Five Questions to Ask Your AMC Provider About Appraisal Bias

Appraisal bias is a significant concern for lenders, borrowers and regulators. Ensuring that your Appraisal Management Company (AMC) has robust processes in place to prevent bias is critical. Here are five essential questions to guide your discussions with potential AMC providers, helping you understand how they address fairness, transparency, and compliance.

1. How Do You Establish and Manage Your Appraiser Panel?
Your AMC’s approach to managing its panel is foundational to unbiased appraisals. Inquire about:

• What are your criteria for selecting appraisers?
• Do you perform regular evaluations, and what metrics are used?
• How do you handle issues with appraisers, including concerns about bias?

CSS evaluates appraisers on every order using a proprietary scoring system that rates quality, communication and professionalism. Each appraiser is rated on every assignment based on turn time, responsiveness, quality, and order declines. We also take into consideration current appraiser workload and turn times, geographic competency, certifications, and lender’s preferred or approved lists of appraisers. CSS uses vendor scorecards to provide ratings to appraisers based on specific metrics such as:

• Percent of orders that needed internal revision before being sent to the lender
• Percent of orders that receive revision requests from the lender
• Borrower disputes and whether or not they resulted in a value change
• Average turn time

These scorecards provide aggregated performance insights and appraisers with quality or communication issues are deprioritized and/or thus removed from the rotation.

2. What Training Do You Provide to Prevent Bias?
Training is essential for ensuring appraisers and staff understand fair housing practices. Inquire about:

• What training do your reviewers and appraisers receive to identify and prevent bias?
• How do you stay updated on evolving regulations and terminology?

CSS provides comprehensive training to internal reviewers on fair housing and anti-discrimination practices. Appraiser engagement letters explicitly outline expectations for unbiased appraisals. While some states mandate specific appraiser training, CSS strongly recommends it even where optional, ensuring all participants in the process understand their role in preventing bias​.

3. What Tools and Processes Are Used to Review Appraisals for Bias?
Technology and human oversight should work together hand in hand to identify and address bias. Ask your AMC:

• Do you use automated tools to screen for potentially biased language or problematic comparables?
• Are appraisals reviewed manually in addition to automated checks?

While technology is a game changer when it comes to mitigating risk, it should not be used as a replacement for human oversight and review. At CSS, we employ advanced automation review tools with fair lending rule sets to flag problematic language, photographs, religious articles and other items that could result in biased decisions.

In addition, every appraisal is manually reviewed by a qualified CSS staff member. They closely examine the report as well as the output of all automated review tools. CSS then provides our lenders with a compliance checklist to certify that the appraisal was completed consistent with all applicable regulations and guidelines. Human oversight is a critical part of CSS’ process, ensuring nuanced evaluation that automated systems could potentially miss.

4. How Do You Handle Complaints About Potential Bias?
A transparent and robust complaint process reflects an AMC’s accountability. Consider asking:

• How do you track and address complaints about bias?
• What is your process for resolving such complaints, including communication with lenders?

While thankfully bias complaints are very rare and essentially non-existent amongst our panel of appraisers, we maintain a comprehensive escalation process. Complaints are logged, escalated to senior management and thoroughly investigated. CSS also tracks and reports complaints to the relevant state appraisal board if necessary. This proactive approach ensures any potential issues are swiftly addressed.

5. How are you Preparing for Future Regulations and Technology?
The appraisal landscape is rapidly evolving with new technologies and regulatory changes. Ask:

• How do you handle Reconsideration of Value (ROV) requests?
• Are you integrating emerging technologies, such as AI, into your processes?

CSS has introduced specific ROV tracking categories to help lenders monitor and respond effectively. The company is also exploring the integration of computer vision technology to enhance review consistency, ensuring all property details align with photos and descriptions. This commitment to innovation keeps CSS at the forefront of fair and unbiased appraisal management.

Appraisal bias can have far-reaching consequences, impacting lenders and their borrowers. CSS is a leader in mitigating appraisal bias through meticulous procedures, ongoing training and the integration of cutting-edge technology. By choosing CSS, lenders gain a trusted partner committed to transparency, fairness and compliance.

Contact us today to learn more about our appraisal management services.