By: George Denman

Managing Compliance: Best Practices for Appraisal Management

When it comes to appraisal management, it’s pretty safe to say that rapid and continual changes are the only constants in our industry. That fact alone doesn’t really give us a strong foundation for quality control. But with effective practices, it is possible for company leaders and their teams to adapt and perform competitively on a consistent basis.

How an appraisal management company manages compliance is critical information to financial institutions, lenders, servicers and investors. In fact, they’ll want to know about compliance management way before making any decisions on which third-party collateral valuation provider they might choose as a partner. Oftentimes, a brief summary of your company’s practices just won’t be enough. You’ll want to be able to detail your best practices as they apply to multiple interfaces.

When managing compliance and quality control, many appraisal management companies mistakenly focus on solving the wrong problem. Instead of trying to keep up with new guidelines and requirements, your organization should focus on implementing its own process – better allowing you to be agile and flexible within your own company’s barriers.

That being said, here are the top practices for managing compliance that your company can adapt and transform into its own.

Think state, and then think beyond

As you very well know, all appraisal management companies have a set of rule and regulations to follow – at both the state and federal levels. A misstep on any one of these regulations could carry hefty penalties for the appraisal management company. Compliance is more or less synonymous with adherence, so it is important to set clear boundaries in terms of correct practice and process:

  • At the state level: Though they may vary from state to state, rules and requirements mandate compliance with the Appraiser Qualifications Board of The Appraisal Foundation. These rules establish the education and experience requirements for appraisers to qualify for state appraiser licensure or certification. Always be familiar with your specific state’s requirements.
  • At the federal level: Federal requirements include the:
    • Financial Institutions Reform
    • Recovery and Enforcement Act of 1989 (FIRREA)
    • Rules handed down by the resulting Appraisal Foundation
    • Uniform Standards of Professional Appraisal Practice (USPAP)

Just as you must familiarize yourself with the state compliance regulations, it is just as imperative to know the federal stipulations.

Check the details before diving in

Quality and compliance begin with the appraiser. It is important to select the correct person for the job – someone who is sure to pay the attention needed.

As a rule of thumb once the appraiser is assigned to a client, profile each order and subject property. Review the specific aspects in order to match the account with the most appropriate vendor using. Finding and maintaining a balance of appraiser placement and manual observing on a project-by-project basis will further allow your company to properly assign future projects on a wider scope and for almost any property.

Always communicate with the client

At Oxford Commercial Appraisal Management, our clients are able to track the status, deadline, and progress of every order to help ensure that proper targets are being met via secure access on our client database. It keeps our clients in the know every step of the way.

The same goes for monitoring on our team’s end. Each order (and every step of each order) is also reviewed by our team members, who pro-actively monitor absolute compliance, target milestones and communicate with the client and involved parties. Remember – communication is always key.

Check, double check, then check some more

We don’t mean to sound redundant, but it’s the most important piece of the compliance management puzzle. Yes, it is important to monitor every step of the process. But even after the process is complete, it’s important to check off your observances. Once an appraisal passes automated/manual, staff and client reviews, consider sending it through an additional inspection. Hey, time is precious, but accuracy is an even more valuable measure.

After all, it will also allow your client to rest assured knowing their order has gone through with 100 percent accuracy.

Organize internally

Many of the largest appraisal management companies have implemented a process for efficiently deploying their compliance management process from the appraisal desk.

Creating and communicating a set, organized, and known organizational work flow will not only increase efficiency, it will also open the door for future automation processes to ensure compliance and consistency. If your software includes compliance defenses, you lesson your risk of human error that may arise throughout the assembly line.

Make the move to a single platform

As mentioned above, we offer a seamless database that is accessible to our clients, vendors, and appraisal staff. By managing all of your orders and clients on a single platform, you open the door for streamlined management, further ensuring compliance on the level of:

  • Fed/state regulations
  • Third party errors and due diligence
  • Eliminating unnecessary burdens of using multiple vendors’ web portals
  • Ensuring borrower payments are handled in compliance
  • Comparing vendor performance in compliance with regulations
  • Most importantly: consolidating compliance control, ensuring consistent practices

Follow the Oxford example

The experts at Oxford Commercial Appraisal Management are always staying up to date on the latest industry trends, changes, and best practices. But what keeps us consistent is our company’s universal, internal processes and the procedures we dedicate to in order to maintain compliance.

Across multiple interfaces and jurisdictions, compliance management could very easily spiral out of control (didn’t we mention that rapid and continual changes are the only constants in our industry?). But when you embrace those changes, and implement a set of best practices that are easily adaptable to changes, the burden becomes much less. Effective compliance management is possible as long as you and your team are dedicated to maintaining it.

Want to learn more? Contact the experts at Oxford Commercial Appraisal Management. We’re always on hand to share a little bit more about our processes and how they have proven successful across our staff, clients, vendors, and beyond!

 

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