WTF is an Appraisal Management Company (AMC)?
“Please reach out to the appraiser and tell them I’ll be late meeting them at the house”
Every Mortgage Loan Originator (MLO) hears this. First comes that sinking feeling. MLOs pride themselves on being the solution. In this case we’re stuck. We cannot reach out out to the appraiser directly.
Why?
Good question. Back before the Appraisal Independence Rule, lenders, and MLOs, hired a specific appraiser or appraisal company to perform the valuation of a property. In the course of doing business, they formed relationships. Sounds nice, right?
Not so much. MLOs were out there pushing appraisers to value a property at a level high enough to support their mortgage transaction and collect their commission. Like many things during the early 2000s housing boom, it was taken too far.
In 2009, HUD instituted the Appraisal Independence Rule, which became a wider regulation when Dodd Frank was passed after the Great Financial Crisis.
So, now we have Appraisal Management Companies.
Well, what do they do?
An AMC maintains a roster of qualified appraisers. They receive the appraisal request from a lender and assign an appraiser. The appraiser does their job and submits the appraisal report back to the AMC…
