Coester Appraisal Group, a nationwide appraisal management company (AMC) headquartered in Rockville, Maryland, recently announced that its CEO Brian Coester has been commissioned by AllRegs to develop instruction

manuals, video tutorials, and classroom training programs to educate lenders on how to protect themselves against repurchase requests that are based on erroneous assessments of the loan file’s appraisal.

Repurchase requests, also known as “buyback letters,” are given to lenders, correspondents, brokers, or other loan

originators by purchasers – such the GSEs, investors, or other lenders – when a loan is found to be faulty, noncompliant, or otherwise substandard.

According to Coester, discrepancies in appraisals account for roughly 15 percent of all repurchase requests. Once a buyback letter is received, the recipient is under obligation to repurchase the loan in question – often hundreds of thousands of dollars, if not more – unless it can prove that it is not responsible for the discrepancy.

Coester, who has become well-versed in rebutting repurchase requests that are wrongly based on appraisal discrepancies, will be addressing the specific steps that the recipient of a buyback letter can take to determine the validity of the claims, and successfully refute them if inaccurate.

“Repurchase requests that are based on faulty or erroneous appraisals are often built on misunderstandings,” Coester said. “But because many lenders don’t know how to appropriately respond to the request, they end up repurchasing the loan, even though they’re not at fault. As with any process, there are certain processes and procedures that greatly enhance a lender’s chance of successfully refuting the request.”