Appraiser Background Checks-The Future of Appraiser Vetting?

Aside from compliance, appraiser background checks are the hottest and possibly most controversial topic in the industry right now.  I’ve attended both the Five Star Conference and the Mortgage Bankers Association (MBA) 100th Annual Convention and Expo recently where this topic was at the forefront of many discussions.  Among the many points addressed:

  • Is this necessary?
  • Does this intrude upon appraisers rights?
  • Will this produce more quality appraisals?
  • Who is responsible to ensure appraisers pass a background check?
  • Will this help to rebuild public trust in the appraisal practice?

At Nationwide Appraisal Network, we are taking all of this into consideration.  According to the Appraiser Qualifications Board (AQB), background checks are necessary.  Effective 2015, the AQB is requiring background checks by state regulators be given to applicants for new credentials.  This is helpful for any new appraiser entering the profession, but what about all the appraisers already licensed?  This is where background checks as part of the AMC vetting process comes into play.  Lenders are following the AQBs lead and most will require background checks for appraisers who complete reports for them.  Outrageous!  That’s the initial reaction I’ve heard from most appraisers.  Now appraisers are being personally scrutinized and will need to pay to prove they’re trustworthy?  That is an understandable reaction.  However, once you take the time to understand why appraiser background checks are being implemented, it just might make some sense.

USPAP states that “the purpose of the USPAP is to promote and maintain a high level of public trust in appraisal practice.”  This is one more step in the direction of rebuilding the public trust in this recently highly scrutinized profession.  Ultimately, the lender is responsible to protect the consumer.  When a lender utilizes an Appraisal Management Company (AMC), the AMC is responsible to ensure the lender’s compliance and safety.  As such, both lenders and Appraisal Management Companies must be able to confidently use appraisers whom they know can be trusted in the home of the consumer.  Would you want someone with a criminal history to enter your home without your knowledge or consent?  Remember, it’s the lenders and the Appraisal Management Companies who are selecting the appraisers, not the consumer.  It is our responsibility to ensure the consumer is not put at risk due to a lack of diligence when approving and selecting an appraiser.

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