Ever since the official institution of the Home Valuation Code of Conduct (HVCC) on May 1, 2009, it has become increasingly urgent for lenders, and for similar reasons appraisers, to find appraisal management companies (AMCs) that are compliant with the “non-influence” process. It has become almost commonplace for an HVCC non-influence AMC to provide a certificate with every appraisal order to signify its adherence to the aforementioned policy.
One of the portions of the HVCC that has helped usher in the need for non-influence from AMCs is found in section I, letter “B,” which states that “No employee, director, officer, or agent of the lender, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner…” The HVCC continues on to list various statutes from which many non-influence policies derive.
Some of the basic clauses found within AMCs’ certificates of non-influence are as follows:
- A declaration to prohibit any communications between the lender/broker and the appraiser or any attempts from the lender/broker to attain any sort of loan information from the real estate owner and/or borrower
- An avowal that both the appraiser and loan institution/loan officer are uninformed of each other’s identities during the entire transaction or until the finalized appraisal is delivered
- An acknowledgment that the selected appraiser for any particular order was done so at the sole discretion of the AMC using its own network list of available appraisers (which have completed various stages of qualifications)
- An assurance that the AMC did not persuade, influence, or encourage the appraiser in any way, including an estimation of a proposed loan amount
- A guarantee that the lender/broker/client that is identified on the appraisal report actually submitted the order to the AMC directly or via the AMC’s web-based appraisal management system
Of course, each appraisal management company will vary with their policies and procedures, but you will want to network and do business with a company that has dedication towards being an HVCC non-influence AMC for all appraisal transactions.
Generally, you will be able to locate their policies highlighted on the website’s home page or in their about us section. If you cannot determine if an AMC engages in a non-influence policy, it is best to contact them directly and inquire or find an alternative choice.
Eamon Arnett is writer and CEO of 48HN.com (http://www.48hn.com), a website featuring HVCC Non Influence Appraisal Management Company.
[tags]non influence appraisal management company[/tags]
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