When Appraisal Management Software is not enough

Appraisal Compliance is a must for all lenders doing mortgage business today. Wi
th the HVCC, FHA appraisal Compliance, OTS and OCC regulations there is simply n
o way to get around not ensuring an arms length appraisal transaction. Over the
past few months appraisal management software companies have sprung into action
trying to get lenders to manage the process themselves and bypass appraisal mana
gement companies.
Gaithersburg, MD - April 21, 2010 -- The selling point is that if you take contr
ol of the appraisal process internally that you will have a better overall appra
isal process and can still hold on to some control. This may reign true in some
cases however generally speaking the idea of self managed appraisal process is n
ot ideal, nor should it be looked at as a long-term option for a company geared
towards growth and on good terms with an investor.
The industry has made a major shift over the past year and the vast majority of
loan officers, processor and other interested parties are honest people and do n
ot want any collusion or misrepresentation on their appraisal. However, even wit
h all good intentions over time things will tend to relax and it would be very e
asy for a loan officer or other interested party to walk over to the appraiser d
epartment and ask for a favor.
The HVCC and FHA appraisal compliance requires that all mortgage companies must e
stablish, maintain and enforce written policies and procedures that are designed
to reinforce independence and Dave Stephens was indicated that a lender must sho
w absolute lines of independence . The practicality of a small regional lender or n
ational lender establishing absolute lines of independence is not realistic withou
t setting up an entire new office with a staff appraiser, manager and processors
to ensure compliance.
Most mortgage companies who have decided to risk the in-house process are not near
ly as equipped or trained as the code requires and have typically moved a proces
sor to order appraisals for a period of time. This has not been as much of an is
sue currently as most lenders have not gone through their audits with FHA, OTS a
nd investors. However, when this does happen how are they going to convince to t
he investor absolute lines of independence when the appraisal department is in the
same office as the processors and production staff who are interested parties?
By moving the appraisal process to an independent third party you not only add a
n extra layer of protection against collusion but also increase investor confide
nce, reduce cost and enhance the productivity of the loan processors, and loan s
taff as its handled off site and out of mind.
Besides all of these other benefits when appraisal services were handled in-hous
e, overhead costs get higher with production and when volume dips layoffs will b
e apart of the process. If volume spikes companies would be forced to rehire and
could be forced to just assign the appraisal rather than get the appraisal done r
ight.
The best part is about moving the process to an independent third-party is the c
ost is usually free to the client or at a heavily reduced cost due to most appra
isal companies having economies of scale and can process more orders, faster and
more efficiently than any in-house process.
By outsourcing your appraisal process, your quality, turnaround time as well as
cost will remain consistent regardless of volume. Conflicts of interest will van
ish and variable costs will turn into profits. Any investors questions will be e
asily answered by your third-party and any errors will be covered by the third-p
arty and not your company. By adopting a truly independent appraisal process you
 ensure the long-term success of your company, future growth and keep on the goo
d side of the investors.
About Coester Appraisal Group :
Headquartered in Gaithersburg, Maryland, Coester Appraisal group has been provid
ing quality real estate appraisals since 1970. Clients that depend on Coester s ap
praisals, BPO s, AVM s and property valuation tools include banks, credit unions, mo
rtgage companies, hedge funds, attorneys and government agencies. Their experien
ced staff provides a quality valuation completed in a timely manner with a corre
ct estimation of market value. Each appraisal is manually reviewed by a staff ap
praiser for quality and compliance with lender s underwriter guidelines and is cer
tified HVCC and USPAP compliant. For additional information about the company an
d its services, please visit their website at www.coesterappraisals.com. e-mail:
sales@coesterappraisals.com
Contact:
Brian Coester
Coester Appraisal Group
Gaithersburg, MD
(888) 485 - 1999 ext 2
Bking@coesterappraisals.com
http://www.coesterappraisals.com
http://www.appraisalnewscast.com
http://www.twitter.com/bcoester
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