Today, lenders are very worried about investors requiring loan buy-backs. I keep hearing about minor appraisal errors, such as typos, resulting in buy backs. Of course, many of the loan documents, including appraisals, have been lost.
Is this realistic? I don’t know, but lenders are worried so they tell their agents, AMCs, to increase appraisal requirements. There were much more significant changes in 1989, such as appraiser licensing, that will not be reversed.
AMCs work for lenders, and do what they say. But, if one of an AMCs lender’s require something, that AMC may require that it be done for all of their lenders because it is too much of a “hassle” to send out separate engagement letters for each lender’s appraisals.
This is a short excerpt from an article in the January, 2013 issue of the paid Appraisal Today newsletter, which focuses on AMCs, including background checks and a profile of an AMC that pays well and that appraisers like to work for.