Article: ENSURING INDEPENDENCE
BY MICHAEL DRESDEN, PRESIDENT, DART APPRAISAL
This article originally appeared in theMReport, March 2017
A fundamental requirement of loan origination and mortgage lending is that the appraisal process must be absolutely independent from anyone who is responsible for generating loan volume or who stands to financially benefit from the funding of a loan. Also, the appraisal must not be influenced by anyone responsible for ordering, reviewing, or accepting appraisals and evaluations.
While appraisal independence has always been integral to the mortgage lending process, today’s emphasis on this principle derives from and is now governed by a complex cascade of legislation and standards brought forth since the financial crisis of the last decade.
Most importantly, our organizational structures, systems, and documentation must ensure appraisal independence, further supported by the way in which lending institutions and their strategic partners conduct themselves in a practical, real-world sense.