Public Resources

About AMCs

An Appraisal Management Company (AMC) works with lenders and appraisers to ensure independence of the valuation process.  They manage the ordering, tracking, quality control and delivery of valuation reports.  AMCs existed since the 1960s and grew in prominence following the global economic downturn in 2008.

AMCs offer many valuation products and services to lenders and secondary market investors.  They are required to maintain strict adherence to federal and state regulation and law in accordance with Dodd-Frank, the Truth in Lending Act and federal Interagency Guidelines.

Appraisal Independence

In 2009, in the wake of the financial crisis and several lawsuits, New York Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac, with support from the Federal Housing Finance Agency, developed a set of appraisal rules called the Home Valuation Code of Conduct (HVCC). These interim rules were established to create independence – to eliminate undue influence by separating parties with a financial interest in a mortgage loan transaction from appraiser selection and retention.

Although no longer in force, HVCC did influence the creation of important Appraiser Independence rules in the 2010 Dodd-Frank Wall Street Reform (Dodd-Frank) and Consumer Protection Act.  No party “shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner.”

REVAA members also comply with state laws regarding appraiser independence and have strict policies to ensure compliance by employees and vendors.

Introduction to Valuation Products

Estimating the value of residential property is important for real estate financing, selling/purchasing a home, investment analysis and other needs. There are several common valuation products used, including:

  • Appraisal – the process of determining the market value of a property.  Appraisals may be manual or automated with sales comparisons and market data analysis including on-site inspections and several other conditions based on requirements by the Government Sponsored Enterprises (Fannie Mae and Freddie Mac), the Federal Housing Authority and the relevant financial institution regulatory agencies.   The Uniform Standards of Professional Appraisal Practice (USPAP) are the generally accepted standards for professional appraisal practice in North America.

 There are several standard appraisal report forms including:

— Uniform Residential Appraisal Report (form 1004)

— Individual Condominium/PUD Appraisal (form 1073)

— Small Residential income Property (form 1025)

— Exterior-Only Inspection Residential Appraisal Report (form 2055)

— REO Appraisals (all property types)

— Manufactured Home Appraisal Report (form 1004C)

— Exterior Only Inspection Individual Condominium Unit Appraisal Report (form 1075)

— Appraisal Update and/or Completion Report (form 1004D)

— Individual Cooperative Interest Appraisal Report (form 2090)

— Desktop Appraisals

  • Automated Valuation Model (AVM) – combines industry data, proprietary information, and proven methodology testing to deliver a variety of valuation solutions with reliable results.  AVMs help AMC clients/investors effectively manage risk and can serve as an appraisal for mortgage financing purposes.
  • Appraisal Risk Reviews (ARR) – measures the accuracy, compliance and risk factors of an appraisal and efficiently supports the due diligence needs of investors and the compliance obligations of rating agencies and regulators.
  • Broker Price Opinions (BPO) – an alternate real estate valuation used by financial institutions, AMCs and others. It is not considered a licensed appraisal, but can be used by AMCs to cross check appraisals, help determine the value of REOs, short sales, foreclosures and bulk packages of mortgage loans and due diligence for financial institutions. A BPO is usually a brief 2-3 page report, which includes neighborhood analysis of the property, comps (comparable properties), and local as well as regional market information.
  • Desk Review(also referred to as a desktop product review by AMCs) analyzes the appraisal to determine the reasonableness or confidence that the appraised value provided is accurate.  This product examines the logic and reasoning displayed in support of the value estimate and the appraisal report’s compliance with USPAP.