A group of executives and compliance officers who lead the Designated Appraiser Coalition (DAC), a national organization of 400-plus valuation service professionals who are also designated members of the Appraisal Institute, last year introduced a system that allows small to midsize mortgage lenders to compliantly manage their own appraisers without the assistance of an appraisal management company (AMC).
Version 1.0 of the Financial Institution Compliant Appraisal Practice (FICAP) application and service is now ready for general release to banks, credit unions, mortgage companies and other mortgage lenders, the group says in a press release. The Web-based valuation management system helps financial institutions comply with the Interagency Appraisal and Evaluation Guidelines, as well as bank-specific policies and procedures.
The system includes a management component that lets lenders manage their approved appraiser lists as well as manage appraisal function by loan officer, appraisal review department and contract appraiser.
It also includes a compliance component that is designed to help lenders deal with an increasingly complex array of regulations related to valuations.
‘FICAP is our response to the ongoing and increasingly misunderstood bevy of federal regulations imposed on financial institutions,’ says Greg Johnson, MAI, SR/WA, a Florida-based commercial real estate appraiser and chief services administrator for the DAC and FICAP projects. ‘Although some large national banks spend millions to develop and support their own technology at significant cost to their customers, smaller community and even large regional financial institutions don't have the resources to develop and deploy the technology systems required to efficiently conform with regulatory requirements. This often forces them to choose less desirable, higher-risk valuation service management options, including AMCs.
‘One of the big problems for financial institutions that rely on lower quality solutions is loss of process and management control,’ Johnson adds. ‘Improperly valued collateral is devastating to any financial institution. As professionals, we saw the opportunity to assist our mortgage lending colleagues and created FICAP as the solution to resolve their risk and compliance issues.’
As per the press release, the developers of the application stand ready to provide software support, as well as compliance expertise. Experienced and highly qualified compliance officers will assist customers with system setup and training. What's more, they can assist with compliance-related issues by helping lenders establish or update policies and procedures.
Heading the support team is Cheryl B. Bella, MAI, AI-GRS, chief compliance officer for FICAP. One of the leading compliance consultants in the country, Bella's experience with several major financial institutions includes establishing their in-house review departments. She has provided her deep knowledge of processes to help build the FICAP system from the ground up.
‘The genius behind the FICAP system is in how it efficiently streamlines the appraisal and review management process while maintaining functional regulatory compliance and the necessary degree of separation between the financial institution and the appraiser,’ Bella says in the release. ‘System cost is structured so that use of FICAP can be free to the financial institution client. The response from our beta test clients was so positive and full of gratitude that we know FICAP is the most cost-effective, winning solution for financial institutions at all levels.’