Atlas VMS reported that second appraisals on Home Equity Conversion Mortgage (HECM) loans declined to 8.3% in Q1 2026 from 10.4% in the prior quarter, according to Erik Morin, the company's executive on the matter. The shift reflects improving efficiency in the reverse mortgage appraisal process, though every second appraisal still adds meaningful cost and time to loan closings.
HECM loans require appraisals to determine home values, which directly affect borrowing capacity for seniors. When initial appraisals fail to meet lender specifications, second appraisals become necessary. This adds 300 to 500 dollars per loan and extends timelines by one to two weeks, frustrating both borrowers and lenders.
The 2.1 percentage point drop signals that Atlas VMS, a valuation management company servicing the reverse mortgage sector, has tightened appraisal quality controls. Better appraiser selection and clearer guidelines reduce rejections on first submissions. For lenders, this means fewer costly rework cycles and faster turnaround times.
The improvement also coincides with Atlas VMS's acquisition of AIM-Port, a smaller valuation services platform. The combined entity gains scale and technology to streamline appraisal workflows. Consolidating platforms reduces duplicative steps and strengthens data integration between loan originators and appraisers.
For borrowers aged 62 and older using HECMs to access home equity, faster appraisals mean quicker access to funds. For lenders, lower second appraisal rates improve profitability per loan and reduce operational friction. Mortgage servicers benefit from accelerated closings and cleaner files.
The HECM market has faced headwinds from rising interest rates and tighter