BRAIN C. COESTER'S BLOG
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Archive for October, 2013

Of Course Our Reviews Are Offshore

October 1st, 2013

When BofA announced sending appraisal reviews offshore I had begun to receive several e-mails expressing agitation and dismay. My initial response was I thought they already had reviews done offshore for quite a while, I’m not surprised at all! Offshore is actually simple, better, faster, and cheaper. Though it may sound bad, anti-american and anti-job market expansion, it’s still true. However, it really depends on the way you look at better and faster. Is it better versus a licensed or certified appraiser looking at it? Certainly not; however, most companies do not have all appraisers looking at files, they typically have entry level hourly employees going through a checklist. In that case, if the file doesn’t meet a certain percentage of requirements it is given to a more qualified person and, perhaps, eventually to an appraiser.

The majority of companies that operate in a desk office environment will use some type of third party that is located overseas. The reality is that this helps the US more than it hurts. The United States has a global economy thus more jobs for the world means more jobs for everyone. Each country has a specific skill set. Germans make exceptional surgical knives, the Japanese are particularly skilled when it comes to electronics, China manufactures most of the products in the US, and in India and Pakistan companies are very good at managing data and attention to detail. And the United States? Creativity and innovation. The top innovative companies in the world are mostly based in the United States and there’s a reason. The novel The World is Flat outlines this concept and how it occurs by design, not chance, in great detail.

When it comes to reviewing appraisals, data entry and other types of accounting or administrative jobs, the question is why should we restrict it to the US? It is possible to get these tasks done better, faster and cheaper offshore and most of the mortgage industry is already doing this. Companies like Infinity Data, Flatworld, Brickwork and others work with major banks, lenders and financial institutions in the US and handle everything from IPO’s, financial analysis. Did you know 55% of the MRI’s done in the US are reviewed by a doctor off shore before they come back to the US?

I know some appraisal management companies say all reviews are done in house and by an appraiser. That is highly unlikely if said company does over 5,000 appraisals a month. They may have reviewers on staff that are licensed or certified appraisers that handle more complex files but it’s simply not possible with the price of a licensed appraiser to review every file. Not only is this not possible but it’s also a waste of money. Most appraisers do an excellent job and should not have to have their work questioned other than a look over to make sure it matches what was ordered.

In all honesty, ladies and gentleman, why must your files be reviewed in the first place? To say that you “hate when they outsource the reviews” is like saying you hate when employees from another country, that don’t know anything about appraisals, catch your mistakes and tell you to make comments on guidelines widely published that you should already know. The reality is that an appraisal in the mortgage industry should be delivered to the client meeting all the guidelines required by the lender and the industry. To not do this is working against your client. Now we all know there will be exceptions,yet we have enough data on appraisals and appraisers to know that the exceptions are few and far between and there are a lot of simple mistakes that can be made. Therefore, having reviews offshore makes sense as only things that can be easily checked against a checklist are being looked over.

Thank you –
B.Coester