Broker’s Selection of AMC and Fannie Mae’s Appraiser Independence Requirements (“AIR”)
Question:
Is it compliant for a mortgage lender to permit a mortgage broker to select the appraisal management company (“AMC”) from which to order an appraisal if the lender provides the broker with a list of authorized AMCs?
Answer:
No. This process provides the broker with an element of responsibility for selecting and/or retaining the appraiser, and is, therefore, not compliant with the Appraiser Independence Requirements (“AIR”). Fannie Mae has recently been citing Seller/Servicers in relation to this issue. It does not matter if the lender is responsible for the relationship with the AMC, including compensation.
Notably, a lender may direct a mortgage broker to one specifically authorized AMC if the lender has previously arranged for its appraisal process to be managed by that particular AMC. This process is compliant with AIR because the lender, and not the mortgage broker, is responsible for selecting and/or retaining the appraiser. Additional FNMA AIR FAQs can be found here.
