Understanding the changing dynamics of the appraisal business can be challenging, especially when enormous regulation and tighter lending standards have become a driving force in the “new” world of the appraisal management industry.
Regulatory pressures are fundamentally impacting the way financial institutions manage the appraisal function. Take for instance the recent ruling implemented by the OCC, Board, FDIC, NCUA, Bureau and FHFA (collectively the “Agencies”) requiring that the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) be applied by participating states in the registration and supervision of appraisal management companies (AMCs). The AMC minimum requirements in the final rule apply to states that elect to register and supervise AMCs.
Participating states will require AMCs to:
►Register with, and be subject to, supervision by the state appraiser certifying and licensing agency in the state or states in which such company operates.
►Verify that only state-certified or state-licensed appraisers are used for federally-related transactions.
►Require that appraisals comply with the Uniform Standards of Professional Appraisal Practice (USPAP).
►Require that appraisals are conducted in accordance with the statutory appraisal independence standards under the Truth-in-Lending Act (TILA) [15 U.S.C. 1639e] and implementing regulations.
The rule establishes the foundation for a National AMC Registry and outlines certain minimum requirements each state must meet, including a variety of registry requirements and oversight controls. Remaining states not participating might follow suit in order to keep business processes for mortgages flowing smoothly.
Word on the street is that the ASC Advisory Council is currently working on technology and procedures that will enable automated weekly updates to the national registry for appraisers. This valuable tool, once realized, will no doubt aid in the vetting process and greatly improve in the monitoring of the appraisal panel by providing more accurate, detailed information while saving time in the research and verification process.
Leaders in the AMC universe have invested a great deal of time and money in sustaining a compliance task force who actively participate in emerging issues and industry changes. Smart lenders understand the importance of having an expert AMC in the trenches, always monitoring and actively participating in the changes in regulations–not just on the federal level, but state by state, keeping current, alerting its clients to any change that may affect them.
Now more than ever, lenders need to build strong business relationships with AMCs who are leaders in valuation management compliance and quality, who are intimately familiar with each state’s rules and requirements and who apply the strictest standards across the board to remain in compliance with the new regulatory landscape.
Cari Burris is a founding partner of Nationwide Appraisal Network (NAN). She brings more than a decade of AMC expertise to the industry. Cari may be reached by phone at (813) 749-8840 or e-mail at [email protected].
This article originally appeared in the June 2015 print edition of National Mortgage Professional Magazine.