Lenders face considerable challenges managing their in-house panels in the current mortgage environment. AMCs offer solutions.
Today’s mortgage environment has inspired lenders to look at opportunities for efficiency gains. This includes shifting from self-management of appraisal services to working with an appraisal management company (AMC) that provides access to technology, transparency, financial strength and stability, customer service and expertise. This shift allows lenders to reduce annualized costs, while preparing for the future of the industry.
We asked industry expert Matthew Woodhouse, managing director, origination valuation, about why AMCs are important and how they can benefit you.
Q: How can lenders benefit from working with an AMC?
Lenders want to be free to focus on their core competencies right now. When they realize that an AMC can provide a strong team to manage risk and compliance, technology that elevates the customer experience, and a deep focus on performance and quality assurance, they start to look at their own processes and overhead in a new light. Working with an experienced, financially-sound AMC with a national footprint can lead to improvements in a variety of areas.
Q: How can an AMC support regulatory compliance efforts?
Keeping up with evolving statutes, regulations and industry standards requires an extraordinary level of diligence and investment. National AMCs can dedicate resources to these issues at a level few lenders can match. As an AMC, we have the ability to constantly invest in compliance measures. Our clients rely on us not only for compliant appraiser selection and management, but also for developing and implementing technology, systems and protocols to address a whole host of compliance needs. We are always poised to respond quickly to regulatory changes and to incorporate new lender-driven requirements, policies and procedures.
Q: How can lenders ensure qualified appraisers are working on their orders?
Since the lender is relieved of the responsibilities and overhead related to maintaining and managing the appraiser panel when the AMC assumes responsibility, it’s important to ensure a qualified appraiser is assigned to each order. AMCs need to go the extra mile in vetting these individuals. At ServiceLink, we have standard policies requiring E&O [errors and omissions] insurance, plus state and federal background checks for all our appraisers. We invest in sophisticated score carding to help us monitor performance levels and ensure that a highly qualified appraiser with the requisite skills and experience is selected for each appraisal.
Q: What are the advantages of an AMC that invests in technology?
The best AMCs tend to be on the leading edge of technology. Since their solutions are built on technology, they make ongoing, sizable investments into its development and implementation, and they partner closely with lenders, to address immediate needs and to anticipate emerging challenges. We can provide lenders and consumers alike with an exceptional digital experience because our clients across the country share their insights into what they want and what their customers expect from a technology perspective. We identify trends that might take an individual lender a little longer to see and help them keep their solutions ahead of market-and quality-specific challenges.
Q: How does the use of real-time scheduling change the process?
Real-time scheduling makes the process more efficient as there’s less back and forth. ServiceLink’s industry-leading scheduling platform provides consumers, loan officers and real estate agents with increased convenience and transparency. No more phone tag or delays — the user can select an exact appointment date and time, receive instant confirmation and have the assurance of knowing who’s coming, because they immediately receive the appraiser’s name, contact information, photo and car make and model. All of this adds to the lender’s credibility as a partner focused on customer satisfaction.
Q: How do AMCs provide scalability and expertise?
Partnering with an AMC allows for frictionless adaptation to changing volume – without changing operating expenses or operational structure. Because AMCs manage volume from lenders around the industry, we have built scalability into our capabilities. In addition, this deeper pool of talent offers a wider range of knowledge. Working with 15 or 20 lenders in a particular market gives our appraisers greater insight into that market. Factor in their expertise in specific property types and value ranges, and you can see the benefit to lenders of having a panel of this scope working for them.
Q: Why is scope of reach important?
Before you engage with a particular AMC, it’s important to know whether they have the scope to support your strategic plans and grow with you. Some AMCs are registered to do business in only one state or a handful of states; very few have the financial strength, stability and technology to operate successfully as an AMC in all the various jurisdictions that require registration.
If you are seeking support with a certain property type or value range, ask to see how the AMC has performed in these areas and what level of expertise they have. If you’re looking to work more broadly with an AMC, asking questions about their expertise and capacity in a variety of markets will help you gauge their ability to manage your entire clientele.
Q: What should you look for when assessing your AMC’s customer service?
Though AMCs are often embraced for their innovative technology, they should never lose sight of the human element — i.e., the lender-AMC relationship. When you have a question, a concern, a challenge or an opportunity you’d like to discuss with your AMC, do you know who to ask for? What depth and speed of service can they and their support team provide?
Engage with an AMC that delivers outstanding customer service, including a dedicated, collaborative relationship manager and a customer service team that’s eager to resolve your issues as quickly as possible. Remember: You are the customer. That means your needs should always come first.
Now, more than ever, it is in the best interest of lenders to protect themselves by partnering with an AMC that has a robust, dedicated compliance team facilitating seamless third-party oversight.
Q: What is important to consider when selecting an AMC partner?
Simply using an AMC does not automatically guarantee compliance, tech expertise, cost savings, etc. Selecting an AMC to adhere to that commitment is the lender’s best course of action. How do you know which AMC to choose? Start by making sure that they’re experienced and stable, can operate in the footprint where you do business and are agile and committed to compliance. Then talk through your specific goals with them to find your best fit.
Back in 2007, there may have been five of us AMCs; now there are about 600 — a lot of which are small or micro businesses. It is incredibly important when you evaluate an AMC to look at the company’s history and stability. ServiceLink has been a pioneer in the business for several decades, and we have unfortunately seen a lot of less experienced AMCs shutter their operations overnight. It’s important to look for an AMC that has built up a level of financial strength that allows it to stand behind its work and come through for its clients in any situation.
