Appraiser IndependenceIndependence of the expert
carried out in the context of a sale in which a party having an interest in the subject matter of the sale indemnifies, compels, blackmails, collides, orders, causes, corrupts or bullies a party, valuation society, business or other body carrying out or participating in the valuation, any attempt to indemnify, compel, blackmail, collide, order, cause, corrupt or frighten such a party in order to ensure that the value attributed to the property in the expert opinion is due to a different element than the expert's opinion;
Things you should know about the evaluator's independence
A well-founded and documented form of comunication is required. Adherence to the independence of the peer review must be verified by a thorough documentary evidence covering all notifications during the peer review procedure. This will prevent those who could profit economically from the mortgages from affecting the assessment as well. Who can profit from the financial aspect of the loan: ordering, awarding, evaluation, approval and evaluation must not affect the evaluation as such.
When an appraiser is referred by a borrowing party, the appraisal procedure can be regarded as affected. Autonomy should not be theoretic, but should be implemented by the whole organisation. The evaluation of the appraiser's independence should involve an audit of the credit authorisation procedure, which will identify report guidelines, voucher flow and points of reference between the appraiser and the superior.
Independence should play an important role within the organisation and should be monitored and debated on a regular basis by the Board of Directors and the employees of the CCR. Lenders' commercial structures should be designed to meet independence needs. One of the keys to compliance with the Appraisal Independence Requirement (AIR) is the lender's organisational set-up. A conforming organisational set-up ensures that the CRO" is located" between" the respective counterparties.
Appraisal employees should work under the leadership of the Managing or Credit Committees and should not have the same relationship with the CFO as home or business loans clerks. Appraisal processes should help to prevent the customer and the appraiser from violating the regulations. The AMC is responsible for reviewing and assigning the assessor a database basing on service, closeness, geographic competence and accessibility, while the assessor is protected from communicating directly with the customer and protects the customer from possible violations of regulatory requirements.
Letter of assignment to an expert usually indicate that communications should take place both on the customer side and on the expert side via the acknowledgement of the expert, so that the independence of the expert and the confidence of the general public are maintained. The organisational structrure of the ARC should guarantee and preserve independence. The organisational and documentary framework of AMCs must guarantee the independence of peer review, backed up by the way credit institutes and their policy makers behave in practice.
Certain AMC' s are more concerned with complying with the regulations than others. An award is given to those who know and retain the independence of evaluation and who monitor their panellists carefully, have a great technical base and resource and are dedicated to complying with regulations. A number of bodies, legislatures and directives draw up the appliance independence requirements.
Emerging from the most diverse issues are today's appliance independence requirements: state-sponsored companies (GSEs) such as Fannie Mae and Freddie Mac, state licenses and AMC supervision, appliance licenses, Swiss law and regulations, and the legal mandate of the Consumer Financial Protection Bureau. Minor creditors are not exempted from the independence requirement. While smaller creditors have fewer personnel and may find it more challenging to be fully self-sufficient, they must nevertheless show that the verification of securities or the granting of mortgages is insulated from the impact.