Appraisal Management Company

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Appraisal Management Companies (AMC) are independent organizations that serve as a liaison between lenders and real estate appraisers. AMCs offer a variety of services, including choosing, allocating, and supervising appraisers; guaranteeing adherence to laws and industry standards; delivering appraisal reports to lenders; and collecting and disbursing fees.

The 2008 financial crisis exposed the dangers of collusion and bias between appraisers and lenders, which led to the emergence of AMCs. The objective of AMCs is to guarantee the independence and integrity of the appraisal process by putting a barrier between the parties. By taking care of the administrative and operational procedures involved in placing and receiving assessment orders, AMCs also assist lenders in saving time and resources.

AMCs do not, however, come without criticism. AMCs are accused by some detractors of lowering the quality and dependability of assessments by employing underqualified or inexperienced appraisers, paying low rates, setting arbitrary timelines, or interfering with the appraiser's judgment. Some contend that AMCs do not improve the assessment process but instead cause lenders and borrowers to incur more expenses and delays.

Several state and federal laws regulate AMCs in different ways. AMCs must register, receive licenses, or adhere to particular norms of conduct in some states. The Dodd-Frank Act of 2010 imposed minimal standards at the federal level for AMCs to participate in transactions that are related to the government. The Appraisal Subcommittee (ASC), which regulates AMC operations and keeps an AMC registry nationwide, was also established by the Act.