One government agency claims that all conforming appraisals must be ordered through an appraisal management company in order to comply with the Home Valuation Code of Conduct.
According to the 2009 Mortgage Fraud Report “Year in Review” released today by the Federal Bureau of Investigation, lenders are circumventing the code by using other non-commission employees to order appraisals.
“The HVCC agreement between the FHFA and the New York Attorney General’s Office was intended to govern the way appraisals were ordered for all single-family mortgage loans (excluding government-insured loans such as FHA and VA) sold to Fannie Mae and Freddie Mac,” the report stated.
The FBI added, “In the fashion of a true arms-length transaction, all appraisals are to be ordered through a third-party appraisal management company to eliminate collusion between the appraiser and those who earn an income from loan closings (e.g., mortgage loan officers, brokers).”
One company that helps lenders avoid AMCs and manage the appraisal ordering process themselves is Global Data Management System LLC. The Lansdale Pa.-based technology provider, which is a MortgageDaily.com advertiser, says its software enables lenders to maintain HVCC compliance while keeping the process in house.
Another firm that provides HVCC-compliant technology is InHouse.
