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Appraisal Compliance – Required Procedures    
April 27, 2023
QUESTION
We revised our appraisal management policy. Our banking department told us it should include both required and Best Practices. We do not know much about the Best Practices involved in appraisal management. 

Last year we got approved by Fannie Mae, and yesterday we received their MORA letter to come here and do an audit. I think we're unprepared for the appraisal management policies and procedures. 

Our main concern involves the required procedures. We appreciate your response. Thank you! 

What are some required appraisal management procedures for an appraisal management policy?
ANSWER
Your Appraisal Management policy and its references to Appraiser Independence Requirements (AIR) should contain a checklist to support your self-assessment. I will provide a responsive but not necessarily comprehensive reply because these aspects of appraisal compliance are somewhat vast. You can contact me here to discuss your concerns or retain us to review your Appraisal Management policy. 

Indeed, it is the case that many state banking departments and the GSEs expect companies to conduct self-assessments. If you've been following my articles, hopefully, you have noted my descriptions of the importance of these self-assessments. 

There are many required self-assessment criteria relating to appraisal compliance. When we conduct an Appraiser Tune-up®, we consider these criteria. We also consider many recommended or Best Practices criteria in our evaluation. Required assessments and Best Practices should be part of your Appraisal Management and AIR initiatives.
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What are the four factors of
Board and Management Oversight
of a
Compliance Management System?
Commensurate with an institution’s size, complexity, and risk profile, when evaluating Board and Management Oversight, examiners consider these four factors:

  1. oversight and commitment;
  2. change management;
  3. comprehending, identifying, and managing risk; and
  4. corrective action and self-identification.
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