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2010 AIR Advisory

As of May 1st, 2009, when AIR regulations became effective, most lenders are working  with AMCs (appraisal management companies) rather than hiring individual appraisers. The new AIR guidelines made a third party relationship necessary on all 1-4 unit single-family, conventional mortgages delivered to Fannie Mae (with Freddie Mac also adopting the code), effectively making it mandatory for lenders to commission appraisals from regulatory-compliant AMCs rather than individual appraisers. This can also mean that a new appraisal under the new regulations is required if the lender is changed after the effective date.

These new AIR guidelines are intended to ensure that the client will always receive a fair, accurate and unbiased evaluation of the home or property for purposes of financial transactions. The new guidelines have a primary intent of prohibiting lenders and mortgage brokerages from exercising any form of external influence or leverage on the appraiser.

This is actually good news for lending firms, in that competing lenders cannot influence their appraisers to inappropriately deliver an inflated or deflated opinion of value. Likewise, it prohibits value-shopping by ordering multiple, competing appraisals.

It is also the responsibility of all parties in the transaction to ensure the proper licensing and credentials of the appraiser delivering the opinion of value. Furthermore, payment must be processed indirectly - the lending institution or mortgage broker cannot compensate the appraiser directly. Appraisers cannot be blacklisted or graylisted as a result of the new rules, either. All of this points to the need for each lending institution and brokerage to partner with a suitable appraisal management company to manage the appraisal process and eliminate regulatory exposure.

The new AIR guidelines require that all Appraisal Management Companies deliver unbiased, fair, independent evaluations to all their clients without any external influence whatsoever. Regulatory compliance is one of the most signficant advantages of partnering with a firm like Appraisal Unlimited. Besides maintaining the appropriate paper trail, archiving, documentation, and ensuring compliance, partnership with Appraisal Unlimited can significantly reduce your overhead in tracking, monitoring, and managing appraisers and appraisals for your transactions.

Contact us today to set up your account, or just order your first appraisal online using our secure ordering system - your account will be created automatically. You can even place your credit card on file for easy payment.

Freddie Mac FAQ: http://www.freddiemac.com/singlefamily/appraiser_independence_faq.html

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