Audit Solutions for Lender & AMC Appraiser Panels

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AMC Services

AMC Compliance at 50% Less Cost Than Other Solutions!


Our low pricing on State Specific USPAP Standard 3 Compliance Reviews allow your compliance dollars to stretch further...many times we are half the price of other USPAP Compliance Solutions

 

VALIDOX AMC COMPLIANCE SERVICES INCLUDE

Current Edition Standard 3 USPAP Reviews that are compliant with every individual state appraiser board requirements for annual and periodic reviews (All 50 states), and the USPAP competency requirements as set forth in Federal AMC Minimum Rules. Reviews are performed by Certified and General Validox USPAP review appraisers, ensuring complete compliance to all state appraiser board requirements.

 

We keep you compliant with ALL State AMC requirements such as:

TX Appraiser Licensing and Certification Board

Texas Annual AMC USPAP Compliance “5% Rule” & Certification


State Requirement: USPAP Standard 3 Compliance Review of 1 of first 5 appraisals for each new Texas appraiser and annual USPAP Standard 3 reviews based on random selection of 5% of AMC's rolling 12 month production cycle (Texas AMC Compliance Rule 22 1104). Reviewers must be Texas licensed or certified according to Rule 22 1104.

 

CO Board of Real Estate Appraisers

Colorado Annual AMC USPAP Compliance Review “DOUBLE Rule” & Declaration


State Requirement: Quantity 2 USPAP Standard 3 Compliance reviews per year for each Colorado appraiser (2 for each appraiser per year) on AMC panel with random sampling of original appraisals (AMC Compliance Rule 4 CCR 725-2)

 

KS Real Estate Appraisal Board

Kansas Annual AMC USPAP Compliance Review ‘5% Yearly’ & Certification


State Requirement: Minimum of 1 USPAP Standard 3 Compliance review per Kansas appraiser per year or 5% of all appraisals per appraiser per year (Whichever is greater) KS AMC Registration Act 58-4704 Rules/Regs 117-20-7. Reviewers must be Kansas licensed or certified according to KS Act 58-4704.

 

NC Appraisal Board

North Carolina Annual AMC USPAP Compliance ‘5% Rule’ & Declaration


State Requirement: Minimum of 1 USPAP Standard 3 Compliance review per North Carolina appraiser per year or 5% of all appraisals per appraiser per year (Whichever is greater). (North Carolina AMC Rules Subchapter 57D .0306.)

 

NM Real Estate Appraisers Board

New Mexico Annual AMC USPAP Compliance ‘5% Rule’ & Certification


State Requirement: Minimum of 1 USPAP Standard 3 Compliance review per New Mexico appraiser per year or 5% of all appraisals per appraiser per year (Whichever is greater) (New Mexico AMC Reqs 47:14/Employee In Charge Req 16.65.2.11) USPAP Reviewers must be same License Level as Original New Mexico Appraiser

 

WV Real Estate Appraiser Licensing & Certification Board

West Virginia Annual AMC USPAP Compliance ‘5% Yearly’ & Attestation


State Requirement: Minimum of 1 USPAP Standard 3 Compliance review per West Virginia appraiser per year and/or representative sample for volume appraisers (Greater of the two) (West Virginia AMC Requirements Title 190 Series 5) USPAP Reviewers must be same License Level as Original West Virginia Appraiser

 

MT Board of Real Estate Appraisers

Montana AMC USPAP Compliance ‘Annual’ & Compliance Confirmation


State Requirement: Minimum of 1 USPAP Standard 3 Compliance review per Montana appraiser per year. Validox: Higher volume appraisers may require additional reviews. (Montana Appraiser Board AMC Compliance Code 37-54-511) USPAP Reviewers must be Montana Licensed or Certified

 

MI State Board of Real Estate Appraisers

Michigan AMC ‘Annual Certification’ of USPAP Compliance


Annual Certification of System in Place to ensure Appraiser Panel in compliance with USPAP (Michigan AMC Act 505 Article 26) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per MI appraiser per year or 5% of higher volume appraiser production. USPAP Reviewers must be Certified or General Licensure

 

OK Real Estate Appraiser Board

Oklahoma Annual AMC USPAP Compliance ‘Statistically Significant’ Rule & Declaration


(Oklahoma AMC Regulation Act Section 858 804) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per OK appraiser per year or 5% of higher volume appraiser production. USPAP Reviewers must be Oklahoma Licensed or Certified

