Validox Helping Lenders With AMC Oversight

Posted by Patrick Barnard on March 24, 2015 No Comments
Categories : Residential Mortgage

Stringent third-party oversight requirements recently imposed by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the National Credit Union Association place a heavy burden on lenders when it comes to monitoring their appraisal management company (AMC) partners.

This additional compliance and oversight is putting pressure on already over-tasked lender compliance staff, according to a press release from Validox, which offers an AMC panel audit and compliance solution.

As the company points out, many lenders have several hundred to several thousands of appraisers to monitor and oversee on a continuous basis. This is true whether they use AMCs or not.

The Interagency Appraiser and Evaluation Guidelines state, ‘An institution should be able to demonstrate that its policies and procedures establish effective internal controls to monitor and periodically assess the collateral valuation functions performed by a third party. An institution also is responsible for ensuring that a third party selects an appraiser or a person to perform an evaluation who is competent and independent, has the requisite experience and training for the assignment, and thorough knowledge of the subject property's market.’

Validox says compliance officers who regularly perform audits are seeing an increase in mortgage violations due to the weakness of compliance management inside lending and AMC institutions. Very often, lenders do not have the existing bandwidth or experienced professionals to fulfill all these appraiser compliance requirements.

In addition, most lenders cannot keep up with the substantial costs to maintain a fully compliant appraiser panel. As a result, lenders are beginning to decrease the size of appraiser panels and searching for automated alternatives.

Enter Validox's compliance solution. Using this system, an appraiser pays an annual fee and initiates the process. From there, lenders and AMCs can verify the Uniform Standards of Professional Appraisal Practice reviews, and all appraiser competency certifications are updated through the system at no cost.

Validox says it can help lenders comply with these new regulations by providing services and functions in the following areas:

  • Ongoing oversight;
  • Appropriate due diligence;
  • Standardized policies and procedures;
  • Internal controls;
  • Periodic assessment;
  • Selection competence;
  • Requisite experience;
  • Requisite training;
  • Proper licensing;
  • Geographic competence;
  • Product-type competence;
  • Good standing verification; and
  • Regulatory consistency.

For more, click here.

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