Fully 43% of Respondents Outsource To AMCs, According To A Nationwide Appraisal Network Survey
Working with an AMC seen as a way to help avoid conflict of interests and to comply with regulations.
Tampa, Fla., Feb. 2014–Nationwide Appraisal Network, an award winning, women owned appraisal management company, reports that 43% of respondents outsource appraisal management to an appraisal management company, according to a survey the firm conducted during a recent webinar series regarding third party oversight.
“Lenders recognize that doing the work in house may expose them to potential risks associated with perceived conflict of interest between the lender and the appraiser”, said Joni Pilgrim, Co-Founder and Director of Sales and Marketing for NAN. “Regulators want to make sure the appraisers are free to establish valuations in an independent manner, without pressure from lenders.”
Despite the independence issues and regulatory concerns, 36% of respondents have an internal program for handling appraisals and report they are doing it well. However, many reported that they need help with their internal program, while others are currently vetting AMCs.
Fully 44% of respondents report that their biggest challenge with an in house appraisal program is the lack of expertise and staff in their own organizations. “There is no question that lenders have felt that some AMCs are just throwing bodies at the problem—without effective training programs for inexperienced staff,” said Cari Burris, Co-Founder and Director of Operations for Nationwide Appraisal Network. “In addition, to save money, many firms do not hire enough people to ensure that work is completed accurately and independently and frankly, don’t want to be burdened with the expense of making such hiring decisions.
The second biggest challenge at 28% of respondents consider appraiser resistance to be the biggest challenge with an in house appraisal program. Less than 1% of respondents cited the lack of technology, costs, or unclear regulations as the most significant challenge they face.
According to the survey, 40% of respondents thought the cost of regulations has had a moderate effect on their business. “This response surprised me because of the amount of time and resources that many firms devoted to compliance with Consumer Finance Protection Bureau’s regulations and particularly its Jan. 10, 2014 deadline”, said Pilgrim. “Just 28% of respondents considered the cost of regulations a big expense, but 24% thought they would have a minimal effect and less than 1% reported it would have no effect that it would be business as usual.”