Appraisal Management Companies (AMCs) are attracting attention from the government. The fallout from the recent real estate collapse has lead to more scrutiny. There have been drastic changes to regulations for home valuations across the country. These regulations are aimed at boosting consumer safety and stabilizing the housing market. Most of the new AMC legislation requires companies to ensure their appraisals are in comply with the Uniform Standards of Professional Appraisal Practice. The management companies are responsible for only using certified and licensed appraisers.
In the past, AMCs were not regulated institutions; the consumer was exposed to the potential for low quality appraisals. This lead to the public’s lack of trust in the appraisal profession. For this reason, state governments are starting to require appraisal management companies to be bonded. The bond guarantees they will abide by all applicable laws and regulations in the state they place appraisers in.
An appraisal management company (AMC) is a business that manages a network of certified and licensed appraisers. A mortgage or lending institution would hire an AMC to find qualified appraisers. The AMC recruits, qualifies, verifies licenses, and negotiates fees a network of third-party appraisers. It also involves ongoing quality control of the appraisal process. In short, an AMC is an outsourcing option for the mortgage lenders.
Unlike insurance, the bond is in place to protect the public from you. If there is a claim placed on your bond and you are found at fault the surety company will pay out. However, you will have to pay them back.