Tuesday, May 19, 2009

NAR Adopts Policy to Regulate AMCs

UPDATED - May 23, 2009 (scroll to bottom)

From the National Association of REALTORS Appraisal Insight blog:

NAR Adopts Policy to Regulate AMCs at Midyear Legislative Meetings

On Saturday, May 16, 2009, the NAR Board of Directors adopted policy that supports the regulation of appraisal management companies, primarily through FIRREA and the existing appraisal regulatory infrastructure. NAR President Charles McMillan hinted at such a policy in March when he testified before the House Financial Services Subcommittee on appraiser independence.
Regretfully, I missed this meeting of the National Association of Realtors Board of Directors and the meeting of the NAR Appraisal Committee. It was the first meeting I missed in several years. However, it looks like they did just FINE in my absence ;-)

Their rationale for adopting the policy is right on the money:

NAR's Rationale: Appraisal management companies are not currently regulated at the federal level and regulation at the state level varies. Regulation would ensure that AMCs operate within the same basic guidelines and standards as independent appraisers. Further, this allows AMCs to be regulated within the existing appraisal regulatory structure, which avoids the need to create additional layers of government bureaucracy.
Read the post at the NAR Appraisal Insights Blog right HERE

UPDATE - May 23, 2009

Make sure you take a look at the comments. This one caught my eye:
As a producing manager of a mortgage bank who is using an AMC...I could scream. I don't have issue with HVCC. For way too long loan officer and realtor alike have had too much influence over the process which have removed the value of a "disinterested" third party. Secondly appraisers have been allowed to be sloppy and lazy with there work and banks have accepted it with no recourse. I recently received a 1004 appraisal for a refinance that was done by the same appraisal company that did the purchase and the appraiser never even went to the house. They used the interior photos from the purchase. Guess what this is not and isolated case. I just happened to catch this one because I had been in the home the week before and I noticed the paint color wasn't right in the appraisal photos. We regularly get told the appraiser never showed up or was only here for 10 minutes

Look...I hate...HATE AMCs. As a lender I would rather see a black hole system for conventioal and FHA like we have been using for years with VA. At least the appraisers are getting paid and we know it works 95% of the time without issues.

A tip of the hat to the NAR Appraisal Committee (and the Chicago and Washington, D.C. staff!), the NAR Board of Directors and NAR President, Charles McMillan.