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When Appraisal Management Software is not enough
When Appraisal Management Software is not enough
Appraisal Compliance is a must for all lenders doing mortgage business today. With the HVCC, FHA appraisal Compliance, OTS and OCC regulations there is simply no 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 management companies.
India,
TN,
India
(prbd.net)
30/04/2010
"absolute lines of independence"
The selling point is that if you take control of the appraisal process internally that you will have a better overall appraisal 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 not 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 not want any collusion or misrepresentation on their appraisal. However, even with all good intentions over time things will tend to relax and it would be very easy for a loan officer or other interested party to walk over to the appraiser department and ask for a favor.
The HVCC and FHA appraisal compliance requires that “all mortgage companies must establish, maintain and enforce written policies and procedures that are designed to reinforce independence” and Dave Stephens was indicated that a lender must show “absolute lines of independence”. The practicality of a small regional lender or national lender establishing “absolute lines of independence” is not realistic without 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 nearly as equipped or trained as the code requires and have typically moved a processor to order appraisals for a period of time. This has not been as much of an issue currently as most lenders have not gone through their audits with FHA, OTS and investors. However, when this does happen how are they going to convince to the 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 an extra layer of protection against collusion but also increase investor confidence, reduce cost and enhance the productivity of the loan processors, and loan staff as its handled off site and out of mind.
Besides all of these other benefits when appraisal services were handled in-house, overhead costs get higher with production and when volume dips layoffs will be 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 right.
The best part is about moving the process to an independent third-party is the cost is usually free to the client or at a heavily reduced cost due to most appraisal 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 vanish and variable costs will turn into profits. Any investors questions will be easily answered by your third-party and any errors will be covered by the third-party 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 good side of the investors.
About Coester Appraisal Group :
Headquartered in Gaithersburg, Maryland, Coester Appraisal group has been providing quality real estate appraisals since 1970. Clients that depend on Coester’s appraisals, BPO’s, AVM’s and property valuation tools include banks, credit unions, mortgage companies, hedge funds, attorneys and government agencies. Their experienced staff provides a quality valuation completed in a timely manner with a correct estimation of market value. Each appraisal is manually reviewed by a staff appraiser for quality and compliance with lender’s underwriter guidelines and is certified HVCC and USPAP compliant. For additional information about the company and 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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