Over the last month or so, we’ve noticed an increase from LOs and Branch Managers asking that their appraisal order be assigned to a specific appraiser. It’s surprising how often we have to explain to a lender why we can’t do this.

The Dodd-Frank Rules of 2010 included Appraiser Independence Requirements (AIR) that say, in part:

The Seller or any third party specifically authorized by the Seller (including, but not limited to, appraisal companies, appraisal management companies, and Correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The Seller will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third party (including Mortgage Brokers and real estate agents).

This means that if a lender requests that we use a specific appraiser for a particular property, and we do so, we would be violating the law. Obviously, we’re not willing to do that.

On the other hand, just last month we wrote that lenders outsourcing appraisals to us can continue to use their preferred panel of appraisers. This is true. Lenders can request that we assign an order to someone in their trusted group of appraisers - they just can’t request a specific individual. This helps ensure that everyone is compliant with the law.