OC Real Estate Appraisal Blog

AMCs becoming direct lenders | May 12, 2010

The Home Value Code of Conduct (HVCC) created Appraisal Management Companies (AMCs) to separate the lender or mortgage broker from the appraiser so that they could not pressuer the appraiser for higher values, creating bad loans, without adequate equity. The HVCC has damaged real estate sales and lending, due to creating poor quality appraisals. Typical home appraisal report fees were $450, when ordered directly by the lender. Currently the lender hires an AMC to order the appraisal report at a typical fee of $650 and paying the appraiser $200 for the same work. This low payment fee only attracts low quality or new appraisers, not allowing enough time to due the appraisal properly. AMCs mostly order appraisal assignments outside of the appraisers area of knowledge and the appraiser does not have access to sales data for that area. This lack of knowledge directly effects the appraised value, typically lower then the market value. All licensed appraisers work under the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP requires all appraisers to be knowledgeable of the areas that they are appraising and to have access to sales data.

The Home Value Code of Conduct (HVCC) needs to be thrown out.

http://www.dcnassoc.com - More info on Southern California Real Estate Appraisals