401(k)2012
Since the 1960’s, the Appraisal Management Company (AMC) has been a growing presence in the lending realm of the Real Estate universe. The AMC’s role is to administer the process in ordering, tracking, quality control and delivery of appraisal reports. AMCs do not conduct the actual appraisal.
In 2009, after the freewheeling days that featured lenders ‘suggesting’ that the appraiser come to a favorable property value, the Home Valuation code of Conduct (HVCC) rules were developed by Fannie Mae, Freddie Mac, the Federal Housing Finance Agency and New York Attorney General Andrew Cuomo. The HVCC’s purpose was to isolate entities with a financial interest in a mortgage loan transaction from the appraisal selection and retention process.
The HVCC is no longer in force, but it influenced the rules that are found in The Dodd-Frank Wall Street Reform and Consumer Protection Act. While AMC usage by lenders has increased much since the rules came into play, lenders are not required to use an AMC. The states’ AMC legislation must cover the minimum federal requirements and the states are still free to add their own rules and regulations to the minimum federal requirements.
Here are a few selected state requirements that AMCs must comply with: they must register with a state and be supervised by that state’s appraisal certifying and licensing agency. This must happen in each state they do business in that requires it. The AMC appraisers must comply with the Uniform Standards of Professional Appraisal Practice (USPAP). The AMC must verify that the appraiser is licensed or certified in order to do federally related transactions.
AMC’s select appraisers based on parameters such as proximity to the subject property, the local experience, education, license type, and appropriate MLS access, quality of past appraisals, timeliness and whether the appraiser has the overall knowledge or understanding to do the appraisal.
AMCs are only as good as the appraisers they hire for the job and their support staff. Some AMCs don’t have any appraisers on their appraisal review team and others have a mix of non-appraiser and appraisers on staff. When considering an AMC, you should ask about their appraisal review team and what quality control methods are in place; in addition to inquiring about turn times.
PEMCO Limited has a highly experienced team of reviewers providing 100% review, resulting in a clean appraisal. PEMCO Limited’s highly qualified, licensed appraiser panel is accustomed to HUD’s strict timelines and as a result, it’s second nature for them to provide a report in 3 days. PEMCO Limited and our appraiser team is ready to provide the lender and buyer with a fast and accurate appraisal to help make the process smoother.
Learn more about PEMCO’s Valuations & AMC Services
Resources:
National Association of Realtors. “NAR Issue Brief: Appraisal Management Company” 03 April 2014. Q&Ahttp://www.realtor.org/sites/default/files/publications/2013/appraisal-management-co-q-and-a-2013-07-02.pdf
Cornell University Law School. “2 U.S. Code § 3353 – Appraisal Management Company Minimum Requirements” 03 April 2014. http://www.law.cornell.edu/uscode/text/12/3353