Gaithersburg, MD -- (SBWIRE) -- 01/07/2010 -- The cozy relationships with the appraisers are gone, the comp checks are gone and the pressure to hit the number is finally gone. Saying appraisal management companies add no value to the mortgage business is like saying police add no value to the safety of the community. Appraisal Management Companies add tremendous value to the appraisal process by not only ensuring an arms-length transaction, but also ensuring the appraisal is done correctly and in compliance with all regulations. Appraisal Management Companies have spent years forming relationships with appraisers all over the country to ensure the most accurate appraisal possible. Unknown to most of the industry, appraisal management companies have been around for decades and the vast majority of them have had a panel of established appraisers well before the HVCC. The value they bring to the lending process ensures the integrity of the appraisal and ultimately the loan file.

10 Reasons Appraisal Management Companies add Value to the Process.

1. Managing the Appraisal Process - It may sound easy to just order the appraisal and close the loan; however, if you have been in the mortgage business for a few years it will become apparent this is not how the process works. There are 100’s of things that can go wrong that need to be handled on a daily basis to ensure the appraisal is returned and properly completed. The term “the appraisal process” is used because appraising is really a process and should be treated that way. When an appraiser is completing a report, their main concern is to ensure the most accurate timely appraisal possible. Having a staff to back them up (the AMC) is also critical to the process. A good appraisal management company will ensure the property gets inspected promptly; assist the appraiser with any technical questions related to the appraisal and ensure the appraisal is back within a reasonable time after the inspection. Once the appraiser is chosen and the report is received the appraisal will be reviewed to ensure the appraisal meets the clients requirements and deliver the final product the way the lender has specified. As long as there are no extensive delays, this entire process should take no more than 3-5 business days.

2. Payment Processing - Appraisers complaining about not getting paid has been a real shot to the mortgage industry’s credibility for years. Most mortgage companies don’t have an extensive payment processing system that can effectively pay appraisers consistently and on time. Appraisal Management companies typically will accept all major credit cards, personal checks over the phone, money orders and also have the ability to front the appraisal fee to the appraiser regardless of if the client has paid them or not. Typically lenders don’t like to pay for the appraisal until the loan closes; this can be 30 -90 days after the appraisal has been completed. An appraiser can’t wait this long to get paid; an appraisal management company would have already paid the appraiser well before the loan closes and will ensure the appraiser is paid on every appraisal.

3. Appraisal Compliance - With the HVCC, OTS, OCC, FHA and other state related appraisal independence requirements, having a totally independent third party handling the appraisal process is something every lender should want and emphasize. This is not only important for compliance with recent regulatory requirements but to ensure the appraisal is done as accurately as possible. If one loan is made with an overinflated appraisal, the lender could end up losing hundreds of thousands of dollars. One loan bad loan could easily eat up 50 good clean loans’ profits. Most of this risk could be avoided by having the appraisal be accurate.

4. Quality Control - Appraisal Management companies have extensive quality control departments to ensure the appraisal is executed properly and will check to ensure the data is presented accurately.

5. Fresh Prospective - An appraisal management company will have several highly trained staff appraisers in the office and will be able to offer valuable insight to both the appraiser and the client on a file. Appraising is extremely complex and being able to have another expert’s opinion on how to handle a particular situation is vital for an accurate appraisal. This process often goes unseen to the client but should be treated as highly valuable because you essentially have a team of appraisers working with you on every file.

6. Innovation - Competition yields innovation and innovation yields performance.Appraisal Management Companies are in business just like everyone else and due to this they constantly strive to invent new ways of serving clients better. The result of this is the clients, appraisers and the borrowers reap the benefits from this which allows the industry as a whole to reap the rewards.

7. Ensuring Arms-length appraisals - The accuracy of the appraisal should be everyone’s main concern. Getting the deal done is just a bonus. The integrity of the appraisal is the most important aspect of the transaction as the value of the collateral is what all vested parties are making their bets on. I often ask clients “if you were lending someone you didn’t know $250,000 to buy a property, would you let them decide who determines the value of the property? And would you want the person you hire to be aggressive or conservative?” More often than not you would want them to be conservative and as accurate as possible because this is your money being spent. For a lender it is their money and they want to know the real number and what the property really looks like. If the value is supportable to facilitate a loan then they are more than happy to make sure this happens. An appraisal management company will ensure the appraisal is done in an arms-length process and that the appraisal is not tainted. They will achieve this by having several firewalls in place to separate the mortgage originator and the appraiser.

8. Multiple Product Offerings - Most appraisal management companies will offer much more than just appraisals and can provide valuable products to assist mortgage lenders with compliance and ensure a better overall operation. From BPO’s, appraisal reviews, AVM’s, title, credit checks, flood insurance are typically offered by most national AMC ’s, you essentially have a full service real estate company.

9. Extensive Order Management System - Being able to order, track, manage, receive updates and deliver the appraisal is something lenders need to ensure their deals are moving properly. Most appraisers are not equipped to do this. By having these systems in place, appraisal management companies offer tremendous value to the client in the form of communication and access.

10. Ease of Doing Business - Appraisal Management Companies allow lenders to focus on getting loans done and not chasing down appraisers. There are 3,143 counties in the United States the average appraiser covers only 3 counties, which means you would have to be in contact with over 1,000 appraisers just to have full coverage. An appraisal management company will take the burden from not only you but your entire company and ensure the best possible product.

I hope these 10 points have assisted you in seeing why appraisal management companies do add value to the appraisal process and that they are in place to ensure the most accurate appraisal possible. They do much more than most people know and give them credit for. They can be one of your biggest allies in ensuring your business is thriving.

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

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Contact :
Brian C. Coester
CEO
Coester Appraisal Group
Gaithersburg, MD
United States
Office: 888-485-1999
Fax: 301-231-8275
E-mail: bcoester@coesterapprasials.com
Website: http://www.coesterappraisals.com
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