Tuesday, September 26, 2023 | The Latest Buzz for the Appraisal Industry

Making New Year’s Plans: Operational and Regulatory Compliance for AMCs

Go into this new year knowing exactly where you stand with your compliance processes. Whether you’re an AMC, a chief appraiser, or compliance staff – this is the year to focus on accuracy. Join us for our free upcoming webinar on January 24th at 2 pm ET, “Making New Year’s Plans: Operational and Regulatory Compliance for AMCs.” Watch our hosts Joshua Walitt, Pam Teel, Wes McDaniel, and Chris Shoemaker discuss all things compliance for 2023.

Buzz: What is your background in the industry?
Joshua Walitt: Before I became an appraiser, I was in retail branch banking, but wanted something different. So, like many other appraisers, I learned of appraising from a friend. He trained me. While I was at his firm, it was acquired by a company that had an appraisal firm arm and an AMC arm. I agreed to stay on as a field appraiser and then became their compliance manager over time. By the time I left that company, I had moved to the position of VP over compliance and operations. The knowledge and expertise I gained as a compliance, regulatory, training, and operations specialist have been invaluable in serving my clients at Walitt Solutions.

Buzz: What type of company is Walitt Solutions?
Josh: We have quickly become a resource for appraisal firms, appraisal management companies, education providers, and regulators, on a contractor basis. I like to say Walitt Solutions is a puzzle piece for clients – our consultation services look different from client to client because they all have different needs, or gaps, in their organization. We provide services to AMCs large and small, whether due to changes in staff, expansion of their footprint, or concerns over client and state requirements; it is in everyone’s best interest that all parties in the valuation space operate smartly and correctly. In some cases for AMCs, we have gone in and reviewed (or created) their suite of policies and procedures, in others we have provided initial or ongoing training and registration renewal support, still in others we work on special projects or have monthly resource meetings with their leadership to problem solve. Our team does not insert itself in any pre-determined way; we listen to what the client needs.

Buzz: What can AMCs expect to see in this new year?
Josh: I would say we should expect to see more change this year. It’s not surprising – change is life! But at the same time, it will be more of the same top-of-mind issues the profession has already begun to address, hopefully moving forward on the issues. Right now, I think of this as a “spaghetti on the wall” moment – the valuation space is changing and there are many solutions being thrown against the figurative “wall” to see what sticks – what works for the appraiser and what works for the client?
Desktops are not going away, but we’re beginning to see more a standardized process. We have had desktops and hybrids for decades, but now clients are looking to have a more consistent process – essentially, we’re seeing the emergence of a new “flavor” of desktops and hybrids from the client side.
Technology will undoubtedly continue to advance the valuation space. When I say “technology,” I do not mean merely scanning and remote inspection technology which tend to be the hot button “tech” being discussed, but we’re also seeing the proliferation of more and novel analysis tools that help to streamline the valuation process itself, but keeps the valuer in the driver’s seat. We continue to help clients of all types in streamlining the inspection, analysis, and reporting processes.
The reconsideration of value process, although already ingrained in federal and state regulations, continues to draw attention. This impacts nearly every party involved: lender, appraiser, AMC, public, agents, and others. What we’re seeing is that some AMCs and lenders were doing it right, but others were not (or perhaps had no concrete reconsideration protocol in place).

Buzz: What exactly is the focus of AMC compliance?
Josh: The two key pieces for compliance are people and processes. You need people with the know-how and then you need to carry through on the obligations imposed by states, clients, and best practice. Topics we discuss with AMC clients – which we’ll touch on during the upcoming webinar – include registration and renewal processes, valuation independence, compensation, vendor engagement, quality control, security, and training. Each topic seems simple enough at a glance, but when you make a deep dive, you find there are many nuances to navigate.
Without coming up with an annual plan, AMCs risk ignoring important aspects of complying with expectations and regulations. That’s why we’ve found AMCs that lay out an annual plan early in the year tend to have better success in a more efficient and cost-effective way. Catching up later or having to answer to a client or regulator regarding non-compliance is never easier nor cheaper than planning and carrying out an annual plan of attack on all elements. Our webinar on January 24th proposes a basic layout for an annual plan and digs into details of a few aspects of AMC compliance.
Someone once said, “If you don’t like the cost of compliance, you won’t like the cost of non-compliance.” What we’ve found is that being proactive is always more cost-effective than answering for your mistakes later. Not only does having an AMC Compliance Plan help protect from costly violations, it also leads to greater efficiency which is also key to any bottom line.

Buzz: How can AMCs become more efficient in their day-to-day operations?
Josh: In short, AMCs need to have daily, weekly, and monthly goals to achieve their annual plan. For example, it is not enough to simply say annual training will occur on three or four broad topics. Will the training delivery vary by topic? Are those meetings and training sessions scheduled with a syllabus that meets requirements? Will it be the entire staff at one time, or will the training be spread out over two or three months’ sessions?
Another key to efficiency is having the right people on your team. Especially with companies cutting staff right now, one valid concern is that institutional knowledge within that company is hugely reduced. If people are cut, how will their expertise-vacuum be filled? It seems common sense, but there is not always a plan for how a company will address staffing changes and reductions, especially with something as critical as compliance, which directly impacts continuing to serve clients and even continuing to operate with a state registration.

Buzz: Why should people attend this webinar?
Josh: The topics on the webinar are important to parties across the spectrum – regulators, appraisers, and of course AMCs. Executives, upper management, and other key persons at AMCs know the seriousness of addressing compliance requirements. There’s not an AMC out there that has not faced a 200-question due-diligence process with their lender client, only to realize certain requirements are not being met by their company. (I’ve taken those phone calls and addressed rush solutions!) Taking an hour to hear subject matter experts discuss how to plan to address key issues is invaluable.

Make sure to join us for our free upcoming webinar on January 24th at 2 pm ET, “Making New Year’s Plans: Operational and Regulatory Compliance for AMCs.” Can’t make that time? Sign up to receive the recording directly in your inbox!