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Coester Appraisal Group, a nationwide appraisal management company releases its
annual appraisal industry survey. Over 1,559 licensed and certified appraisers
completed the survey with the results shedding some insight into the appraisal
industry and what is really happening in the appraisal industry. The data was collected
directly from appraisers via SurveyMonkey, various websites, press releases and e‐mail.
After further analysis of the data from the Annual Coester Appraisal Group Vendor
Survey, it seems like many of the implications made regarding the state of the mortgage
industry as a whole have been debunked.
FINDINGS
A total of 1,569 appraisers completed the survey, with a majority of appraisers licensed
in one state and some as many as seven. Appraisers in all 50 states are represented in
the survey.
Distance – One‐third of respondents traveled an average of 15‐20 miles from the
appraiser’s place of business to an assignment with an additional 31.4% traveling 10‐15
miles. This is consistent with the TAVMA survey that indicated the average travel
distance for an appraiser is 13 miles ( TAVMA Survey can be found on their
website)
Response Time – As shown in Exhibit 1 and 1A, the average turnaround time of 2‐3 days
from assignment for a Conventional 1004/1073 and 4‐5 days from receipt of the order. This was consistent regardless of it was completed by an apraisal management company or directly to an appraiser.

Exhibit 1

Exhibit 1A

Fees ‐ Contrary to mainstream data reports, 64.65% of appraisers charge the same
amount whether contacted through an AMC or directly by the lender. Fees on
Conventional and FHA 1004/1073 appraisals ranged $350‐$450. One of the more
popular misconceptions in the industry is that AMC’s earn a huge margin by paying
appraisers $150‐$200 while charging the borrower $450‐$500. Our data proves this
wrong, showing that although appraisers quote lenders $350‐$450 for appraisals, they
net $250‐$300 for a Conventional appraisal and $300‐$350 for an FHA report. This
translates into appraisers receiving over 70% – 80% of their original quoted fee and the AMC
retaining the other 30% or 30 cents on the dollar.

Though many may not agree with the changes that the Home Valuation Code of
Conduct (“HVCC”) has brought to the industry including the proliferation of AMC’s,
71.1% of appraisers work for one or more appraisal management companies. This
appears to be a necessary “evil” in order to continue their career and livelihood. The
top AMC’s noted in the survey results are LSI (22.8%), Landsafe (19%), RELS Valuation
(27.59%), Quantrix (16.1%), Solidifi (6.9%), Appraisal Port (11.5%) and Coester Appraisal
Group (5.2%).
Overall, appraisers rate their AMC experience as simply “average.” The demand of
quick turn times coupled with reduced fees were prominently cited for the average
rating. Another reason was the abundance of report stips. The currently lending
environment can, of course, be the counter argument to the last point.

Payment ‐ A considerable number of comments regarding slow pay from AMC’s and
lenders alike were a revealed where 36.9% of appraisers would like to be compensated
on a net 15 payment schedule and 35.4% of appraisers preferring a direct deposit
method of payment. As a result of this survey, while Coester Appraisal Group currently
pays on a net 30 basis, we are currently making improvements to offer direct deposit to our vendors.

General Feedback ‐ The most prevalent feedback on AMC’s pertained to reduced or set
fees. Other concerns that ranked very high on the list are as follows:

