Appraisals are done for many reasons, e.g., legal, personal value information, appraisals to establish a property sales price, tax appeal, appraisals to establish estate value, appraisals certifying real estate value in cases of divorce, special appraisals to resolve easement value issues, appraisals establishing the impact of high voltage lines on property value, appraisals for stigmatization (mold or water damage), etc. But appraisals done for mortgage lending and lenders have special requirements addressed below.
Appraiser independence in appraising for home values has been a recent issue in mortgage lending. National legislation addressed this issue as HVCC (Home Value Code of Conduct). The result was the creation of third party agencies called Appraisal Management Companies (AMCs). This was done in an effort to ensure appraiser independence and impartial value reporting.
The later Dodd-Frank (Code of Conduct) legislation specifically requires that lenders separate anyone on the sales side of the business (loan originators - the loan officers and loan processors) from appraisers. (Under Dodd-Frank, however, Realtors can still talk to the appraiser.) As noted the loan origination function separation of lenders from appraisers began to be performed by third party Appraisal Management Companies--and AMCs are now widely used. The Arizona Board of Appraisers lists 164 registered AMCs in Arizona. But the legislation also provides for an alternate--lenders must use "prudent safeguards" to ensure that a commissioned employee can't influence an appraiser (Truth In Lending Act Section 129E Appraisal Independence).
Mercury Network, by computer software developer a la Mode, meets the required issue of "prudent safeguards." The problem of appraiser independence is solved in that Mercury Network operates in a "double blind" mode that hides the identity of the appraiser and the lender, making it easy for the two to communicate while still maintaining Dodd-Frank compliance. There are many appraisers ready to accept orders, and the appraiser selection system lets lenders take into account local factors like appraiser proximity to subject and more for maximum flexibility.
The appraiser/lender separation issue now doesn't have to be the use of an Appraisal Management Company (AMC). Utilization of Mercury Network appraisal delivery enables direct appraisal assignments to the appraiser while providing 'double blind' appraiser/lender separation. This typically reduces the final appraisal fee to lenders and clients by eliminating the 'middle-man' appraisal fee add-on by AMCs. The 'add-on' fee may vary but may amount to several hundred dollars added to the appraiser's fee. The total AMC appraiser cost is then passed on to the buyer, increasing closing costs of the mortgage loan.
But the arguement of AMCs has been that their oversite and audit controls are resulting in better appraisals justifying the cost add-on, and in some instances this has been true. At AMS Appraisals, appraisal quality is equal or superior to that of AMC audited appraisals and value determination is independent and without bias.
For lenders with management policies that allow loan originators to work directly with appraisers the Mercury Network audit trail of communications that ensures complete transparency during the entire process will be appreciated. It's a solution that meets lenders requirements no matter what level of separation lender management considers prudent. Use of Mercury Network also incorporates features to make the process of managing appraisal orders more efficient. One example is the delivery system used by the appraiser which utilizes a customizable set of review rules that run before the appraiser sends the report. This results in fewer resends and increased lender staff efficiency.
AMS Appraisals appraisals meet the highest quality standards and lender expectations and the utilization of the Mercury Network assures 'double blind' separation from lenders required by Dodd-Frank legislation. AMS Appraisals transmits completed appraisals via the Mercury Network.