Appraisal Management Company (AMC)
Candlefocus EditorAMCs typically operate under the oversight of the Appraisal Subcommittee of the Federal Financial Institutions Examination Council (FFIEC), as well as state-specific guidelines that may vary from jurisdiction to jurisdiction. Requirements of AMCs and their nationally certified appraisers must adhere to the Uniform Standards of Professional Appraisal Practice (USPAP) set forth by the Appraisal Foundation.
The purpose of using an AMC to manage the appraisal process is to ensure appraisers are independent of the lending institution. Appraiser independence is important to ensure values are not being skewed based on lender influence or other outside interests. Letters of Engagement are issued to ensure appraisers are assessed appropriately while maintaining such independence.
For lenders, AMCs provide improved tracking and monitoring of the appraisal process, promote anonymity of appraisers, reduce compliance risks associated with unreviewed appraiser work, and make the appraisal process more efficient and cost effective.
For appraisers, AMCs offer a central point of contact for appraisal services. Appraisers benefit from not having to deal directly with lenders, reducing the potential for conflicts of interest between the lender and the appraiser.
By acting as a middleman, AMCs benefit both lenders and appraisers, as well as play an important role in the overall financial and real estate market by providing a reliable and independent valuation service. As an AMC, it is the responsibility of the company to maintain and uphold the appraiser independence required for the best interest of both the lender and the borrower.