elevated operational cost that accompanies the revision request, it often being a last-minute condition to approve, close or fund.

Fixing a defect late in the process is exponentially more expensive: the adage applies, if you fix something at the beginning, the cost is $1; if you fix it a week later, it costs $10; if you fix it 2 weeks later, it costs $100.  Revisions resulting from inaccurate or incomplete property information provided during the initial loan application process—and subsequently communicated to the appraiser—may adversely affect a lender’s ability to establish initial certainty. Furthermore, such errors or revisions can complicate loan approval or collateral eligibility, adding downstream loan salability or repurchase risk for lenders, and when representations and warranties (R&W) relief is misunderstood or lost due to preventable mistakes or incorrect assumptions, lender uncertainty and risk increase significantly.

Quality as the Catalyst for Speed

GSE commentary on appraisal quality expectations is clear: Quality is not negotiable. Borrower data validates this approach: Comfort ranks above loyalty and convenience as a predictor of professional reuse.   Fannie Mae’s Quality Insider newsletter has consistently highlighted appraisal quality concerns to their lender clients, such as comparable selection, accurate property descriptions, and supported adjustments as significant drivers of loan findings and press lenders to improve their collateral underwriting process which means both lenders and appraisers need to up their game.  Lenders need to collect, verify and provide accurate collateral data when initiating a loan application, appraisers are also responsible for collecting and reporting accurate and complete property information. Today’s technology allows lenders as well as appraisers and AMCs to efficiently verify that property descriptions align with public records, and to report or resolve any discrepancies before delivery. 

Quality Enables Speed

The myth that speediness is the game changer is debunked by both borrower experience and GSE guidance. In the same vein, slowness is unacceptable. In my observation, those who focus on the customer’s true desires—comfort and certainty—will win. In collateral valuation, that means focusing on quality. Do it once, do it right.  Appraisers need to earn the trust of their clients, allowing lenders to feel comfortable ordering the appraisal earlier in the process. 

My point is twofold. First, speeding up the appraisal process is good, and it is not the solution to a quicker loan closing in the vast majority of cases. Appraisers need to do their part to ensure the collateral underwriting process goes smoothly. Plan, think, prepare, and proof your appraisal report using technology-based tools to check reports in the same way the lenders and their AMCs do to ensure lenders can get to certainty and comfort quickly. Appraisers can make this process for lenders easier. The Fannie and Freddie selling guides are easily accessible, and in most cases, lenders are looking for compliance with these guidelines. Appraisers can use AI to play the role of an UW to help preemptively mitigate issues that extend the appraisal process or erode borrower and lender confidence in the appraisers opinion.

Lenders can restructure the mortgage manufacturing process to run tasks in parallel rather than in sequence for greater efficiency. Until we see the lending industry make changes, appraisers must ensure accurate, reliable appraisal reports with clear commentary on any known discrepancies and anticipated underwriting issues are delivered to lenders the first time, removing process friction and allowing lenders to move quickly with trust.

By investing in quality-first solutions, lenders and appraisers can deliver certainty resulting in faster closings, happier borrowers, and a more resilient mortgage ecosystem. Quality is the catalyst for speed, and certainty is the true currency of collateral valuation.

These comments and opinions are those of the author, and do not necessarily reflect those of their employer or any organization they’re connected to.