An appraisal management company (AMC) surety bond is needed in many states as a licensing requirement to operate an appraisal management business.
This surety bond provides a simple way for you to document your company's financial liability requirement as outlined by the state. If there is a claim against your bond, the surety company will seek reimbursement from you, the policyholder. An AMC bond is different from business insurance in that you are paying a premium to protect your customers rather than your company.
Depending on your personal credit score and your business's financial health and history, your bond premium can range from 1% to 3% of the bond's full coverage amount.
Here are the states in which NNA Surety Bonds provides bonds for appraisal management companies, with premiums listed at 1%.
|State||Bond Amount||Cost* (Annual Premium at 1%)|
Appraisal management company bonds are available through NNA Surety Bonds in the following states: Alabama, Arizona, Arkansas, Colorado, Delaware, Georgia, Illinois, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, Oregon, South Dakota, Tennessee, Utah, Virginia, and Wyoming.
To learn more about getting the AMC bond coverage required in your state, contact us!
Although appraisal management companies have existed for over 50 years, their importance grew dramatically after the financial crisis of 2007–2008. In studying how to prevent a recurrence of the housing overvaluation bubble, regulators realized that property appraisers had to be more independent of property buyers and lending institutions, both of whom stood to profit if property prices were artificially inflated.
Appraisal management companies were therefore inserted between lenders and appraisers as independent entities that hire and manage property appraisers. By federal regulation, they are not allowed to be influenced by lenders, and therefore have no motive to inflate property prices when providing real estate valuation services.