Building and maintaining an in-house appraisal management infrastructure can be a distraction from a bank’s core competency of lending. Not only does it create a new cost center, but it ends up residing in the “bubble” of a single lender’s experience, often times lacking the resources and scale needed for innovation and regulatory compliance.
National AMCs compete for business from a large and diverse group of lenders, servicers, investors and GSEs. This broad experience results in deep regulatory expertise (both state and federal), economies of scale and constant competitive innovation.
Regional banks and credit unions know they have to quickly adapt to survive in today’s environment. For those that still rely on an in-house panel of appraisers vs. outsourcing, now may be the best time to consider working with a proven AMC.
Want to know the right questions to ask when evaluating an AMC? Download our guide.
What to Know When Weighing a Panel of Appraisers vs. an AMC
Many banks and credit unions that use in house panels may explore AMCs for different reasons. They may find that an expanded footprint or sharp increase in volume exceeds the capacity of their current panel, have too many service or quality failures or want to reduce risk associated with today’s complex and ever changing appraisal regulations.
Regardless of the reason, there are many benefits of transitioning from an in-house panel of appraisers towards a capable AMC with a national footprint. Here are a few of them:
- AMCs Offer Comprehensive Compliance Oversight
A national AMC’s expertise is dependent on being knowledgeable and compliant with all state and federal regulatory concern – from passed laws to proposed changes in the committee stage. It takes dedicated resources specifically responsible to track these changes to stay compliant and ready for future change.
The risk with in house panels is that sometimes there are not enough resources to effectively track, plan and execute on all the regulatory changes mandated at the state and federal level. These changes can be compounded when they require IT or other policy and process changes within the institution.
National AMCs dedicated to effectively managing the appraisal process typically offer expertise from a seasoned chief compliance officer who has their finger on the pulse of the changing regulatory environment within the valuation industry, both at the state and federal level.
- A Fine-Tuned Quality Control (QC) Process
One of the jobs of an AMC is to deliver quality one-touch appraisals. It’s in their best interest to focus on fine-tuning their quality control process and investing in the technology, data and analytics necessary for an efficient, accurate and compliant appraisal service. While an in-house panel of appraisers will be dedicated to creating a thorough QC process, AMCs, who must compete for business, will use the combined learnings of all their clients – from small regional to large national players – to create a “best of breed” QC process. In reality, you will profit from the experience of others.
- A Dedication to Responsiveness
AMCs are built around responsiveness. Without it, they will lose business to competitors who can offer better service. An experienced AMC will have dedicated resources on your account, capable of chasing down information on an appraisal, helping the appraiser with any questions and keeping you updated on the status of the appraisal. What’s more, a dedicated contact within an AMC will know your bank’s unique needs, will be focused on your account and will know what’s in your pipeline — thereby allowing you to maintain continuity throughout an ever-changing industry.
- An Adherence to Top-Notch Technology
Not every lender is ready, willing or able to invest in the technology needed to satisfy a quality appraisal process. An AMC, however, will more often than not possess an all-in-one appraisal platform that ensures a compliant, efficient and transparent appraisal process.
All of the above doesn’t mean a thing if an AMC doesn’t have coverage in your area and/or won’t recruit to satisfy your needs. Make sure they do by asking to review their coverage, capacity and appraiser recruiting and onboarding processes.