Nationwide Appraisal Network Third Party Oversight Compliance Webinar Part II
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Transcript of Nationwide Appraisal Network Third Party Oversight Compliance Webinar Part II
Third Party Oversight Compliance & Best practices
www.Nationwide–Appraisal.com
888-760-8899
Director of Quality
Assurance
& Compliance
Cristy Conolly Joni Pilgrim
Director of Sales & Business
Development
Quick Poll
appraiser independence
In case you missed Part I… Topics Included…
appraiser selection
appraisal disputes
engagement letters
[email protected] to request slides
What’s on the agenda?
• Appraisal Panel Management
• Proper Vetting
• Background Checks
• Customary & Reasonable Fees
• Approved Appraiser Lists
• Exclusionary Lists
• Mandatory Reporting
• Managing Communication
• Resolution of Deficiencies
• Ordering 2nd Appraisals
NAN Compliance Portal
www.Nationwide-Appraisal.com
Main Objectives
Challenge: Managing the risk involved in the appraisal process.
Goal: A better understanding of the regulatory requirements and best practices.
Get some clarity and relief: from the burden of the unknown.
Quick Poll What’s your biggest challenge with Panel
Management?
Proper Vetting - process ensures quality panel of appraisers
1. Establish criteria for approval
• Prior disciplinary actions
• Geographic Competency
• Data Sources
• Property Types
• Methodologies
• Education & Experience
• References
• Insurance
• Sample reports (or at NAN the “AAR”)
• Background Checks
Vetting at NAN
1.Register on-line through secure portal
2.Service Level Agreement
3.Complete online profile
4.“Preliminary Approval” status
5. Appraiser Approval Report (AAR)
NAN’s Appraisal Approval Report (AAR)
• # of QC revisions required
• # of attempts required to complete revisions
• # of files escalated to staff appraiser
• Communication (timeliness & professionalism)
• Adherence to due dates
• Accuracy of report
• Completeness of report
• Fannie Mae, Freddie Mac, FHA, USPAP
• Comments provided by Appraiser
• Required addendum page
Approved or Denied
1. Approved
2. Approved with Discretion
3. Denied
Monitoring Appraiser Performance 1.Periodic QC Review
2.Scoring System
3.Communicate expectations in SLA
4.Routine procedures for supervision
• Communication
• Quality of work
• Professionalism
• Turn times
5.Transparency in disciplinary actions
Monitoring Appraiser Performance at NAN
Best Practices
•Score appraisers on each assignment
•Take the opportunity to coach and improve
•Periodic Reviews
•Define status levels based on performance
• Active
• Hold
• Watch
• Terminated
• Disabled
Are Approved and/or
Exclusionary Lists allowed?
Examples of Infractions
• Continual violation of SLA
• Substantive violation of USPAP
• Fraud
• Unprofessionalism
• Poor customer service
Best practices for List Management
• Clear written policy
• Have a bonafide reason
• Coach Appraisers for better service
• Provide a written notice
• Allow for rebuttal
• Stay consistent
• Loan production staff not allowed to make determinations
Mandatory Reporting
Dodd-Frank:
•“reasonable basis to believe”
•Failed to comply w/ USPAP (ethical or professional)
•Significant affect on value
Interagency Guidelines:
•State regulatory officials • USPAP
• State Laws
• Unethical/Unprofessional
Mandatory Reporting Best Practices
• Pinpoint appropriate course of action
• Stay up-to-date on state laws
• Determine Appraiser status
• “Significant affect on value?”
At NAN…
• Terminate Appraiser
• Notify state agency
• Create separate incident report
• Notify appraiser
Background Checks
• AQB mandating use by state regulators in 2015
• Some lenders require use of background checks now
Best Practices
• Understand lender requirements: include in SLA
• Rebuttal Process
• Clear policy with specific offenses and actions
• Have a committee/ Be consistent
Customary & Reasonable Fees
The Dodd-Frank Act States…
“Lenders and their agents shall compensate fee appraisers at a rate that is
customary and reasonable for appraisal services performed in the market
area of the property being appraised. Evidence for such fees may be
established by objective third-party information, such as government
agency fee schedules, academic studies, and independent private sector
surveys. Fee studies shall exclude assignments ordered by known
appraisal management companies”
Presumption #1
1. Recent rates in geographic market
2. Adjust based on factors:
• Type of property
• Scope
• Qualifications
3. Anti-competitive acts
6 items to consider when determining C & R fees
1. Type of property
2. Scope of work
3. Fee Appraiser Qualifications
4. Membership on professional organizations
5. Experience/professional record
6. Work quality
Customary & Reasonable Fees
Second Presumption of Compliance
1. Objective Third Party Info
2. Recent rates in geographic markets
3. Exclude compensations paid to appraiser by AMC
At NAN…
•Presumption #2
•“Cost Plus” approach
“You get what you pay for”
Costs associated with poor quality appraisals
1. Repurchase Risk
2. Time on revisions
3. E & O claims
4. Lawsuits
5. And more…
Quick Poll
Unacceptable
• Coerce, influence, misrepresent value
• Predetermined estimate of value
• Remove information
Acceptable
• Consider additional info about subject property
• Consider info about additional comparable properties
• Correct factual errors
• Address UW Conditions
• Clarify Items
Resolution of Deficiencies
• Acknowledge lenders request
• Ensure Accuracy
• Provide security to all parties
• Acknowledge and document end result
Ordering 2nd Appraisals
When is it ok?
• Unable to resolve deficiencies
• Loan Requirement
• Expired first appraisal
When is it not ok?
• Value Shopping
Joni Pilgrim
813-749-8849 - direct
Cristy Conolly
813-749-8842 - direct
Jennifer Graham
888-760-8899 x211
Learn more about NAN.
Email us today to receive a Video Introduction to NAN