Increase Your Profits
In today’s real estate market, anything that increases efficiency and lowers costs would seem to be a good thing. AMC’s (Appraisal Management Companies) are capable of doing just that and more. This is one instance where outsourcing seems a good idea and streamlining for lenders services makes sense for everyone in the loop.
Mortgage lenders typically have high overhead operations and anything they can do to pare some of this down will obviously add to their bottom lines. Some companies have their own staff of appraisal officers and handle these tasks in-house but this has been shown to be a more expensive option than outsourcing to a company specifically oriented to doing real estate appraisals. It’s also a proven method of curtailing collusion and appraisal fraud which has been a factor in the real estate mortgage business.
Separation of the businesses of lending and appraising removes the opportunity and the temptation for the unscrupulous to fool with the numbers. It also encourages competition among appraisers and absolutely holds down the steadily rising mortgage fees charged to consumers. It’s definitely a win/win situation for all except those appraisers who have gotten comfortable with the way the job has always been done in the past.
Appraisal Management Companies (AMC’s) are business-to-business concerns and, since not catering to the general public, are not well known by most people. They are, however, becoming more and more popular among lending institutions for several reasons. Here are a few of the chief factors. As previously mentioned, outsourcing appraisals helps in reducing fraud between appraisers and the lender’s salespeople. The regulators like this kind of set-up because it’s so much more transparent. It also saves everyone money because it reduces losses.
Lenders who have high overhead are typically less efficient at appraisals than companies who specialize in this area. Lenders are experts in lending, not appraising. Plus, when justifying the amount of closing costs charged a consumer it’s simple and less hassle to be able to just pass along the charges incurred from an outsourced AMC.
Large AMC’s will employ a vast number of independent appraisers, both regional and nationwide. They’re responsible for hiring verified, licensed professional appraisers and for overseeing every facet of the appraisal process from start to finish. They take a lot of the pressure off of the lending company’s management staff and save them money and time too. It’s a good example of how streamlining for lenders services can benefit all concerned.
