Managing Your AMCs With Compliance

With the latest appraisal regulations and investor requirements, many lenders are outsourcing appraisal operations to appraisal management companies. Using an AMC doesn’t absolve the lender from liability, so it’s important to conduct due diligence on AMCs as well as all your service providers.

To comply with AIR, the CFPB, OCC requirements and others, you need to consider a few critical factors:

>> Your service provider is subject to the same CFPB supervision you are. Make sure they are prepared for those exams and have experience answering the tough due diligence questions.

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>> The OCC mandates ongoing, consistent monitoring of all activities and performance throughout the life cycle of your relationship with the third party. Verify you have a way to compare your vendors and a system for reporting performance in case of an exam.

>> Make sure your vendors are protecting borrower data. The OCC specifies it’s your responsibility to ensure your vendors are complying with the Gramm-Leach-Bliley Act for consumer privacy. This is of particular importance when it comes to appraisal operations, since protected information is often shared.

When working with AMCs, it’s a good idea to deploy one technology platform to connect to all of them. In that scenario, you can easily enforce your compliance policies across all your vendor channels.

A single technology platform will also eliminate unnecessary due diligence burdens you would otherwise have to meet with each individual vendor. Make sure your platform enforces your requirements, and you’ll kill several birds with one stone.

One of the often overlooked requirements of the OCC is that you should be able to easily onboard new vendors for critical processes and business continuity, should the need arise. A single technology platform allows you to compare vendor performance, connect to new vendors when you need them, and make adjustments to your strategy quickly when necessary.

It’s also important to make things as easy for production as possible so they can remain focused on new business. If you’re using multiple AMCs, it will cause confusion for originators if they need to log in and order appraisals from various AMC websites. When should they order from this company, and when should they order from that company? Are you asking them to track multiple logins and systems? A single platform gives your staff an easy-to-remember workflow that reduces mistakes and frustration. Your appraisal desk can still assign orders to the vendors they choose, while production focuses on originations rather than appraisals.

At Mercury Network, there are more than 130 AMCs already integrated and ready to accept your appraisal orders. You can deploy your own branded appraisal ordering site for your loan originators, or they can order directly from their loan origination software (LOS). You won’t have to waste time with status questions or chasing vendors with questions since order status is updated live and shared with any party you wish. Compliance concerns aside, that streamlined communication loop can save everyone valuable time.

More than 700 lenders and AMCs use Mercury Network, so we hear the latest best practices around third party due diligence and oversight. If you have feedback or questions, don’t hesitate to reach out to us at Even if you don’t use Mercury Network, we can help you with ideas and suggestions to improve your operations and compliance standards.

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