Careful Selection of an Appraisal Management Company Partner Can Help Lenders with Regulatory Compliance


This article originally appeared in Mortgage Compliance Magazine, July 2016

The home appraisal is a key process and document in loan origination and mortgage lending. In the conduct of that assignment, the appraisal management companies that work with lenders are subject to Federal rule making subsequent to the Dodd-Frank Wall Street Reform and Consumer Protection Act (HR 4173) of 2010, as well as a system of state registration and regulation.

Moreover, as the Consumer Financial Protection Bureau (CFPB) has said, "supervised banks and nonbanks are expected to oversee their business relationships with service providers in a manner that ensures compliance with Federal consumer protection law," which means that these entities must have an effective process for managing the risks of service provider relationships.

Even though we are now several years removed from the most recent financial crisis, regulatory surveillance and enforcement remain intense.

Thus, in today's regulatory environment, appraisal management company (AMC) partners play an increasingly important role in overall regulatory compliance, especially as lenders of all sizes consider the benefits of outsourcing appraisal management.

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