1) Turnaround time expectations and pressure‐ Numerous appraisers state that this
is one of their main concerns (besides fees) when it comes to working with
AMC’s. They say that despite the enforcement of the HVCC, they still get
pressured from unknowledgeable staff to get the appraisal submitted
immediately. Appraisers feel as if AMC’s do not have staff members that are not
trained or licensed appraisers, therefore they are not aware of all the factors and
research that go into composing an appraisal report, especially in a rural area.
2) Too much follow‐up‐Appraisers feel that the time they spend answering phone
calls from AMC’s regarding status updates could be used doing more productive
things such as composing reports, doing inspections, etc. Although there are
some companies that may be a little excessive with checking on the status of a
report, but this topic is a double edged sword because there are plenty of
appraisers that do not take any initiative to call the AMC with an update before
they get the chance to call them. To be honest, the calls will stop when
appraisers start being proactive rather than reactive when it comes to the status
of a report. When AMC’s do not know what is going on with their files and the
lender is questioning their competency and reliability, it appears very
unprofessional, so phone calls must be made to the appraiser until an answer is
provided. Period.
3) Better communication‐ Respondents state that when it comes to getting
answers to questions from AMC’s, it definitely needs improvement. They are
disturbed about the fact that these companies expect them to answer questions
immediately, however when it comes to getting an inquiry response that is
imperative to the appraisal process, it is impossible to reach a staff member or
they reach someone who cannot speak proper English.
4) Lack of appraisal expertise/uneducated personnel‐As previously mentioned,
appraisers feel as if a majority of the staff is not competent when it comes to the
appraisal process, especially those that are in the review department. They feel
as if their appraisal reports are solely rated on a “checkbox” scale that AMC staff
is trained to use and that is the extent of their expertise.
5) Unfair/Non‐existence of rotation of assignments‐Appraisers are concerned with
the fact that they can never seem to get into the rotation to receive work from
AMC’s. They feel as if they are just another “fish in the sea” and no matter what
they do, appraisal management companies already have a selected pool of
appraisers that they give repeat business to.
6) Time it takes AMC’s to pay the appraisers‐Coester Appraisal Group is currently
paying appraisers on a Net 30 pay cycle. According to the data results above,
their preferred method of payment is on a Net 15 basis and some appraisers
report payment delivery times of six months after being quoted otherwise.
7) Broadcasting of Appraisal Orders‐Respondents also seem to be disappointed
with some of the methods used to assign appraisal orders, a main concern being
an appraisal “broadcast.” This is when a mass e‐mail is sent out to every
appraiser that services the subject area and the first one to respond to it gets to
complete the order. Appraisers feel as if this is the most impersonal way to do
business because you are not getting to know your vendors at all and some
appraisers even refuse to work with companies that choose to broadcast their
orders.
Global Disclaimer
Coester Appraisal Group specifically prohibits the redistribution of this material in whole or in part
without the written permission of Coester Appraisal Group and Coester Appraisal Group accepts no
liability whatsoever for the actions of third parties in this respect.

DOWNLOAD VENDOR SURVEY

The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.

Coester Appraisal Group one of the best nationwide appraisal management companies added an “appraiser distance” feature to its interactive mapping tool on its company website. The tool which will allow a visitor to enter a property address, the appraisers last name and license number and then automatically calculate the distance the appraiser traveled to get to the subject property. The database which was verified by the ASC.gov website to ensure the accuracy of the appraisers legal address. This innovative tool is designed to provide the mortgage community the ability to hold appraisers and appraisal management companies accountable for the appraisals they complete and assign. The utility is free for anyone and does not require a registration.You can use the tool by going to Coester’s website www.coesterappraisals.com

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.

Coester Appraisal Group a nationwide appraisal management company announced its addition of an appraiser search tool on its website. The search tool which enables a visitor to enter a property address on Coester’s home page and find nearby appraisers within a given market area is a great tool for the industry to verify if the distance traveled to the property is reasonable for the area.  The interactive map was designed to aid the mortgage community in making sure appraisers distance traveled is reasonable for the market area by allowing a visitor to see how many appraisers are within a given market area and there distance to the subject property. The tool is free of charge and is as simple as entering the property address and selecting a radius to search. The database which doesn’t just include appraisers on Coester’s already extremely large national roster but rather is a database of every active appraiser in the united states and has been verified by the asc.gov website. CEO Brian Coester was quoted as saying “ensuring the most accurate appraiser by a local appraiser is our number one concern for the industry. By having the ability to not only see how far the appraiser has driven but to also see how many other appraisers are in the area paints a clear picture of what is happening on a particular file. It gives everyone piece of mind to know the appraiser is local and familiar with the market area or if there not then a clear statement as why they were chosen for the particular assignment”. The map can be found on Coester’s website which is www.coesterappraisals.com and is free for all to use.

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.

