Audit Solutions for Lender & AMC Appraiser Panels

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A Letter from Austin Christensen: Founder, Chief Compliance Officer and Certified Residential Appraiser –

If appraisers are to remain to be seen as a valued service to our clients in the mortgage industry, we need to get more involved in bringing forward solutions for the regulatory challenges our clients face.

The solution that could help save our livelihoods and forever keep the human element involved in the appraisal process is Validox.

As we all know, we are staring down the barrel of technology and automation that may forever change the role and livelihood of appraisers. The proliferation of non-appraiser valuation products and large scale QC systems like Fannie Mae's Collateral Underwriter will continue to grow and impact our profession. In contemplation of these challenges it has become very clear that if we are to remain to be seen as a valued service to our clients, we need to get more involved in bringing forward solutions for the regulatory challenges our clients face.

The Validox appraiser panel due diligence system is designed to be highly beneficial for our clients and the entire appraiser community. By now most appraisers understand that their clients (Banks, Credit Unions, Mortgage Lenders and AMC's) are under an increasing responsibility from federal and state regulators and auditors to complete and maintain proper due diligence on every single appraiser on their panel. This is true whether they use appraisers through in house methods or via a third party such as an AMC. Those due diligence and competency requirements include but are not limited to current USPAP reviews for every single appraiser on their panel, geographic competence verification, and product or form type competence & good standing verification among others.

This task has been increasingly costly and challenging for our clients. Let's bring forward a solution for them and for our profession. Let's bring them Validox!

Appraisers who have an active Validox profile are joining with Validox to bring a single cost effective solution that will be beneficial to their specific clients, and all other clients they may have in the future. Validox member appraisers are seen as valuable long term partners and show their commitment to assist their clients for a universal appraiser panel compliance solution.

Here is how it works. Appraisers submit to Validox all the required geographic and product competency information as well as a work sample for USPAP compliance review. Once received, Validox employs geographically competent appraisers in each state and area to review work files for USPAP competency. When the process is complete Validox issues universal certifications of compliance to be held in the appraisers online profile. That online profile is shared with our clients and is free of charge for them.

The typical fee that an appraiser pays for annual membership is only $39.00 . Paying just one annual membership can add up to savings thousands of dollars for appraisers, as there is no need to produce many different work files and audit information for each individual Lender and AMC panel they are on. Validox creates a universal standard for compliance and audit documentation and the savings in time and money is enormous for all lenders, AMC's and appraisers as well as the auditors, regulators and investors.

The time is now for Validox as we have begun to see individual clients taking it upon themselves to develop custom compliance solutions, which they must do with or without an appraiser driven universal solution like Validox. These individual solutions will end up costing them and us a lot of money. We may find ourselves unknowingly flipping the bill for every single appraiser panel that we are on in the form of reduced fee offerings for assignments to help cover our clients' costs. I know many appraisers who are on 10-15 different appraiser panels… imagine how much it could cost us for the USPAP review alone for each of our clients. That could add up to thousands of dollars per year for each of us. Lender client costs are significant on a much greater scale. There are many lenders and AMC's with appraiser panels of over 3,000 appraisers each which could conceivably cost them up to $1,000,000 per year just for USPAP reviews for every appraiser on their roster. Let alone the in house hassle of tracking it all down internally with no document consistency for them or us.

Without a no cost client solution like Validox for the lender, the idea of using more AVM's and non-appraiser valuation products becomes ever more appealing and we become less relevant.

Validox has been created to answer the growing needs of our clients and at the same time, be a major boost in helping career oriented, compliance-minded appraisers like yourself stand out from the proverbial crowd, and get recognized and approved on more high quality and higher paying lender panels. With a current Validox profile, you will get noticed and you will get greater opportunities.

Together let's Preserve Our Profession!

