I have been reviewing the Interagency Appraisal and Evaluation Guidelines to evaluate whether it is permissible for a mortgage loan officer to order a real estate appraisal through an Appraisal Management Company (AMC). I am being told that "there is nothing that says they cannot" though I have not reached out to a regulatory agency to determine if the AMC is considered to be the independent party. From an organizational structure perspective, the mortgage loan officers have processors and the processors are capable of order appraisals through the AMC. The concern is we do not have any system controls to prevent a MLO from ordering (I.e., we have provided some of the MLOs with a user name and password to the AMC to place appraisal orders).

Thanks

complianceman

Can anyone help with this questions?

Looking through the guidelines at appraisal management and third party arrangements I didn't see anything that that would specifically prevent it.

The AMC would IMO be an independent party and they are responsible for choosing the appraiser. As long as the loan officer cannot in anyway directly or indirectly influence the AMC's choice of appraisers for the assignment I don't see an issue however you should have your procedures for who can and cannot order appraisals documented.

If the loan officers have assigned processors then I personally do not see a need for them to be ordering appraisals.

I agree with Dan. That said, it would always be better to have independence in ordering - even if through an AMC - if you can.