FAQ – Appraiser Independence Requirements – AMC Selection

August 31, 2023 BY MQMR Blogger

Question: May a Fannie Mae approved mortgage lender permit a mortgage loan originator (MLO) or mortgage broker to choose the AMC from a list of its approved AMCs from which to order an appraisal?


No, permitting sales and production staff to be involved with appraisal ordering violates Fannie Mae’s Appraiser Independence Requirements (AIR). AIR indicates “[t]here must be separation of a Seller’s sales or mortgage production functions and appraisal functions. An employee of the Seller in the sales or mortgage production function shall have no involvement in the operations of the appraisal function” (emphasis added). Selecting the AMC constitutes having involvement in the appraisal function and provides the MLO/broker with an element of responsibility for selecting or retaining the appraiser.  

Fannie Mae’s AIR FAQs read as follows:

  1. May a lender order an appraisal by directing a broker to select an AMC from among a group of specifically authorized AMCs, one of which would receive information from the broker about the loan application and begin the appraisal process?

No. Such a process would give the broker an element of responsibility for selecting or retaining the appraiser, and therefore would not be compliant.

A lender may direct a broker to an authorized AMC if the lender has previously arranged for its appraisal process to be managed by the specifically authorized AMC. This process is compliant with AIR because the broker is not responsible for selecting, retaining, or providing for payment of compensation to the appraiser.