AMCs Appraisal Report Reviews

AMCs Appraisal Report Reviews - Validox Appraisal Review DocumentAMCs are legally required to do appraisal report reviews…

Appraisers, an appraiser shared AMC appraisal report review documents with me, which the appraiser was given. I have not seen these before. See the PDF embedded below for an example.

Per state laws in the various states, AMCs are legally required to do appraisal report reviews per provisions of their state AMC license on up to 5% of the reports they process. AMCs must keep the results of those appraisal report reviews on file for a specified time period, and of course, send the review document to the client lender pertaining to the particular property appraised.

One company which provides a pre-printed review form by subscription to clients is Validox, LLC. You can see more about them on their website.

AMCs will either have in-house appraisers do the review, or else will contract review work out to appropriately licensed appraisers. Most states have laws saying the review appraiser must be licensed in the state where the appraised property is located. (This is one reason why AMCs retain a portion of the borrower-paid appraisal fee, or are separately paid by the lender.)

A challenge of this mandated review process is appraisers may never actually see the specific review, such as the attached example. Your work and the corresponding report can be judged either Pass (with possible incorrect reviewer comments) or Fail due to significant report issues alleged by the review appraiser (which may actually be true, or not).

What this boils down to is pretty simple: appraisers must exercise due caution when writing reports. Make sure all data is factually reported, and is consistent. Include all items that should be, and disclose why some items are not. Print the attached PDF and follow the USPAP compliance checklists so that your reports have everything necessary included.

And one final point: quit forcing report users and reviewers to ‘See Addendum’ for comments that can be included in the comment lines on the form pages. Put everything you can in those forms, before forcing page scrolling to the Addendum buried many pages later in the report. Most reviews are done on a computer monitor, not via hard copy printouts.

Dave Towne
Image credit flickr - Dawid Cedler
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on

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20 Responses

  1. Avatar Kimberly DeFilippis says:

    What’s the problem with “see addendum”? I don’t care if the reviewer is only working on a monitor and not a hard-copy of the report. The ease of the reviewer’s job is not my problem. If the reviewer is unable, or unwilling to see the addendum for vital information (why would the it be included on an addendum if its not vital?), then the reviewer is not qualified and the review itself would be misleading.

    • Avatar don says:

      Kim, a believable solution for critical situations is to use SEE TRANSMITTAL LETTER instead of the value statement on the 1004 form. The Addenda can be thrown out by the lender BUT the lender, or the AVM can easily hide the most important line of the 1004 form. Liberal use of the phrase (see addenda) may be UN popular, however it can be protective

      • Baggins Baggins says:

        Does mercury still use Sure Receipts? XML open source requirements leave the appraiser guessing. Once altered the automatic conversion tools have their copy of the final pdf looking as if nothing changed. Just for kicks you can open up an xml report in notepad or a browser and read it code style. Changing or omitting report data with xml is as easy as knowing where to locate the specific line entry. Through the review omission process people are trained how to do that.

        The most difficult fact of the matter pertaining to possible litigation is you’ll only be asked for true copy at the end of the line if something has already blown back. That is why I like redundant reporting, restating facts within form and on addenda. When statements are repeated and integrated into sentences differently, it gets a lot more complicated to try and change anything.

    • Avatar Michael jones says:


  2. Avatar SB says:

    Validox is a “Proud Sponsor of Valuation Expo” (HUGE RED FLAG)
    Pre Printed forms “by subscription”????
    Most reviews are done on a computer monitor, not via hard copy printouts???

    Just what I needed…
    another Cloud Based – Appraiser Surveillance and Data Theft tool….


  3. Taunya Richards on Facebook Taunya Richards on Facebook says:

    I disagree. I would much rather read an addendum than a form. Most appraisals need more information than what can be put in the form.

    If the reviewer is too lazy to print the report that is not the appraiser’s fault.

    • Avatar Bill Johnson says:

      As many of my reports have 8,000 to 10,000 words in them, the idea that analyze and explain can be done within the standard form is a fantasy.

      Of course if your competing 4 to 9 appraisals a day, I’m sure very little changes from report to report and thus canned comments will fit.

      Seek the truth.

      • Taunya Richards on Facebook Taunya Richards on Facebook says:

        I agree. I have no idea how anyone can do a USPAP compliant review in the amount of time they say it takes. That’s why I asked if it was a review or a QC check which is basically, “Did the appraiser put the right address, blah blah blah” which a computer can do.

        An appraisal review…how can anyone do these if they are 1) not an appraiser or 2) don’t read the addendum. I get exhausted writing, “It’s in the report…”

  4. Taunya Richards on Facebook Taunya Richards on Facebook says:

    Are these quality reviews or Standards 3-4 reviews?

