If you are a lender looking for an accurate valuation of a potentially mortgaged property,
Appraisal Management Companies (AMC) might just be your best allies. Hiring a reputable independent real estate appraisal company will secure a detailed appraisal report written by a state-licensed or state-qualified appraiser chosen by the AMC.
No matter how experienced a lender or mortgage broker you are, the US government developed appraiser independence guidelines that stop you from choosing an appraiser on your own. The goal is to limit the influence lenders have on appraisers.
Namely, the homeowners, loan officers, and mortgage brokers alike all have a financial interest in the transaction. As a result, there is a certain risk that any of them will try to influence the appraiser. If that happens, the appraiser might assign a higher value to the property.
The Appraisal Management Company is thus set to choose an independent appraiser. Ideally, it should be the one with local knowledge of the market.
Therefore, when you need the appraiser for the property you plan to lend or borrow funds, you actually need to browse the Appraisal Management Company list. If, on the other hand, you want to become an AMC employee, there are certain requirements you need to meet and two important steps to follow. We will discuss it later on.
The bottom line is: If you want to find out all there is to know about the AMCs, the easiest way is to stay here and read this guide to the end.
What Is An Appraisal Management Company (AMC)? What Services Does It Provide?
An Appraisal Management Company, or AMC, is, as we have already mentioned, an independent entity that provides mortgage lenders with residential real estate valuation services. These companies have an administrative function in the appraisal process as well as two main tasks:
- Selecting an appraiser
- Delivering the appraiser report to the lender
There are individual appraisers hired by the AMC who perform the actual property valuation services. They have to be either state-licensed or state-qualified in order to meet the requirements and requests of lending institutions.
The assigned appraisers are not given any info regarding the property that they need to evaluate. They do not have any contact with the lending institutions either. Therefore, they can provide a truly accurate appraisal report for the given property.
There is one more requirement, though – assessment provided by the appraiser has to meet the Uniform Standards of Professional Appraisal Practice (USPAP) guidelines. In case of any inconsistencies or problems, the AMC will provide legal assistance too.
The Short History of Appraisal Management Companies (AMC)
- Appraisal Management Companies are not a modern invention; they have been around for half a century. Even though they immediately became an important part of the real estate landscape, their numbers remained limited for quite a long time.
- Things changed after the great financial crisis of 2007 to 2008. In 2009, the Home Valuation Code of Conduct (HVCC) appraisal guidelines had been established and laid the foundation for the appraisers’ independence. It was all thanks to the joint efforts of the Federal Housing Finance Agency (FHFA), the New York Attorney General, and the government-sponsored enterprises Freddie Mac and Fannie Mae.
- Soon after, the Dodd-Frank Wall Street Reform and Consumer Protection Act followed as well as the Truth in Lending Act. As a result, the lenders had to comply with federal statutes, and the number of AMCs had grown.
- Thanks to all these federal regulations, HVCC included, we can now be sure that direct contact between lenders and appraisers is limited. The goal has been achieved – now there is an effective oversight between the lending institutions and appraisers.
- Before these regulations were established, lenders could influence the appraisers and inflate property values. It is believed that this problem greatly contributed to the housing crisis. The US federal government made such issues a thing of the past.
Appraisal Management Company List of Requirements
As we have established so far, the Appraisal Management Company is there to oversee an appraiser panel in one, two, or more states. That means controlling from 15 to 25 or even more state-certified or state-licensed appraisers.
It is not easy to qualify for registration of an AMC. The company must meet the definition and all the needed requirements. Once registered, the AMC reports to the National Registry of the Appraisal Subcommittee.
What Is An Appraisal Panel?
- An appraisal panel is a network of licensed or certified appraisers. All these appraisers need to be approved by an appraisal management company. The role of these independent contractors is to perform appraisals for the APC.
Who Is an Appraiser?
- An Appraiser is, as we have already said, an independent contractor. He or she is treated as such by the APC for federal income tax purposes.
What Does An Appraiser Panel Include?
- It includes the following:
- Appraisers employed by the appraisal management company for performing appraisals in covered transactions or for secondary mortgage market participants connected with covered transactions.
- A list of appraisers taken into consideration by the AMC for performing future appraisal assignments in covered transactions
Who Is Required To Register?
- All the individuals listed as authorized representatives must register. If someone has the authority to direct the AMC’s management or policies, he or she has to be registered. The authority can be obtained by contract, through ownership, or otherwise.
- This means that if AMC is a corporation, all directors and officers have to register. If it is a partnership, all partners have to register as well.
- In case that the appraisal management company is a limited liability company, all its managers have to be registered. If the AMC is a different entity than these listed here, all its members still have to register.
How To Register?
- We have defined all the authorized representatives eligible to register, so what shall you do if you are on the list?
- If you are an authorized representative according to any of the criteria defined in the previous section, you will have to go through the following steps in order to register:
- Complete the Background Questionnaire
- Submit electronic fingerprints
- Both of these steps are obligatory and serve to determine if you are eligible. Your application for the Appraisal Management Company will not be approved until the filled background questionnaire, and fingerprint results are sent to the Real Estate Appraisal Board in your state. When the board receives the questionnaire and electronic fingerprints, they will review your application and hopefully approve it.
How To Submit Fingerprints?
- You will have to find a vendor authorized by the department. There will probably be multiple locations available so that you can choose the nearest one. There will be a fee as well that the applicant has to pay to the approved vendor, so make sure you get all the details sorted beforehand.
How To Find A List Of Appraisal Management Companies (AMCs) In Your State?
The first step is to turn to an appraisal state agency. They have to provide you with a roster of all of the appraisal management companies in your state.
If you are an appraiser and you are not satisfied with your workload, you can turn to AMCs in your area and try to get on their rosters. It will most probably get you more appraisal assignments. So, do not waste any time; contact AMCs in your area as soon as possible!
What Do You Need To Know Before You Contact AMCs?
- Before you start contacting the AMCs in your state, prepare the following info:
- Your resume (make sure it lists all the qualifications)
- Copy of work samples
- Copy of your license
- List of all the types of properties you have served ( make sure you include a specialty niche too)
- Service area
- Fee required
How To Find The Appraisal Management Company List For Your Area Of Interest?
- Follow these three simple steps:
- Choose a state
- Locate the state’s appraisal regulation board website
- Browse the state board’s website or contact them for a list of AMCs available in your area
Extra Tip: If you have trouble finding state contact information, go to the Appraisal Subcommittee website first.