 

AL Real Estate Appraisers Board

Alabama AMC Annual USPAP Compliance Certification Compliance Rule


(Alabama AMC Code Title 34, Section 34-27) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per AL appraiser per year or 5% of higher volume appraiser production. USPAP Reviewers must be Alabama Licensed or Certified

 

CA Bureau of Real Estate Appraisers

California AMC USPAP Compliance Review ‘Reasonable Procedures’ Rule & Certification


(California SB 237 Chapter 173:3577 Minimum Standards of Practice for Appraisal Management Companies) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per CA appraiser per year or 5% of higher volume appraiser production.

 

CT Real Estate Appraisal Commission

Connecticut AMC SB 13-2 USPAP Compliance Review Rule & Confirmation


(Connecticut SB 13 Section 2 c: AMC Review Procedures) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per CT appraiser per year or 5% sampling of higher volume appraiser production. USPAP Reviewers must be Connecticut Licensed or Certified

 

GA Real Estate Commission & Appraisers Board

Georgia Annual AMC USPAP Compliance ‘System’ and Procedures Rule & Certification


(Georgia Appraisal Management Company House Bill 1050: Section 4(H)) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per GA appraiser per year or 5% sampling of higher volume appraiser production.

 

IL Division of Real Estate

Illinois Annual AMC ‘USPAP Review System’ Certification Requirement


(Illinois AMC Administrative Code 225 ILCS 459 Section 40) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per IL appraiser per year or 5% sampling of higher volume appraiser production. USPAP Reviewers must be Illinois Licensed or Certified

 

KY Real Estate Appraisers Board

Kentucky Annual AMC USPAP Compliance ‘System & Process’ & Certification


(Kentucky Appraisal Management Company House Bill 13 RS HB 120-KRS Chapter 324) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per KY appraiser per year or 5% sampling of higher volume appraiser production. USPAP Reviewers must be Kentucky Certified or General

 

LA Real Estate Appraisers Board

Louisiana Annual AMC “Adherence to Standards’ USPAP Compliance & Declaration


(Louisiana Appraisal Management Company Licensing and Regulations Act Chapter 51-A §3415.13) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per LA appraiser per year or 5% sampling of higher volume appraiser production. USPAP Reviewers must be Louisiana Certified or General

 

MD Commission of Real Estate Appraisers

Maryland Annual AMC USPAP Compliance Certification and Renewal Confirmation


(Maryland Appraisal Management Company Licensing and Regulations Act SB 658 Section16) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per MD appraiser per year or 5% sampling of higher volume appraiser production. USPAP Reviewers must be Maryland Licensed or Certified

 

MN Department of Commerce

Minnesota Annual AMC USPAP Compliance Review Certification


(Minnesota Appraisal Management Company Licensing and Regulations Act Statute 82C Subd. 5-8) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per MN appraiser per year or 5% sampling of higher volume appraiser production.

 

MO Real Estate Appraisers Commission

Missouri AMC USPAP Compliance ‘System’ Rule & Confirmation


(Missouri Appraisal Management Company Licensing and Regulations Act 20 CSR 2245-10.010 -.030) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per MO appraiser per year or 5% sampling of higher volume appraiser production.

 

PA State Board of Certified Real Estate Appraisers

Pennsylvania AMC Minimum Standards USPAP Compliance ‘System’


(Pennsylvania Appraisal Management Company Licensing and Regulations 49 PA. Code Chapter 36 Section 431-432) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per PA appraiser per year or 5% sampling of higher volume appraiser production.

 

SD Department of Labor & Regulation

South Dakota Annual AMC USPAP Review Compliance ‘System’ and Confirmation


(South Dakota Appraisal Management Company Licensing and Regulations South Dakota Codified Law 36-21D & Rule 20:77) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per SD appraiser per year or 5% sampling of higher volume appraiser production. USPAP Reviewers must be South Dakota Licensed or Certified

 

TN Real Estate Appraisers Commission

Tennessee AMC USPAP Review Quality Control ‘System’ & Reporting Requirement


(Tennessee Appraisal Management Company Licensing and Regulations TN HB 3191 § 62-39-104) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per TN appraiser per year or 5% sampling of higher volume appraiser production. USPAP Reviewers must be Tennessee Licensed or Certified

 

UT Division of Real Estate

Utah AMC USPAP Review ‘Adherence to Standards’ & Internal Controls Certification


(Utah Appraisal Management Company House Bill HB 152 Section 61-2e-302) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per UT appraiser per year or 5% sampling of higher volume appraiser production.

