About AMCs

Appraisal Management Companies (AMC) have existed since the 1960s and grew in prominence following the global economic downturn in 2008. Post Dodd-Frank (2010), AMCs have played an increasingly important role as third-party service providers in the consumer mortgage process.

AMCs are full-service valuation providers hired by lenders and/or other financial institutions in a consumer protection role, per Dodd-Frank, to manage an independent and compliant process to determine the price and/or value of a residential real estate. They manage the ordering, tracking, quality control and delivery of valuation reports.

In addition to appraisals, 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.

AMCs support a smooth, timely and responsive mortgage process for consumers and lenders by working with certified appraisers and other real estate professionals across the nation. Among the vital consumer protection role and essential valuation-related functions AMCs fulfill:

  • Ensure appraiser independence by safeguarding against fraud and undue influence in the valuation process

  • Comply with federal and state laws governing valuation products and services

  • Protect public safety via background checks of appraisers before they can be employed or empaneled

  • Provide quality control to ensure the integrity of a supportable, dependable and credible appraisal

  • Help to lower costs associated with borrowing by providing lenders with efficient and cost-effective services

  • Assist state appraiser oversight by mandatory reporting on appraiser violations of the USPAP

  • Investigate appraiser concerns regarding undue influence and consumer complaints regarding conduct


Over the past decade, lenders have outsourced in-house functions to more efficient third-parties such as AMCs. Many lenders (from Main Street to Wall Street) now use AMCs for the facilitation of residential appraisals. Among the benefits AMCs provide:

  • Ensure Lender Compliance with Appraisal Regulations – As a third-party to lenders, AMCs guarantee compliance with all state and federal appraisal regulations

  • Ensure Lender Compliance with Banking and Mortgage Regulations – AMCs assist lender compliance with federal banking regulations (e.g., Fed, FDIC, OCC, CFPB) governing mortgage lending

  • Help Reduce Costs & Ensure Appraiser Independence – Lending institutions rely on AMCs because of the high cost to establish and maintain an inhouse program to comply with federal appraiser independence requirements

  • Protect Against Marketplace Disruption – If AMCs were deregulated lenders would be forced to create a bifurcated system, using AMCs for non-FRTs but finding an alternative for FRTs. They could also seek to internalize this function and create elaborate internal controls and firewalls that they do not have to create in other states to get an appraisal for FRTs

  • Provide Quality Assurance to Lenders and Secondary Markets – AMCs provide the quality assurance lenders need to ensure a loan will be saleable in the secondary market. Federal agencies such as the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. (FDIC) and Fannie Mae require lenders to provide them with “thorough, accurate, and objective appraisal reports that result in reliable opinions of market value so they can make prudent underwriting decisions.” See also Freddie Mac “Appraisal Review Reminders”. Ultimately, when a lender is attempting to sell residential mortgage loans in the secondary market, it is the lender that is responsible to ensure the loans are saleable of which includes, in part, valuations based upon a credible appraisal


In 2009, in the wake of the financial crisis and several lawsuits, then 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 comply with federal AMC rules and subsequent state AMC licensing programs (all 50 states plus Washington, D.C.) that mandate appraiser independence. AMCs adhere to strict policies to ensure compliance by employees and vendors.


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:

  • 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.