New appraisal regulations under fire
2009/02/13, 7:54 pm
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New Appraisal Regulations Under Fire Beginning May 1, the responsibility for managing home appraisals will move to a middleman, known as appraisal management companies or AMCs.

Under new federal regulations, mortgage brokers and loan officers can’t directly order appraisals. Instead, they are expected to go through third-party AMCs, which are supposed to prevent them from pressuring appraisers.

But critics of the new plan say nobody is watching the AMCs.

“[The new rules] have transferred the [improper influence] problem to these appraisal management companies, which are not regulated by anybody,” says Bill Garber, director of government affairs at the Appraisal Institute, a nonprofit trade group.

“[The marketplace is] still vulnerable to appraiser pressure because the incentives are still there to get deals done and collect the fees,” says Susan M. Wachter, professor of real estate at the University of Pennsylvania’s Wharton School.

Federal housing officials, who helped write the new laws, say they will hold AMCs accountable.

James B. Lockhart, director of the Federal Housing Finance Agency, which oversees Fannie and Freddie, says, “If [AMCs] are applying undue pressure, that would be a violation of Fannie and Freddie rules, and we would take action.”

Source: Business Week, Chad Terhune (02/16/09)


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[…] Original post by mhanna43 […]

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How do you locate an appraisal management company? Are they assigned a territory?

Comment by Norma Stevens

Generally appraisers work in a certain geographic region with a certain territory

Comment by mhanna43

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