Is there a reg that states that when using 3rd party appraisers that they should be used on a rotating baisis? I am unable to find anything. Here's the situation we have a loan officer that uses only one appriaser for his loans. The Loan Officer is not involved in the underwriting/approval process. This seems odd to me.

Pat, I guess I'd ask if you have any reference to rotating the appraiser used in your loan policy. It makes sense, because it spreads the business around, and it could help you avoid disclosing an appraiser as a 'required provider' under RESPA. I don't think you'll find anything more specific in the appraisal regulations.

I'd suggest that you're right to have some suspicions. Does the lender have any kind of relationship with this appraiser? Could be a job for your friendly, neighborhood auditor...

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Opinions stated are not legal advice, and are not necessarily the opinions of OAK Financial Corp.

Some banks use one appraiser for everything -- often because there is only one within range. But other banks use lists, which can take care of the required service provider disclosure required by RESPA.

I share Bart's concern, however, in your situation. I question why one of the lenders always uses the same person. If I were you, I'd do some nosing around to find out whether there is a relationship. After all, if the appraiser is related to the loan officer in a way that meets RESPA's control test, you can't use that appraiser without giving the customer an Affiliated Business Arrangement notice.

It is pretty common for loan officers to develop a relationship / comfort level with an appraiser. Because of this, many banks do not allow the originating loan officer to order the report. Others require that the a second officer review the report. In any event, in your situation, I would think at a minimum you should have your appraisals reviewed by another bank officer if the originating lender is ordering the report.