The Regulatory Role:
An Appraisal Management Company (AMC) works with lenders and appraisers to facilitate the ordering, tracking, quality control and delivery of appraisal reports. In 2009, New York Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac, with support from the Federal Housing Finance Agency, developed a set of appraisal rules called the Home Valuation Code of Conduct (HVCC). The rules were developed to isolate parties with a financial interest in a mortgage loan transaction from appraiser selection and retention. While no longer in force, HVCC influenced the Appraiser Independence rules now found in The Dodd-Frank Wall Street Reform and Consumer Protection Act. As a result, AMCs have proliferated as many lenders use their services in order to provide strict adherence to Dodd-Frank, Truth in Lending and Interagency Guidelines.
The AMC’s Role in the Appraisal Process:
The AMC performs the administrative functions involved in the ordering, completion, and delivery of an appraisal report. Each AMC establishes processes to complete and/or enhance these functions based on the AMC’s business model and corresponding Federal and State regulatory requirements. Appraisal management companies do not perform appraisals.
An AMC assigns an appraisal using a wide range of criteria. Criteria may or may not include local experience and proximity to the subject property, license level, education, access to the appropriate MLS, appraisal quality history, timeline performance and capacity at the time of order assignment.
The AMC places the order with the appraiser, confirms the borrower’s contact information, the lender’s special instructions, and the due date. During the appraisal process, the AMC may communicate with the appraiser and request updates on possible issues or discrepancies. After an appraiser completes an assignment, the appraisal is sent securely to the AMC. Dodd-Frank and most state regulations require AMC s to have a system in place to assess appraisal quality. After this process, the appraisal is available to the lender/Client.
AppraisalMark has developed screening and on-going assessment processes and benchmarks to measure and track performance in order to monitor an appraiser’s eligibility for continued appraisal assignments. The include on-time performance, communication, number of revisions required and various additional criteria.