Gregoire calls for more oversight of appraisal management companies

Frank Gregoire

Frank Gregoire, the former chairman of the National Association of Realtors, said during a Thursday House hearing that the lack of oversight of appraisal management companies has contributed to the slow housing market recovery.

AMCs act as liaisons between lenders and buyers and employ appraisers, charging a fee for their services. Gregoire said that AMCs often compromise appraiser independence by imposing reporting restrictions and stringent requirements.

“Appraisers are facing undue pressure by AMCs to complete appraisals using distressed transactions as comparable sales, to deliver completed appraisal reports faster and do a greater scope of work for a lower fee than a competing vendor,” Gregoire said, RealEstateRama reports.

Gregoire said that the accurate reporting of property values is essential to reducing risk, strengthening the housing system and improving market performance.

“As the leading advocate for housing issues, realtors know that an accurate appraisal is an important part of the home buying process and that a strong and independent appraisal industry is critical to restoring faith in the mortgage origination process,” Gregoire said, according to RealEstateRama. “There are many challenges currently facing the appraisal industry, and we see appraisals as one of the most crucial and overlooked aspects in the recovery of the real estate market.”