Why an AMC ?
Why use an Appraisal Management Company (AMC)?
There are two way lenders can comply with Federal Law:
1Order Appraisals through an AMC, with the minimal cost passed on to the borrower.
2Create an in-house appraisal/evaluation management and review department at the lender’s expense. It’s not just separating the appraisal/evaluation ordering from the loan production staff, it’s also reviewing the appraisal and evaluation to ensure it meets USPAP and Appraisal Standards.
Why use an Appraisal Management Company (AMC) before the Interagency Appraisal Guidelines (IAG)?
There were several good reasons why lenders used AMCs prior to The Interagency Appraisal and Evaluation Guidelines (usually national and larger regional banks):
1AMCs reduce the opportunity for fraud between lenders, sales people, and the appraiser, thus reducing losses due to overvalued security.
2Establishes a clear separation between sales teams and the appraiser, which is extremely important to auditors and regulators
3Saving the lender money
- Banks cannot compete with the efficiencies that an appraisal management company offers.
- The appraisal management company fee is part of the appraisal fee and is passed on to consumers at closing, not to the bank.
4RESPA – It’s very difficult to define and recover the cost of an in-house management department as a closing expense that is compliant with RESPA. In-house costs are at the bank’s expense, directly affecting your bottom line profit.
5Frees bank management for other more productive responsibilities.
6Most appraisal management companies have stringent quality control programs that increase the overall quality of the appraisal report.
What does an Appraisal Management Company do?
- Vet the appraiser panel, to ensure quality and compliance
- Select the most qualified appraiser for each job
- Negotiate the appraisers’ fees
- Place the order and monitor progress
- QC and Audit the appraisal reports
- Supervise corrections
- Deliver the reports
- Field any client questions
- Pay the appraiser
- Securely store the appraisal report for five years
How much will this cost the lender?
Appraisal Management Solutions = NO COST to your bank. Very minimal costs are paid by the customer at closing
In-house Appraisal Management = Bank’s Expense, Lowering Profitability.
How will the the lender benefit?
Instead of dealing with many different appraisers, you have only one contact that:
- Communicates effectively. We ALWAYS answer the phone when you call
- Has in-depth knowledge of your requirements and the appraisers’ challenges
- Is motivated to overcome obstacles and meet challenges
- Quality – Appraisals and evaluations are audited by licensed appraisers to ensure USPAP and quality compliance
Examination teams directed to Review
Community bank examination teams have been directed to review the appraisal to ensure USPAP and Appraisal Standards compliance. Typically, 80% of a lenders’ appraisals will fail this test, resulting in a safety and soundness issue.
Licensed appraisers are being added to FDIC examination teams in many parts of the company. It’s not difficult to know the reason why!
Why Appraisal Management Solutions?
- We create a partnership with your roster of appraisers
- We have 10 years of experience in the appraisal management industry
- The process can be run in conjunction with your existing procedures until a certain comfort level has been reached.
- We WILL save you money!
- We earn your loyalty, one appraisal at a time