RCA
Elite Member
- Joined
- Jun 27, 2017
- Professional Status
- Certified General Appraiser
- State
- California
Nowadays we can ask and LLM like Claude all kinds of questions in regard to such issues. Ad Infinitum.
"GSEs (Government-Sponsored Enterprises) like Fannie Mae and Freddie Mac have implemented guidelines that, while not explicitly requiring AMCs, often make them a practical choice for lenders. Here's how:
- Appraiser Independence Requirements:GSEs mandate strict appraiser independence to prevent conflicts of interest. AMCs act as intermediaries, helping lenders comply with these requirements by managing the selection and assignment of appraisers.
- Quality Control:GSEs require lenders to have robust quality control processes for appraisals. AMCs typically have established quality control procedures, which can help lenders meet these standards more easily.
- Vendor Management:GSEs expect lenders to properly manage their appraisal vendors. AMCs handle this aspect, maintaining pools of qualified appraisers and managing their performance.
- Compliance Tracking:AMCs often have systems in place to track appraiser licensing, certification, and continuing education, helping lenders ensure they're using properly qualified appraisers as required by GSE guidelines.
- Technology Integration:Many AMCs offer technology platforms that integrate with GSE systems, streamlining the appraisal submission and review process.
- Geographical Coverage:For lenders operating across multiple regions, AMCs can provide access to qualified appraisers in various locations, helping meet GSE requirements for local market knowledge.
- Uniform Appraisal Dataset (UAD) Compliance:GSEs require appraisals to be submitted in the UAD format. Many AMCs have tools to ensure appraisals meet these standards before submission.
- Risk Mitigation:By using AMCs, lenders can potentially reduce their exposure to risks associated with non-compliance, which aligns with GSE expectations for risk management.
While these factors make AMCs attractive,that lenders can still comply with GSE guidelines without using AMCs if they have robust internal systems and controls in place. However, for many lenders, especially smaller ones or those without specialized appraisal departments, AMCs offer a more efficient way to meet GSE requirements.
Would you like me to expand on any of these points or discuss other aspects of GSE guidelines related to appraisals?"
========
So, in other words, the Dodd-Frank Act coupled with GSE guidelines, indirectly inject AMCs into the process of assigning and paying appraisers. And they do this without any control of the process of compensating appraisers other than the so-called "reasonable fee" requirement - that can be manipulated downward over time. We know what AMCs do, many appraisers have worked directly for them. It has also long since been the case that residential appraisers can barely make a living with such a setup. So, it is time to get rid of them. You can replace all AMCs with the GSEs - and we would have a better situation. So, the lenders go to the GSEs for the appraisal, the GSE hires the appraiser, and IT deals with the end-result.
