Why Appraisal Management Company Requirements Vary by State

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  • Why Appraisal Management Company Requirements Vary by State

    Appraisal management company requirements are different in every U.S. state. That’s why choosing a nationwide AMC means looking for more than just a proven track record of turning around appraisals quickly. The company needs to show an understanding of the rules and regulations governing the appraisal process in each of the fifty states.

    To date, 39 states require appraisal management companies to be licensed and registered, and 45 states have enacted unique legislation regulating the appraisal process. Hiring an appraisal management company that isn’t fully compliant with these varying and nuanced regulations will only slow down the loan process for lenders and, ultimately, their customers.

    This is why turning to Class Appraisal is key to streamlining the process. We’re one of a small percentage of appraisal management companies nationwide that have contractors ready to work in all fifty states.

    “Our industry is ever-changing,” says Class Appraisal Chief Compliance Officer John Hamameh. His role is dedicated to ensuring our company and contractors throughout the country are kept abreast of any regulation changes. “It’s important that everybody is aware of the changes in regards to compliance.”

    What National Lenders Need to Know about Appraisal Management Company Requirements

    Following the housing crisis, a federal statute called the Home Valuation Code of Conduct was created to guide the appraisal process. According to appraisers.org, it aims to generate greater independence between appraisers and lenders in order to ensure a property was given an accurate, unbiased value assessment.

    The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in 2010, took things further by establishing minimum regulatory standards for AMCs. Among the many changes were requirements that every appraisal management company registers with the federal government, that states verify only state-certified appraisers are used for federally backed projects, and that appraisals comply with trade standards.

    It also mandated that states create a board to regulate AMCs and authorized them to create further regulations. While some of the regulations established by the boards are redundant, they also create regulations specific to each state.

    For example, appraisal management company requirements in some states instruct AMCs to pay appraisers within 30 to 60 days of the appraisal taking place. Others, like Alabama, command appraisal management companies to require all their appraisers to have “geographic competency to perform an appraisal assignment.”

    According to a July 2015 article in Mortgage Compliance Magazine, some states require fingerprints and background checks. Missing a step slows down the lending process or, at worst, could result in penalties. This is why national lenders need an AMC with experience working on a national scale.

    “When you use an AMC,” Mercury Network President Jennifer Miller writes in the article, “part of your due diligence must be a current understanding of these state regulations.”

    The Advantage of Working With a Nationwide AMC

    This is where Class Appraisal comes in as one of the few AMCs registered or exempt to work in all fifty states. We work with only the best appraisers in every state, county and street in the country.

    Our process is both quick and careful. Class Appraisal has a 2.3 Collateral Underwriter score and a 98.1 percent satisfaction rate, meaning only 1.9 percent of evaluations have undergone a value dispute. While ensuring we are operating within the regulations of every state, Class Appraisal knows turnaround time is important. Our nationwide average return time is 4.5 days.

    We maintain these standards thanks to the stringent oversight of our chief compliance officer and chief appraiser. We also partner with the most competent real estate appraisers, who we ensure are paid within 24 hours of their service. In return, they prioritize our orders. That’s how we provide outstanding service to many of the top lenders in the country.

    Are you a national lender looking for an appraisal management company with the competency to work in every single state? Give us a call at (866) 333-8311 or send an email to info@classvaluation.com to speak with a member of our team.

    – Brianna Valleskey

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