Appraisers are wondering what all the fuss is over Third Party Oversight and what it means to them. Appraisers are just now beginning to feel the impact of the demands of fee panel management. I know this will date me but I do recall the days when it was a challenge to get placed on an approved appraiser list. The process was onerous. I likely didn't appreciate it much then but surely I reminisced about the good ole days after that process fell apart and the only vetting process involved inquiries as to my fees and turn times. Now we have come full circle.
All of the regulations and guidance are in harmony over the issue of engagement of the best appraiser. What you won't find in any of the guidance is a prescription of what fee panel management entails. Each lender is required to establish their own policies and practices to demonstrate their intent and implementation.
It was rather serendipitous that the OCC announced their Third Party Oversight Bulletin while on a panel at our CRN (Collateral Risk Network) meeting on October 30, 2013. Everyone was immediately searching their smart phones for the bulletin. I considered jumping up and kissing the regulator but thought better of it.
Peter Christensen, LIA Administrator's General Counsel and Tony Pistilli, of Axios Valuation Solutions and I collaborated on a white paper on Third Party Oversight that we began over a year earlier. We had no special inside track. We just knew it was coming. It was palpable. There were a lot of events leading up to that bulletin that necessitated the need for clarification from regulators. The white paper on Third Party Oversight may be downloaded here.
Please keep in mind that this white paper was written before the OCC Bulletin was issued. What we did within this paper is to reference the documents that affect each topic within Third Party Oversight. Many of the guiding principles about proper due diligence of vendors have been around for years. So there isn't much new, just renewed focus on the vetting process.
We used this paper as the foundation for a summit we held last year and again this past Spring. On November 4, 2014 at the Capital Hilton in Washington, DC we will be offering another session on compliance with two very important topics Fee Panel Management and AMC Audits.
You can register for this event here. You do not need to be a CRN member to attend this event. This event is primary focused on an AMC and lender audience. Appraisers are welcome to attend but simply reading the white paper might be the easiest way to gain an understanding on the drivers behind new requirements and expectations by your clients and prospects.
At this next event we are pleased to add a new presenter to the topic of AMC Audits, Gary Deutsch. Gary is a CPA and has an MBA in finance from Loyola University Maryland.He has extensive risk management and internal audit experience through his association with financial institutions of all sizes as well as through his role leading the KPMG financial institution consulting practice in the Mid-Atlantic region.
AMC Audits is a topic of importance to all stakeholders- AMCs, lenders, and regulators. State regulators are responsible for the registration and oversight of AMCs. AMCs must understand what is necessary to comply with State regulations as well as with Third Party Oversight by the clients. Lenders of course must oversee the activities of the AMCs they engage. We are way out front on this issue.
Fee Panel Management is my favorite topic. And there is nothing easier that can be done to immediately impact the quality of appraisal reports than engaging the best appraiser. It really is that simple. “ The appraiser selection is the single most important part of the appraisal process” according to the OCC. AMCs who can assure their clients that they have best practices for appraiser selection will grow and prosper.
Stay tuned for some informative webinars on compliance issues that affect appraisers. There really is a “call to quality” which is great news for appraisers.
Joan N. Trice is the founder and CEO of Clearbox, LLC, publisher of Appraisal Buzz, and host of the annual Valuation Expo, the largest conference for the valuation community. Joan also hosts the Collateral Risk Network, a members-only group of more than 300 dedicated chief appraisers, collateral risk managers, regulators, and valuation experts who are focused on resolving the many challenges facing our profession.
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