Coester Appraisal Group was ranked as one of the best appraisal management companies in the nation by a recent blind survey of over 15,000 mortgage professionals. The survey which was conducted by mortgage professionals found that It really just comes down to service and consistency and that’s were Coester Appraisal Group separates itself from the pack. We thank our clients and our vendors for all of the hard work as it is an honor.You can visit our website at www.coesterappraisals.com or call us at 888-485-1999

Appraisal compliance is a must for any company doing mortgage lending today. From the Home Valuation Code of Conduct, FHA’s recent appraisal changes as well as the OTS and OCC appraisal requirements there is simply no way of getting around ensuring an arm’s length appraisal process.One of the most important things about dealing with appraisal compliance is that because everyone has to play by the same rules now, as a mortgage lender you can truly have a competitive edge by knowing the rules and taking advantage of the level playing field.This guide is designed to give you the edge by educating you and your company on appraisal compliance, solutions available as well as a best practice guide to managing the appraisal process day-to-day.

Everyone who has been in the mortgage business for a few years can understand the conflict of interest associated with having a member of the production staff order an appraisal directly to an appraiser. Most of the production staff have little or no training in appraisals as well as the importance of an accurate appraisal and the negative ramifications of inaccurate or inflated values. Most production staff only care about that the number on the appraisal is at our above what is required to get the loan approved. The appraiser that enables them to make the most amount of money is the appraiser they will use. For obvious reasons this could be a problem if your goal as a financial institution and mortgage lender was for the most accurate valuation of a property for your loan portfolio or to sell. What appraisal compliance does is ensure there is no influence is placed on the appraiser to obtain a specific value, misrepresent the property or exclude certain things that an investor could or would want to know about when deciding on making a loan. In theory achieving appraisal compliance sounds very simple, essentially you are putting a wall between the production staff and appraiser to ensure an uninfluenced value. There are plenty of companies that offer appraisal compliance solutions which meet and exceed the industry regulations for appraisal compliance and we will go over these types of companies in a later chapter.

Coester Appraisal Group a nationwide appraisal management company announced the addition of an industry job board on Coester’s website. The job board which is open to anyone regardless if they are a client or not is set to enable Coester’s clients, vendors and staff to find new prospects as well as new employment opportunities. The idea behind the Job Board was the brain child of CEO of Brian Coester who was quoted as saying “we want our business to be more than “just another appraisal company” we want the lending community to look as us as a partner rather than another vendor and anything we can do to add value to the clients business is well worth the investment as well as the work”. The concept behind the job board is to allow clients, vendors and anyone in the mortgage industry to find employment or seek out new opportunities in an already down and tough market. The board which is only $5 per post and free to clients of Coester enables a community outreach program as well as client interaction.

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.

Federal Housing Authority-insured loans that were 90 days or more delinquent jumped to 558,944 in January – a 62.1 percent increase compared to a year ago, according to a Feb. 19 CNNMoney.com report. In comparison, the number of loans that were 30- or 60-days delinquent fell over the past year. The surge has some industry watchers worried that the agency may need a bailout.

According to mortgage consultant Allen Hardester, aggressive originators pushed loan qualification requirement limits for risky borrowers in order to secure FHA backing after the subprime lending market ended in 2007. “They took advantage of lax underwriting by FHA to interpret the guidelines broadly,” Hardester told CNNMoney.com.

Adding to the problem, the number of FHA loans has grown over the past three years since the housing meltdown from a small percentage of the market to around 40 percent of all loans. “There are a lot of young loans in the FHA book,” Mike Fratantoni, a vice president at the Mortgage Bankers Association, told CNNMoney.com. “Mortgages typically hit their peak delinquency rates two or three years after origination.”

However, Jay Brinkmann, MBA’s chief economist, said the increase in delinquencies may be a statistical glitch and not a trend. According to Brinkmann, lenders and servicers are reluctant to foreclose on homes that they think will be difficult to sell, which keeps some seriously delinquent loans in the 90-day category for a longer period. Moreover, many lenders are in the process of modifying loans for struggling homeowners, which also keeps loans in the 90-day category for an extended period.

