Independence of Mortgage Appraisal Function

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Joan B

I am presently performing an audit of the Secondary Mortgage Market function.  As part of the audit, I am also looking for compliance to investor requirements.  Freddie Mac requires separation of the quality control function from the origination and underwriting departments.  NCUA also requires that the appraisal function be separate from and not report to the loan production area.  Since the appraisal staff is evaluating the information provided by the third party appraiser, they need to report to an individual knowledgeable of the process.  How does your credit union handle the independence issue?  Does the appraisal review staff report to the individual performing quality control reviews?