 

WA Real Estate Appraiser Commission

Washington AMC USPAP Review ‘Adherence to Standards’ & Internal Controls Certification


(Washington Appraisal Management Company Requirements Section 18.310.060) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per WA appraiser per year or 5% sampling of higher volume appraiser production. USPAP Reviewers must be Washington Licensed or Certified

 

WY Real Estate Appraisers Commission

Wyoming Annual AMC USPAP Review ‘System’ & Adherence Certification


(Wyoming Appraisal Management Company House Bill HB 26 Section 33-39-215) Validox Recommendation: Minimum 1 USPAP Standard 3 Compliance review per WY appraiser per year or 5% sampling of higher volume appraiser production. USPAP Reviewers must be Wyoming Certified or General

 

In Addition, All Other Individual State Requirements Including those of:

Alaska (Federal Minimum AMC Rules or State Pending Legislation/Rules)

Arkansas State AMC Requirements

Arizona State AMC Requirements

Delaware State AMC Requirements

Florida State AMC Requirements

Hawaii (Federal Minimum AMC Rules or State Pending Legislation/Rules)

Iowa (Federal Minimum AMC Rules or State Pending Legislation/Rules)

Idaho (Federal Minimum AMC Rules or State Pending Legislation/Rules)

Indiana State AMC Requirements

Massachusetts (State Pending Legislation/Rules)

Maine (Federal Minimum AMC Rules or State Pending Legislation/Rules)

Mississippi State AMC Requirements

North Dakota State AMC Requirements

Nebraska State AMC Requirements

New Hampshire State AMC Requirements

New Jersey (Federal Minimum AMC Rules or State Pending Legislation/Rules)

Nevada State AMC Requirements

New York (Federal Minimum AMC Rules or State Pending Legislation/Rules)

Ohio (Federal Minimum AMC Rules or State Pending Legislation/Rules)

Oregon State AMC Requirements

Rhode Island (Federal Minimum AMC Rules or State Pending Legislation/Rules)

South Carolina (Federal Minimum AMC Rules or State Pending Legislation/Rules)

Virginia State AMC Requirements

Vermont State AMC Requirements

Wisconsin (Federal Minimum AMC Rules or State Pending Legislation/Rules)

 

Validox also provides USPAP Compliance Services to Help Appraisal Management Companies Conform with Newer Minimum Federal Rules for AMC’s

(Department of the Treasury-OCC; Federal Reserve System; Federal Deposit Insurance Corporation; Bureau of Consumer Financial Protection; Federal Housing Finance Agency)

 

We bolster your compliance and audit-readiness for Minimum Rules for Appraisal Management Companies regarding Appraiser and AMC USPAP Compliance for requirements as set forth in the Federal Register Vol. 80, No. 110, June 9, 2015:

Pursuant to FIRREA section 1124, the Agencies must establish, by rule, minimum requirements to be imposed by a participating State appraiser certifying and licensing agency on Appraisal Institute Other State Links New Minimum Rules for Appraisal Management Companies AMCs doing business in the State. Specifically, pursuant to section 1124(a), participating States must require that AMCs: (1) Register with, and be subject to supervision by, the State appraiser certifying and licensing agency in the State or States in which the company operates; (2) verify that only State-certified or State-licensed appraisers are used for Federally related transactions; (3) require that appraisals comply with the Uniform Standards of Professional Appraisal Practice (USPAP); and (4) require that appraisals are conducted in accordance with the statutory valuation independence standards pursuant to the Truth in Lending Act (TILA) (15 U.S.C. 1639e) and its implementing regulations.

In addition, States must require AMCs to verify that only State certified or State-licensed appraisers are used when a creditor or secondary mortgage market participant engages in a transaction that requires the services of a State-certified or State-licensed appraiser under the Federally related transaction regulations. A State also must require registered AMCs to have processes and controls reasonably designed to ensure that the AMC, in engaging an appraiser, selects an appraiser who has the requisite education, expertise, and experience to complete competently the assignment for the particular market and property type. This minimum requirement implements the requirement of section 1124(a)(2) 73 and emphasizes a core principle of the Agencies’ FIRREA appraisal regulation and the Interagency Appraisal and Evaluation Guidelines, which is that an appraiser must not only be State credentialed and competent generally, but also have specific competency to perform a particular appraisal assignment.

