AMC Hidden Costs

Shouldering the Weight of AMC Hidden Costs


Thinning wallets and dwindling fees for work performed are nothing new for the appraisal community. Yet in their latest income-reducing move, AMCs have sparked an outcry by requiring appraisers to foot the bill for additional services. These charges are further cutting into appraisers’ fees, which already suffer from AMC management fee deductions.

Recently, FREA uncovered three hidden costs being introduced by AMCs – which of these have you experienced?

Technology Usage

An increasing tendency among AMCs is the passing of technology fees on to appraisers. When an AMC orders a home valuation, the appraiser must submit the report through the AMC’s authorized software. However, software providers, such as Mercury Network, charge a per-report transaction fee, which is billed to the vendor (i.e., appraiser) rather than the AMC. Essentially, in order to submit a completed work order as requested by an AMC, an appraiser must cough up anywhere from (more…)

Appraisers and Concealed Weapons Permit CWP

Should Appraisers Carry Weapons on the Job?


The Second Amendment to the United States Constitution protects the rights of individuals to keep and bear arms. In the twenty-first century, the amendment has been subjected to renewed academic inquiry and judicial interest. In District of Columbia v. Heller (2008), the Supreme Court handed down a landmark decision, expressly holding the amendment to protect an individual right to possess and carry firearms. In McDonald v. Chicago (2010), the Court clarified its earlier decisions that limited the amendment’s impact to a restriction on the federal government, expressly holding that the Fourteenth Amendment applies the Second Amendment to state and local governments to the same extent that the Second Amendment applies to the federal government.

All this to say that it is our right to carry (under permit/license) by law, self-protection firearms or similar devices. If I accept an assignment in a questionable part of town, part of my tools to carry out my job in relative safety, may require taking the precaution of packing a firearm.

With that said, I respect those properties that have occupied residences that would not want to have someone they don’t know, walk into their home carrying a firearm. We do want to show common sense here people. That doesn’t mean that (more…)

AOs & FAQs reference removal - Image courtesy of digitalart /

Maryland Removes References to USPAP Advisory Opinions



On April 8, the Maryland Commission of Real Estate Appraisers, Appraisal Management Companies and Home Inspectors completed action on rulemaking that removed the Advisory Opinions and Frequently Asked Questions of the Uniform Standards of Professional Appraisal Practice from being incorporated by reference into the state’s appraiser licensing and certification laws.

The move addresses the Appraisal Institute’s long-standing concerns about increased regulatory burdens placed on professional appraisers.

Prior to this rule change, the AOs and FAQs were considered by the Commission to be part of USPAP. As such, the contents of the AOs and FAQs potentially could have been used by the Commission as the basis for disciplinary action against an appraiser. This was true even though USPAP specifically states that the AOs and FAQs are a “form of guidance issued by the ASB” and are not part of USPAP.

Maryland was one of (more…)

Coalition letter regarding appraiser blacklist

States Coalition Letter to FHFA regarding Fannie Mae’s Appraiser “Blacklist”


Dear Director Watt:

On behalf of our membership of working appraisers, the undersigned organizations would like to recognize and send our appreciation to Fannie Mae for formulating a comprehensive strategy to protect this Nation’s mortgage industry from future harm. Fannie Mae’s influence has shaped the U.S. Housing market into what we have today…the backbone of our Country’s economy.

As real estate appraisers who have survived the past few years’ turbulence, we realize, more than ever, how valuable our role is as unbiased observers of the market. Our role is to document and provide proof that will transcend time and survive critical analysis by those who depend on our knowledge, expertise and unbiased conclusions.

All actions have potential for unintended consequences. Those implemented by Fannie Mae, even more so, due to Fannie’s involvement in the majority of the Nation’s housing transactions. Fannie Mae’s new “Appraiser Quality Monitoring” initiative that creates an appraiser “do not use list” or “blacklist” has alarmed many (more…)

Seeking positive change for the appraisal industry

Newly Formed Appraiser Coalition Seeks Positive Change for the Industry


A group of Real Estate Appraisal experts committed to the preservation, protection and enhancement of the appraisal industry has formed the Appraiser Prosperity Coalition (, a merger of industry insiders and government affairs professionals dedicated to fighting for the legislative and regulatory changes needed to rebuild the industry in the wake of damaging legislation.