Yours Truly,

Austin Christensen
Founder & Chief Compliance Officer
Validox, LLC

Sample Regulations Affecting Lenders, their Agents and Appraiser Panels:

CFPB- Bulletin 2012-03 'Service Providers; Bulletin 2013-06 'Responsible Business Conduct: Self-Policing, Self-Reporting, Remediation, and Cooperation OCC- OCC Bulletin 2013-29 'Third Party Relationships' NCUA- NCUA Letter No.: 07-CU-13 'Supervisory Letter-Evaluating Third Party Relationships'; Letter: 08-CU-09 'Third Party Relationships Questionaire' FDIC- FDIC FIL 44-2008 Guidance for Managing Third-Party Risk OIG/Dept. of the Treasury- OIG-14-034 'OCC's Review of Banks' 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 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

Become a Member of Validox Today and Take Charge of Your Career

*Prices are subject to change without notice. Some states may be higher.

Benefits for You As a Validox Appraiser Member

The increased federal and state lender requirements for individual appraiser due diligence, competency and monitoring are fairly recent, and individual appraisers are just beginning to feel the significant cost of these regulations. Validox is a universal compliance and competency system that works for all lenders allowing appraisers a one-stop source of the documentation to help keep them in constant compliance with all their clients. In many ways, the Validox competency certifications are similar to errors and omissions insurance in its importance and universal value for all types of real estate lenders.

Some of the Validox Benefits You Will Receive With Membership

  1. You are now a “low cost to no cost” addition to any appraiser panel. Although as appraisers we may not be fully aware of the compliance costs that are part of our lender's obligations, the costs are real and they can be quite significant. All lenders and their agents (AMC's) must have a system and ongoing current documentation to help prove appraisers' individual competency and capability to perform assignments on their behalf. An appraiser who does not possess all of the necessary documents proving such competency and capability will likely create actual cost to each client on an annual basis to remain on their panel. Validox eliminates the lenders' annual costs to have you as a preferred appraiser on their panel. The result is better assignment opportunity for you and cost savings for each of your lender clients.
  2. Armed with your Validox Credentials, you can market yourself to other lenders with a single click from within the Validox system. There is not an easier and more professional way to gain exposure than the Validox single click Lender marketing system. With your Validox profile you have the ability to email your documents free of charge to any client of your choice, even if they are not a current Validox lender client.
  3. Savings of potentially thousands of dollars per year to the appraiser. Like E & O insurance, appraisers only pay once per year and share their online profiles with Validox clients rather than bearing the cost over and over for each of their clients.
  4. Keep and get more full-fee clients. As stated before, there are significant compliance costs for lenders for every appraiser on their panel. Appraisers who embrace Validox reduce the likelihood of having fees reduced by lenders to help cover the regulatory mandated compliance costs.
  5. Greater Assignment Volume. Validox clients only use appraisers who have a complete Validox profile. When you complete your online profile you are immediately visible and searchable for every Bank, Credit Union, Mortgage Lender and AMC using our system.
  6. Validox recruits for you! As a member of Validox, you will be part of our own ongoing efforts to market and recruit lenders. You will be showcased as part of our national appraiser panel made up of appraisers that have removed the compliance cost and verification burden from our ever growing list of lenders. Lenders will see your profile and can search for you through using many different search parameters.
  7. Showcase your capabilities and specialties. With Validox, you have the ability to communicate your specialties and our clients have the ability to search for you based on what product types you have communicated you are competent to perform.
  8. Showcase your coverage areas and geographic competency. As an appraiser like us, you may have had occasions where you have been inappropriately accused of performing services in a geographic area where competence is a “concern.” Our Geo Cert helps dispel that myth and shows that you are a responsible appraiser and only perform services in those areas in which you have the competence to do so. As you are aware, having access to the appropriate data sources necessary to produce a credible report and having performed services in that particular market before are normal qualifiers for geographic competence. As appraisers ourselves we get it, and we help you to bring clarity to the issue. Your Validox Geographic Certification speaks highly of your ethics and is sure to be seen as a value add to your clients as well as the borrower who will receive a copy of your appraisal report.
  9. Communicate your turn times and typical fees for order completion. Our Product and Fee Cert shows what you charge and how long the client should expect for you to complete the order. This is done on a county by county breakdown to help set lender expectations appropriately.
  10. Proof of good standing. With the click of a button our system checks your ASC status in real time and communicates it to our clients proving you are in good standing and ready for assignments.

The Benefits of Validox Are Growing. Take Charge of Your Career and Join Today!