Pursuant to proposed § 34.214(a), Federally regulated AMCs were subject to the same substantive standards that were proposed for non-Federally regulated AMCs. Specifically, pursuant to § 34.214(a), Federally regulated AMCs were required to have systems in place to ensure that only State-certified or State-licensed appraisers perform appraisals for Federally related transactions; that appraisers with the requisite education, expertise, and experience necessary for the assignment are used; that appraisals comply with USPAP; and that the valuation independence requirements of TILA section 129E are met.

(b) Impose requirements on AMCs that are not owned and controlled by an insured depository institution and not regulated by a Federal financial institutions regulatory agency to: (1) Register with and be subject to supervision by the State appraiser certifying and licensing agency; (2) Engage only State-certified or State-licensed appraisers for Federally related transactions in conformity with any Federally related transaction regulations; (3) Establish and comply with processes and controls reasonably designed to ensure that the AMC, in engaging an appraiser, selects an appraiser who is independent of the transaction and who has the requisite education, expertise, and experience necessary to competently complete the appraisal assignment for the particular market and property type; (4) Direct the appraiser to perform the assignment in accordance with USPAP; and (5) Establish and comply with processes and controls reasonably designed to ensure that the AMC conducts its appraisal management services in accordance with the requirements of section 129E(a) through (i) of the Truth in Lending Act, 15 U.S.C. 1639e(a) through (i), and regulations thereunder.

Finally, USPAP Compliance Services that Assist In Helping Compliant AMC’s to Gain More Business from Lenders of Many Types, Including Banks, Credit Unions, Retail and Wholesale Mortgage Lenders.


AMC’s that are fully compliant with all state laws place them eligible to do business with a wider variety and larger pool of lending institutions.

 

Lenders of all types are under heavy pressure for compliance in all areas, and are particularly responsible for their appraisal vendor’s activities and are stepping-up their mandated oversight of AMC’s.

 

Following are a few of the regulatory issues facing lenders and why the need for compliant AMC’s has never been greater.

Important Appraisal and Appraiser Requirements from January 27, 2015 Fannie Mae Selling Guide

Fannie Mae requires a lender (or its authorized agent) to use appraisers that are state-licensed or state-certified (in accordance with the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and all applicable state laws).

The lender (or its authorized agent) must document that the appraisers it uses are licensed or certified as appropriate under the applicable state law. The lender must ensure that the state license or state certification is active as of the effective date of the appraisal report.

Lenders must use appraisers that have the requisite knowledge required to perform a professional quality appraisal for the specific geographic location and particular property type;

Although the Uniform Standards of Professional Appraisal Practice (USPAP) allows an appraiser that does not have the appropriate knowledge and experience to accept an appraisal assignment by providing procedures with which the appraiser can complete the assignment, Fannie Mae does not allow the USPAP flexibility.

The lender is responsible for the selection of appraisers and for the qualifications and quality of work provided by the appraisers that are selected;

Fannie Mae does allow lenders to use third-party vendors (for example, appraisal management companies) to manage the appraiser selection process. However, it should be noted that if a lender enters into a contract with any vendor, contractor, or third-party service provider, the lender is accountable for the quality of the work performed as if it was performed by an employee of the lender.

The lender (or its authorized agent) must establish policies and procedures to ensure that qualified individuals are being selected in accordance with Fannie Mae requirements, including the Appraiser Independence Requirements.

must ensure that an appraiser has demonstrated the ability to perform high quality appraisals before using an appraiser’s services. The quality of an appraiser’s work is a key criterion that must be used in determining which appraiser the lender (or its authorized agent) uses for its assignments. The requirement for an appraiser to produce a high quality work product must always outweigh fee or turnaround time considerations.

Delegating these responsibilities to a third party does not relieve the lender of its responsibilities related to the appraisal or the value, condition, and marketability of the property. See B4-1.3-12, Quality Assurance, for information related to ongoing review of appraisals.”

