Panel: Lenders, Not Vendors, Responsible for Accurate Appraisals

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This is probably a good idea. Lenders should be held accountable for the people they choose to use in the course of their business. For a more detailed look at this subject – please read the article below.

The FHA Condos Approval Company, Inc.

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A recent bulletin from the Office of the Comptroller of the Currency (OCC) recommends new guidelines for national banks and federal savings institutions regarding their third party vendors, including appraisal management companies (AMCs). Banks and mortgage lenders are cautioned to choose their appraisers and other vendors wisely, as regulators will hold lenders accountable of the quality and accuracy of their vendors’ work.

Concerned about the increasing reliance of financial institutions on third-party vendors for critical tasks, theOCC stated that it “expects more comprehensive oversight and management of third-party relationships that involve critical bank activities.” The OCC bulletin, “Third-Party Relationships: Risk Management Guidance,” laid out steps lenders should take to manage risk with their vendors. These steps included:

Performing proper due diligence in selecting a third-party provider.

Conducting ongoing monitoring of the third-party’s activities and performance.

Maintaining property document and reporting.

Conducting independent reviews of the risk management process.

The OCC said it will pursue enforcement actions to address violations of the law and unsafe practices by the lender or its third party, and has the authority to assess special fees against lenders when it finds transgressions in the activities of their third party providers.

To read the complete article – please use the link below.

Accurate Appraisals

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