As you know, in an effort to remove value pressure from Real Estate Appraisers, the Dodd-Frank law affirmed a move made by the Home Valuation Code of Conduct to transfer most real estate appraisal ordering power from the hands of the 250,000+ Loan Officers in this country, to a small handful of national Appraisal Management Companies (AMCs).

The results of this change have been devastating to the real estate appraisal industry for several reasons. First, AMCs are for-profit businesses that currently succeed on the margins between what they charge and what they pay Appraisers. So, the less they pay Real Estate Appraisers, the more money they make. The Dodd-Frank law calls for them to pay “Reasonable and Customary” fees to appraisers, but the law gives no real direction or oversight, and this clause simply has no power and can never be enforced as it is illogical for a (more…)

Voice of Appraisal

Appraisers Now Have a Voice!


“Voice of Appraisal” is a show designed to deliver the most up to date news and information for the working real estate valuation professional. The show provides top analysis of real estate trends and issues that affect appraisers nationwide.  Our no-nonsense approach to appraisal, real estate, banking and politics creates a cutting edge program that provides an insight into the appraisal profession that is seldom heard.

The past 25 years of appraisal organizations, affiliations, coalitions, and designations have left our industry splintered and broken.  We have become a group too caught up in our own egos and titles to see how our profession is now crumbling before us.

We have divided ourselves, and our house will not stand!

We don’t need any more regulations to hinder us, or unions to protect us, or dwindling organizations to speak for us, or financial institutions to threaten us.

What we need is a voice, a movement (more…)

Appraisal Independence Violated ~ copyright

A Journal Piece of Appraiser Independence (Part 2): Appraisal Independence Violated


History is an important reminder to us all of what went wrong and what went right. When history is known we tend to skip the mistakes we made. We can either choose the right path for the wrong reason, the right path for the ‘right’ reasons and, we can take the wrong path in a similar manner. The MARKET needs to take the right path for the ‘right’ reasons.

In years of late 1998 and 1999 several ideas were brought forth to a Forum filled with Individual Appraisers carrying a dislike toward the status quo. One idea was the Appraisers Petition we are all familiar with and another one is the outline for creating the HVCC. The HVCC was not created immediately; it couldn’t be created until it was “appraised.” Many older Appraisers should check their reports for this “appraisal process.” The HVCC Ideal looked to have been more ‘able,’ but the problem surrounding it was the “Timing” as years went by. 8.5 years of heavy lifting (additional ideals and problem solving) took place from the start of discussing the Appraisers Petition to 6 months (+/-) before the collapse. Trust me none of this had anything to do with a “Fee.” It had to do with acting as an Appraiser Independently and a “safe market.”

The HVCC is probably one of the most – within context – Independent ‘works’ by any group of Real Estate Appraisers in the history of (more…)

Appraiser Independence

A Journal Piece of Appraiser Independence (Part 1): Where Do We Go From Here?


Buyer Beware! Where is the Value?   (PART 1)

In the years of 2007/2008, the ideologue of, “Appraiser Independence” had become popular for the real estate market’s economic agents and the processes it relies on to function properly. The idea gained respect, due to the perseverance of Real Estate Appraisers carrying out their Independence, during the decade of 2000-2010.

The Home Valuation Code of Conduct (HVCC) was introduced according to prevailing design and initiative:  the advancement of a market in need for an inspired and renewed sense of competition and freedom, but with sensible regulation to assist in reducing adverse affects of pure unattainable greed, to allow economies the ability to evolve and/or progress.

In retrospect, Fannie Mae and Freddie Mac—these secondary financial power houses, were placed into the center of attention with a well deserved, controversial lawsuit—instead, a decade worth of accomplishments were somehow mismanaged and/or changed, thwarting a sincere Independent (more…)

Fannie Mae on Rural Appraisals

Fannie Mae Releases Lender Letter on Property and Appraisal Requirements for Properties in Small Towns and Rural Areas


Property and Appraisal Requirements for Properties Located in Small Towns and Rural Areas

This Lender Letter is being issued in response to a Federal Housing Finance Agency directive to Fannie Mae to provide a number of clarifications regarding property and appraisal requirements for properties in small towns and rural areas.