Lenders that use investors which are also banks and other depositories should note the requirements from their investors’ regulators. The FFIEC (Federal Financial Institutions Examination Council) helps regulate and monitor compliance with the Interagency Appraisal and Evaluation Guidelines of December 2010. The due diligence requirements for Third Party vendors such as individual appraisers and AMC’s include the following: (pp18-19)

“An institution is accountable for ensuring that any services performed by a third party, both affiliated and unaffiliated entities, comply with applicable laws and regulations and are consistent with supervisory guidance. Therefore, an institution should have the resources and expertise necessary for performing ongoing oversight of third party arrangements.

If an institution outsources any part of the collateral valuation function, it should exercise appropriate due diligence in the selection of a third party. An institution should be able to demonstrate that its policies and procedures establish effective internal controls to monitor and periodically assess the collateral valuation functions performed by a third party.

An institution also is responsible for ensuring that a third party selects an appraiser or a person to perform an evaluation who is competent and independent, has the requisite experience and training for the assignment, and thorough knowledge of the subject property's market. Appraisers must be appropriately certified or licensed, but this minimum credentialing requirement, although necessary, is not sufficient to determine that an appraiser is competent to perform an assignment for a particular property or geographic market.

The compliance process should:

Ensure the institution's practices result in the selection of appraisers and persons who perform evaluations with the appropriate qualifications and demonstrated competency for the assignment. "

 

Other regulations affecting Lenders and their AMC’s include:

CFPB- Bulletin 2012-03 ‘Service Providers; Bulletin 2013-06 ‘ Responsible Business Conduct: Self Policing, Self Reporting, Remediation, and Cooperation

NCUA- NCUA Letter No.: 07-CU-13 ‘Supervisory Letter-Evaluating Third Party Relationships’; Ltr: 08-CU-09 ‘Third Party Relationships Questionaire’

OCC- OCC Bulletin 2013-29 ‘Third Party Relationships’

FDIC- FDIC FIL 44-2008 Guidance for Managing Third-Party Risk

Title XI FIRREA- Real Estate Reform [12 U.S.C. 3331-3351] as amended by the Dodd Frank Act

OIG/Dept of the Treasury- OIG-14-034 ‘OCC’s Review of Mortgage Lenders’ Use of Third Party Service Providers Is Not Sufficiently Documented’

Multi-State Mortgage Committee (CSBS-AARMR) - MMC Mortgage Examination Manual

Interagency(Dept Treasury; Federal Reserve; FDIC; NCUA; FHFA; CFPB) - Minimum Requirements for Appraisal Management Companies; OCC; FRB; FDIC; OTS; NCUA - Interagency Appraisal and Evaluation Guidelines

FNMA- Selling Guide Jan 27, 2015; Appraiser Quality Monitoring FAQ’s July 2014; Appraiser Quality Monitoring Notice Jan 6, 2014

HUD- Mortgagee Letter 09-28

As the requirement from the Interagency Guidelines

“An institution is accountable for ensuring that any services performed by a third party, both affiliated and unaffiliated entities, comply with applicable laws and regulations and are consistent with supervisory guidance. Therefore, an institution should have the resources and expertise necessary for performing ongoing oversight of third party arrangements.” All individual states have requirements that active real estate appraisers have competency in the most current version of the Uniform Standards of Professional Appraisal Practice (USPAP). Certain violations of USPAP are also required to be reported to state appraiser boards. As a Mortgage Lender, in order to be fully compliant with the Interagency Guidelines, the USPAP competency requirement is critical. Validox provides the solution to assist in a Mortgage Lender’s responsibility to assure USPAP competency, as well as other core competencies such as geographic and product-type proficiencies.

Validox’s primary review used in testing for USPAP competency and adhering to federal and individual state requirements is the USPAP Standard 3 Review performed by our staff of employee appraisers. All Validox reviewers are certified or general licensure appraisers that cover all 50 states and US territories.

The proprietary Validox USPAP Standard 3 Review is an industry standard in its scope, quality and ease of use for our many clients. Reviews contain one of three possible opinions, which are:

PASS: No apparent USPAP deficiencies noted. The report is considered to be in compliance with USPAP.

PASS WITH COMMENTARY: USPAP deficiencies noted in the report. The deficiencies noted are unlikely to be considered as material and are unlikely to affect the credibility of the report and/or opinion of value.

FAIL: USPAP deficiencies noted in the report, likely to be considered 'material' per the Truth-in-Lending Act 12 CFR Part 226. The deficiencies noted potentially impact the credibility of the report and/or opinion of value.

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