Many companies do not tend to have a comprehensive understanding of appraiser independence. They think of it as a compliance issue, meaning a regulatory matter. But it is much more. There is a view that adopting policies and procedures is a sufficient resolution, but there is hardly much implementation monitoring.
Appraiser independence, when done correctly, can prevent appraiser coercion.
You should be monitoring appraiser independence – whether appraisers are staffed, individually retained, or in an Appraisal Management Company (AMC). If you were to have been doing such monitoring, you might have caught the appraiser coercion issues and corrected them. You could have conducted the review internally or used our firm to provide the Appraiser Tune-up. Either way, the decision not to monitor was irresponsible.
Keep this in mind: appraiser independence covers a broad range of appraisal rules, such as the ECOA appraisal rule. There are many dimensions to ensuring that appraiser coercion is avoided. I will provide a brief list that should help you prepare appropriate procedures. But, remember, without monitoring, your procedures are no more than useless pontifications.