    • Avatar Realrose says:

      If one does not have an appraiser’s license they are not held to any standards, but we know what we are supposed to do based on USPAP; the problem is we review and we call it a review appraisal and we must adhere to the Standards for reviews; if we conclude at a value we have to adhere to Standards 1 and 2, so often a review is very time consuming, and the non-licensed person doing their “review” is not held to any standards, and they don’t have to have experience appraising to judge someone’s work. This is the problem with the AMC model which has failed to add any value to the process!

      • Avatar don says:

        An appraisers written report includes the criteria, standards and rules to which we hold ourselves accountable. Our experience is cited within the report as an illustration to the reader of competence or lack thereof.

        Various organizations sponsor information, legislation and propose standards. We may or may not agree with some or adopt it all. There are several agreeing, or complimenting, and or promoting our chosen work-profession- or what ever.

        An appraiser is anything we chose so long as we are accepted in this litigious society!

  5. Avatar Koma says:

    Sorry but my reports contain more data than can fit within 8 lines or less in any section on any given form. You know what if your reviewing my report then you better read the whole report, however it’s transmitted, you know why cause that’s your JOB!

  6. Avatar Ralph says:

    The intended use and intended user is not some 3rd party AMC reviewer 15 states away, who cares what they think, not sure the point of this article, be as thorough as you can I guess.

    • Avatar Koma says:

      Like I’m sitting in front of the state board on every one ;{-)

    • Baggins Baggins says:

      It’s that there is a requirement for a certain proportion of all appraisal activity through amc’s to be subject to an administrative review by the amc company, or was that an ethically compliant review, one of the two. And because it’s a sort of quality control requirement that happens after the fact, the originating appraiser may not be copied into various conclusions. Lose your approvals based on a review you never even knew was happening and have no ability to object or answer to.

      The point of the story is don’t move to fast, once it’s signed and sent you can’t take it back and may not get the benefit of reactive review services. I like the front page index solution, then there is an additional page which details every report inclusion.

      Depending on what software you use, there may be more or less ability to adjust font size, text volume.

      Warning; The field is marked no, but there appears to be information entered. The logic behind the ‘review software tools’ needs revisited. When you get more warnings and a lower internal reviewer rating because you’re more thorough and fill everything. Newb reviewers are misled into thinking the appraisers whom speed fill the report with checkbox and quick list only data are actually providing lower risk reports, because they get fewer alert warnings. Underwriters and reviewers deal with long lists of checkbox review based on those alert warnings and have to answer all indicated alerts. A consequence of tech people whom are not qualified to complete appraisals, developing appraisal review software. Also reasons why form redevelopment is going to be an even greater disaster.

      When you sign the report, it becomes a legal document which binds the appraiser to scope of work compliance. Simply stated, when you deal with amc’s you deal with a lot more oversight as well as the need for expanded sow compliance. Direct may have audits too but they’ll be more inclined to focus on risk rating scores for bundled saleability, while amc’s seem to focus more on volume of internal review warnings. The things you end up learning the hard way because turnover of front line desk people is often high and they can not tell the appraiser what comes next.

      • Avatar don says:

        Lomas & Nettelton, a large mortgage house of the 1970’s, used two appraisals on every tenth loan. This met the FNMA 10% review requirement. Things were simpler then! They also met their poor housing criteria when they REFINANCED their own foreclosed resales within the troubled neighborhoods. I ran into these occasionally in my territory. They had the affect of supporting prices

  7. Avatar SB says:

    I want to know…
    Who’s reviewing the credentials of the reviewer????
    Who’s reviewing the competency/experience of the AMC’s management team????
    Who’s reviewing the credit worthiness of the AMC paying appraisers ????
    How many lender clients has the AMC lost in the past 12 months because they hired Skippy???

  8. Avatar Diana N says:

    They run the reports through their machines and their software can’t read the reports. I got one kicked back with 29 revisions, Not One of them was accurate , everything asked for was already, correctly entered in the report. So tired of this BS.

  9. Avatar Douglas Kues says:

    I have had many reports sent back for clarification when the reviewer has failed to review. Largely based on the 16 or so Scope of Work pages that cover the bases for the hundreds of different AMC guidelines we are subject to. Almost without exception, we are able to direct them to where in the report they missed what they are looking for. The most fun, recently, was an AMC reviewer that rejected a report because of the length of the Scope of Work and the use of the word “if” too many times in my report. I calmly pointed out that their guidelines had more pages than my report, and that the word “if” showed up in their guidelines 35 times. Would have been happy to modify my report “if” they agreed to shorten their own guidelines to a product specific and reliably accurate order request for the assignment. They of course could not do that because they need to address all possible products and appraiser responses in each assignment order. I respectfully respond that my reports and the 16 or so Scope of Work pages are an attempt to do the same thing.


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AMCs Appraisal Report Reviews

by Dave Towne time to read: 2 min