30 Dec The Role Of Appraisal Management Companies

Appraisal management companies serve a prominent role in the real estate world. Appraisal management companies have been rising as a result of recent financial changes. These companies now exist as an integral part of the lending system for those who require property valuations as a part of their loan process. They do not actually complete appraisals themselves; rather they manage the process of finding an appraiser to perform the valuation on your property while keeping the lending institution compliant with Appraiser Independence Requirements or A.I.R. as it is better known in the industry. 

Many banks and mortgage lenders utilize these services because it streamlines the process all while keeping the lender compliant. This helps save time and money. As a national appraisal management company, our team at Arivs has everything to offer from a national standpoint, with a more localized approach. Let’s further evaluate the impact of appraisal management companies and why they can serve as tangible assets.

The Role Of Appraisal Management Companies Defined

AMC’s or appraisal management companies are independent entities for which mortgage lenders order services like real estate valuation through. Lenders depend on their knowledge and expertise so that they can make informed decisions when extending loans to homebuyers. Management companies will fulfill administrative duties throughout the appraisal process. This includes selecting an appraiser, providing quality reviews of the appraiser’s work,  delivering the appraisal report to a lender, and so forth. Individual appraisers that work under AMC’s will provide the property valuation services. When underwriter conditions are presented on an appraiser’s report or if a reconsideration of value on said report is deemed necessary, the AMC will argue the lender’s case to the appraiser. This is all geared towards providing the borrower the highest quality appraisal report possible. 

Understanding The Impact

AMC’s are not new, however,  their bandwidth was limited until the financial crisis occurred in 2008. Following this in 2009, Freddie Mac, Fannie Mae, and others established the Federal Housing Finance Agency (FHFA), which established the Home Valuation Code Of Conduct (HVCC) appraisal guidelines. The laws that erupted from these actions resulted in a sharp rise in the use and number of AMCs. The HVCC and federal regulation was seeking to limit the amount of direct contact that lenders were having with appraisers. The federal government was creating independence requirements (A.I.R.) for the appraisers which prevented lenders from enticing appraisers to inflate property values, which was a big issue that contributed to the housing crisis.

With the help from a national appraisal management company, you will not need to run through mortgage brokers, loan officers, or homeowners, for lending/borrowing funds. These former parties have a vested interest in the transactions, there is always a risk they might attempt to influence an appraiser to assign high property values, compared to what the market can actually support. 

Requirements & Credentials

In order to become certified, these professionals need to maintain a variety of state-licensed and state-qualified appraisers to meet requests from the institutions who are lending. An appraiser will then provide an appraisal report for the property. AMC appraisers are not given any information about the property, beforehand. Their assessments must meet the Uniform Standards of Professional Appraisal Practice (USPAP) guidelines. Should any issues arise, AMC’s can legally assist at any point.

In addition to this, AMC’s will conduct the following:

• Working as a median between the appraisers and lenders to assist in the flow of communication and for when issues come up.
• Providing quality control by enforcing compliance amongst the appraisers. They will see to it that the assessments made are adhering to the regulations. The opinion of the appraiser should align with the industry standards, which in turn is based on facts with no outside influences. 
• When the appraisals are complete, AMCs will deliver the report to the lenders and collect the appropriate fees. After the payment is received, they will distribute amounts to the appraisers.

Getting Started With A National Appraisal Management Company

If you are interested in learning more about these comprehensive solutions, look no further than our team at Arivs. Contact us  today to learn more!