While the FHA has not changed its policy on risk-based pricing for borrowers, the agency now requires a 10 percent down payment from borrowers with FICO credit scores of less than 580 as opposed to the 3.5 percent required from those with higher scores. Moreover, the agency has eliminated its seller-assisted down payment program that allowed sellers to kick back the down payment to homebuyers. “Given the environment, the FHA has made very responsible changes to its underwriting,” Fratantoni said.

FHA Commissioner David Stevens said the agency’s finances are intact, including the fact that its primary reserve fund is at $32 billion, its highest level ever. However, the agency’s secondary reserve fund has fallen below its mandated level. To help boost its secondary reserve, FHA has recently requested that Congress allow it to increase the monthly fee it charges borrowers to insure loans.

The Federal Reserve has raised an interest rate it charges banks for emergency loans, thus beginning the process to wean the banking industry from government assistance while simultaneously trying to convince the public that the move does not represent an imminent tightening of credit.

On Feb. 19, the Fed officially increased the discount rate charged to banks for direct loans by a quarter point to 0.75 percent.

“(This change is) intended as a further normalization of the Federal Reserve’s lending facilities,” the central bank said in a Feb. 18 news release. “The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy.”

Despite the Fed’s reassurances, stock futures and bond prices fell, and the dollar rose against the euro as economists saw the central bank’s move as a “shot across the bow,” according to a Feb. 19 story in The Wall Street Journal.

With the Fed’s announcement, the gap between the fed-funds rate – which as a Fed-influenced rate dictating what banks charge each other on overnight loans serves as one of the central bank’s main policy tools – and the discount rate will now be a half percentage point, up from a quarter percentage point.

Before the crisis, the discount rate was a full percentage point above the fed-funds rate, a penalty meant to discourage banks from using it except in extreme conditions. In the early stages of the financial crisis in August 2007, the Fed had greatly reduced the gap between the two rates to encourage banks to borrow, according to the Journal.

But now, with financial institutions’ reliance on Fed credit waning as market liquidity continues to improve, the Fed felt the time was right to act. Fed governor Elizabeth Duke justified her agency’s policy changes in remarks she delivered on Feb. 18.

“I’d emphasize that the changes are simply a reversal of the spread reduction we made to combat stigma,” Duke said. “And like the closure of a number of extraordinary credit programs earlier this month, represent further normalization of the Federal Reserve’s lendin

In the midst of uncertainty over congressional efforts to compromise on financial industry reforms, three of the federal agencies that currently oversee the financial sector are soon to be without permanent leaders.

The Federal Housing Finance Agency, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision are expected to have vacant director positions open by August. In addition, Federal Deposit Insurance Corp. Chairwoman Sheila Bair is expected to step aside when her term expires in June 2011. With so many unfilled positions looming, the future of financial reforms is difficult to predict.

According to a Feb. 12 story in American Banker, the lack of financial agency leadership at a time when regulators are under intense pressure to toughen oversight of markets could have a cost, especially in regard to the FHFA. Current FHFA Acting Director Edward DeMarco took over on a temporary basis, and his potential departure could complicate efforts to regulate Fannie Mae and Freddie Mac as the government-sponsored enterprises face growing pressure for stricter oversight. Regulatory reform also clouds the FHFA’s future, as Congress needs to determine how it wants to handle Fannie and Freddie before the agency’s top position can be filled, according to American Banker.

And then there’s the FDIC. Bair, a Republican, is expected to move aside once her term expires, despite belief from many in the industry that the Obama administration could seek to retain her. As related in the American Banker story, Bair has made allies on both sides of the aisle, and it’s unclear who would succeed her next summer – though FDIC Vice Chairman Martin Gruenberg has been mentioned as a successor.

Finding someone to replace DeMarco could be much more complex. With the futures of Fannie and Freddie in limbo, taking over the FHFA becomes less appealing. Candidates might not flock to the job because it is uncertain whether the GSEs will be nationalized, privatized, converted into public utilities or something else entirely, noted American Banker.

Even though uncertainty persists, one thing is clear: “The day-to-day stuff will go on,” Brian Gardner, an analyst at KBW Inc, told American Banker. “But when you’re trying to look at the bigger picture, (lack of financial agency leadership) certainly doesn’t help.”