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PROVEN TO INCREASE ACCURACY, REDUCE LOSS, AND IMPROVE FORECLOSURE & LITIGATION PERFORMANCE Oversite Data Services is the leading national provider of innovative docket based legal compliance and management solutions for today's dynamic mortgage industry. Our patent pending solutions empower mortgage servicers, law firms, investors, insurers and regulators with the data & analytics necessary for best practice compliance and timelines. OVERSITE DATA SERVICES, LLC. | WWW.OVERSITE.COM | INFO@OVERSITE.COM THIRD-PARTY ACCOUNTABILITY Responsibility for accurate appraisals lands on lenders, not vendors. A recent bulletin from the Office of the Comptroller of the Currency (OCC) recommends new guidelines for national banks and federal savings institutions regarding their third-party vendors, including appraisal management companies (AMCs). Banks and mortgage lenders are cautioned to choose appraisers and other vendors wisely, as regulators will hold lenders accountable for the quality and accuracy of their vendors' work. Concerned about the increasing reliance of financial institutions on third-party vendors for critical tasks, the OCC stated that it "expects more comprehensive oversight and management of third-party relationships that involve critical bank activities." In its bulletin, the OCC laid out steps lenders should take to manage vendor risk. These steps include: • Performing proper due diligence in selecting a third-party provider. • Conducting ongoing monitoring of the third-party's activities and performance. • Maintaining property document and reporting. 40 • Conducting independent reviews of the risk management process. The OCC says it will pursue enforcement actions to address violations of the law and unsafe practices by lenders or their thirdparty service providers. The regulator has the authority to assess special fees against lenders when it finds transgressions on the part of their third party providers. Following the release of the bulletin, in a panel discussion hosted by Collateral Risk Network (CRN), an industry group comprised of lenders, appraisers, government agencies, and Wall Street firms made it clear that selecting the right appraiser is the single most important part of the appraisal process. Keith D. Murray, MAI, president and CEO of PCV Murcor, shared his thoughts on the issue: "Regulators will hold lenders responsible for any misdeeds by appraisers as well as the quality of their work. Appraisal quality begins with the appraiser, and when the right appraiser is selected, the downstream risk is minimized tremendously," he said. Murray says AMCs should be using a blend of technology and licensed appraisers to analyze every appraisal before sending it on to their client. This continual monitoring makes sure the appropriate appraiser is selected for every order. He suggests three critical factors in matching the proper appraiser to an assignment: the appraiser's knowledge of the property type, knowledge of the neighborhood, and the appraiser's performance record. "Too often, we hear of appraisers being chosen on the basis of just one of those factors, or just the lowest fee, which can actually be a recipe for disaster," Murray said. "The simple fact is that not all appraisals or appraisers are alike. Every market and every property require different competencies." Murray closed his remarks with a somber warning to all AMCs: "The federal government is serious about the issue. As an appraisal provider, and for the benefit of our clients, we are giving this our full attention. And, frankly, we think the industry as a whole should as well."

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