Effective July 17, 2022, Freddie Mac transitioned from offering automated collateral evaluation (ACE) appraisal waivers to offering ACE+ PDR (property data report) for cash-out and certain no cash-out refis. For details, please see Freddie Mac Single-Family Seller/Servicer Guide Bulletin 2022-13.
It seems like every TV channel I flip to, I see CarShield commercials… essentially insurance hedging against costly vehicle repairs. That got me thinking about how lenders can hedge against the costs of poor efficiency, quality, and cycle-time from their Appraisal Management Companies (AMCs). The risks are very real and damaging to lenders everywhere. While there is no such insurance (or assurance) per se, there are plenty of leading indicators to look for – none more prominent than technology.
People – Process – Technology
Remarkably, a 100% client retention rate is achievable. Here at United States Appraisals, it is a badge of honor when you consider the pace of business, the changing lender landscape, the ever-changing regulatory and technology environments, and so many other detractors – remarkable indeed!
July 21, 2020, marked the 10th anniversary of signing the Dodd-Frank Wall Street Reform and Consumer Protection Act (aka 'Dodd-Frank') into law. The financial crisis of 2008 prompted the 350,000-word bill, which had far-reaching impacts, some foreseen and some not.
Choosing the right strategic partner can make or break your business!While all vendors are important to the lender’s supply chain, selecting the right AMC to manage the assessment of your loan’s collateral can have a major impact on your bottom line.
As it turns out, Kindergarten may have provided the most prophetic life and business lessons. This is most certainly true in running an appraisal management company (AMC). Sure, business school provided a wide-ranging foundation that has made a tremendous difference, but nothing compares to the wisdom of Ms. Parker in the early 1970s.
What Does an Appraisal Management Company (AMC) Do?
Short answer – the most capable and best-performing AMCs step in to remove the following burdens off mortgage lenders:
I used to know how many Appraisal Management Companies (AMCs) there were, but so many come and go; it’s impossible to keep track. That leads me to an intriguing thought — Why? And, if I were an appraiser in today’s environment, how would I navigate my options? What would I need from an AMC?
I’d want what we all seek — to maximize my income with the least amount of hassle and frustration. An enjoyable and reciprocal professional relationship.
It was a much different world before the days of HVCC and Dodd-Frank. Before this legislation, about 80% of appraisal assignments came directly from lenders and local sources. Today, it has flipped to the exact opposite. Therefore, engaging in the AMC model is imperative for most appraisers.
While not everyone likes Dodd-Frank, appraisers do benefit from it, for example:
‘Sorry, I am not looking for another vendor. I only engage with strategic partners.’ That should be the position of every lender out there looking for service providers. But is it?
- Seeking consumers with financial needs
- Developing products
- Underwriting and funding loans
- Navigating legal, regulatory, and compliance frameworks
- Servicing portfolios of loans
This skinny-down trend has steadily dismantled prior decades of the seismic sized scope-creep pursued by lenders, especially the big ones, trying to do absolutely everything in-house. It’s not our place to judge how well that worked, although the industry-wide retreat from those days likely tells the tale.
Today, almost every internal department and function can be up for consideration for outsourcing, even underwriting. Some of the areas that often loom large in such evaluations are loan servicing, IT, operations, and appraisal management. Being an AMC, we shall focus on the dynamics in play that generally cause lenders to outsource to AMCs.