July 31, 2017
Orion’s experienced brokers are great about educating their borrowers about the loan process. Included in that is obtaining an appraisal. One of the changes in the mortgage industry in recent years was federal policy that prevented lenders from directly ordering appraisals, and to take it a step further preventing us from have any direct contact with an appraiser.
As a result, Appraisal Management Companies (AMCs) became the source and conduit for all appraisals and communication. Loan officers and brokers cannot select appraisers directly, and the appraisal process is designed to eliminate undue influence in property valuations, hence the inability for mortgage loan originators (MLOs) to directly contact an appraiser.
Borrowers typically have their property information entered into the AMC’s website, along with who to contact for access to the property, payment information etc., and an order is created.
At this point the AMC needs to assign an appraisal. Most often this occurs by contacting the next appraiser on the list who is registered to work in the area where the property is located to see if they are available; if the appraiser is unavailable or non-responsive in a short period of time then the next appraiser on the list is contacted and so forth until the order is assigned.
When the appraisal report is completed it is sent to the AMC who completes an audit and quality control of the report-note this is for compliance and completion of report issues and not for valuation. Once the audit is completed, and the report is found to comply, it is placed into the application package.
At this point we go through the appraisal to primarily check the value and then to see if there are any items that must be completed. After reviewing the report, we provide you with a copy and let the real estate agents know if the value is sufficient for our transaction (meaning at or above sales price), if the value came in below sales price and if there are any corrective issues that need to be completed at the property before we will be able to get final loan approval.
Assuming all is correct with the appraisal, Orion moves on with processing, approving, and funding of the mortgage so our broker’s client can move into their new home.