PCV Murcor Knows the Real Estate Valuation Business
Through an ever-changing industry and regulatory environment, we have delivered confidence with every valuation, for nearly four decades. We help mitigate your financial and reputational risk using proven processes designed to withstand even the most rigorous of audits. Uniquely positioning us to provide you unparalleled piece of mind — without missing important deadlines.
Our own Director of Compliance, Jeff Del Rey, represented PCV Murcor as part of an amazing day on Capitol Hill, working with both Senate and Congressional staff to address the changes and challenges affecting [...]
PCV Murcor Attends Annual Meeting with Risk Management Association and Society of Chief Appraisers at the Federal Reserve Bank in Los Angeles PCV Murcor attended the 16th annual joint meeting of the Risk Management [...]
Dawn Haghighi, General Counsel, PCV Murcor, accepting Association of Corporate Counsel's Advocacy Award with Laura Dorman, managing director and associate general counsel at Berkeley Research Group, LLC, creators of the ACC Regulatory Working [...]
Appraisal Management Companies (AMC) have existed since the 1960s and grew in prominence following the global economic downturn in 2008. Post Dodd-Frank (2010), AMCs have played an increasingly important role as third-party service providers in the consumer mortgage process.
AMCs are hired by lenders and/or other financial institutions in a consumer protection role, per Dodd-Frank, to manage an independent and compliant process to determine the price and/or value of a residential real estate. They manage the ordering, tracking, quality control and delivery of valuation reports.
In addition to appraisals, AMCs offer many valuation products and services to lenders and secondary market investors. They are required to maintain strict adherence to federal and state regulation and law in accordance with Dodd-Frank, the Truth in Lending Act and federal Interagency Guidelines.
AMCs support a smooth, timely and responsive mortgage process for consumers and lenders by working with certified appraisers and other real estate professionals across the nation. Among the vital consumer protection role and essential valuation-related functions AMCs fulfill:
- Maintain a qualified panel of licensed appraisers ready to execute lender valuation assignments.
- Ensure appraiser independence by safeguarding against fraud and undue influence in the valuation process.
- Comply with federal and state laws governing valuation products and services.
- Protect public safety via background checks of appraisers before they can be employed or empaneled.
- Provide quality control to ensure the integrity of a supportable, dependable and credible appraisal.
- Help to lower costs associated with borrowing by providing lenders with efficient and cost-effective services.
- Assist state appraiser oversight by mandatory reporting on appraiser violations of the USPAP.
- Investigate appraiser concerns regarding undue influence and consumer complaints regarding conduct.
Over the past decade, lenders have outsourced in-house functions to more efficient third-parties such as AMCs. Many lenders (from Main Street to Wall Street) now use AMCs for the facilitation of residential appraisals. Among the benefits AMCs provide:
- Ensure Lender Compliance with Appraisal Regulations – As a third-party to lenders, AMCs guarantee compliance with all state and federal appraisal regulations.
- Ensure Lender Compliance with Banking and Mortgage Regulations – AMCs assist lender compliance with federal banking regulations (e.g., Fed, FDIC, OCC, CFPB) governing mortgage lending.
- Help Reduce Costs & Ensure Appraiser Independence – Lending institutions rely on AMCs because of the high cost to establish and maintain an in-house program to comply with federal appraiser independence requirements.
- Protect Against Marketplace Disruption – If AMCs were deregulated lenders would be forced to create a bifurcated system, using AMCs for non-FRTs but finding an alternative for FRTs. They could also seek to internalize this function and create elaborate internal controls and firewalls that they do not have to create in other states to get an appraisal for FRTs.
- Provide Quality Assurance to Lenders and Secondary Markets – AMCs provide the quality assurance lenders need to ensure a loan will be saleable in the secondary market. Federal agencies such as the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. (FDIC) and Fannie Mae require lenders to provide them with “thorough, accurate, and objective appraisal reports that result in reliable opinions of market value so they can make prudent underwriting decisions.” See also Freddie Mac “Appraisal Review Reminders”. Ultimately, when a lender is attempting to sell residential mortgage loans in the secondary market, it is the lender that is responsible to ensure the loans are saleable of which includes, in part, valuations based upon a credible appraisal.
In 2009, in the wake of the financial crisis and several lawsuits, New York Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac, with support from the Federal Housing Finance Agency, developed a set of appraisal rules called the Home Valuation Code of Conduct (HVCC). These interim rules were established to create independence – to eliminate undue influence by separating parties with a financial interest in a mortgage loan transaction from appraiser selection and retention.
Although no longer in force, HVCC did influence the creation of important Appraiser Independence rules in the 2010 Dodd-Frank Wall Street Reform (Dodd-Frank) and Consumer Protection Act. No party “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.
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