Fannie Mae offers mortgage products and establishes eligibility guidelines that are designed to provide mortgage finance opportunities in all market segments. Fannie Mae recognizes that lenders making loans secured by properties located in small towns and rural areas are often faced with challenges that are not found in suburban and urban locations. Residential properties often have characteristics that present difficulties for appraisers, such as unique building types, substantial distances between properties, large lot sizes that may include farmland, and non-public sources for various utilities. General lack of density and homogeneity demand reliance on appraisers with expertise and experience in these markets. Qualified appraisers who understand the characteristics of these markets are key to ensuring (more…)

Fight Back Blacklisting

The End Is/Must Be Near: Advancements in the Art of Blacklisting


If you are a real estate professional, please read this, especially if you fear your own business is being damaged by all of the new regulations designed to “help” the real estate industry recover.

Imagine you, a hardworking, law abiding taxpayer, are sitting at home one evening watching television when there is a knock at your door. Somewhat surprised by the late hour of the visit, you get up and open the door and three IRS agents barge into your home and declare, “We are from the IRS and we are here to help.” I think it’s safe to say you would be both shocked and concerned. If you are involved in residential real estate, what has happened to most of you since the market collapse began in 2007 is similar to this scenario. You see, most professionals working in residential real estate were doing the right thing all along so many of the knee-jerk decisions made after the market collapsed are about as useful and helpful as three IRS agents showing up on your doorstep in the middle of the night.

There’s TARP I, TARP II, HVCC, Dodd-Frank, CFPB, AMC, UAD, UCDP and AVM, and now there is something new called AQM. In typical government fashion, the medicine being administered may actually be killing the patient. In this case, the patient is the residential real estate market. Thanks to the power ($$$$) of lobbyists representing (more…)

Missing plane and appraising

What Does the Missing Malaysian Jet have to do with Appraising?


I find it fascinating that a jet full of passengers can just disappear.  As time passes, it is becoming more and more evident that this is not going to end well.  What is interesting to me, however, is the media coverage of the event.  Everyone seems to have a theory as to what happened (including one ‘reporter’ speculating that a black hole might have sucked them up).  The problem?  Most of these theories are based on no more than a hunch.  There is little to no evidence supporting most of the ideas that the pundits on TV are espousing.

Now Dustin, are you really going to make a comparison between the Malaysian 777 disappearance and appraising?  Of course not.  But, I am going to make a comparison between the media coverage of the missing 777 and appraising.

Appraising, like journalism, is not an exact science.  If it were, you would see a different group of people becoming appraisers.  It is not just math.  It is not physics.  It is not engineering.  It is not as simple as calculating 2 + 2.  Rather, it is interpretation and analysis of data.  Sometimes, however, I fear that some forget the ‘data’ part of that sentence.  Just as the so-called journalists (more…)

Appraisal Management Companies Proposed Rule - Image courtesy of Stuart Miles /

Agencies Issue Proposed Rule on Minimum Requirements for Appraisal Management Companies


WASHINGTON— Six agencies today issued a proposed rule that would implement minimum requirements for state registration and supervision of appraisal management companies (AMCs). An AMC is an entity that serves as an intermediary between appraisers and lenders and provides appraisal management services.

In accordance with section 1124 of Title XI of the Financial Institution Reform, Recovery, and Enforcement Act of 1989, as added by section 1473 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the minimum requirements in the proposed rule would apply to states that elect to establish an appraiser certifying and licensing agency with the authority to register and supervise AMCs.

The proposed rule would not compel a state to establish an AMC registration and supervision program, and there is no penalty imposed on a state that does not establish a regulatory structure for AMCs. However, an AMC is barred by section 1124 from providing appraisal management services for federally related transactions in a state that has not established such a regulatory structure.

Under the proposed rule, participating states would require that an AMC: (more…)

Customary & Reasonable Appraisal Fee Petition - Image courtesy of patrisyu /

Online Petition to Make a Difference in Customary and Reasonable Appraisal Fees


Fellow Professional Appraiser,

I am asking you to take a moment from your busy day to PARTICIPATE in an important industry effort.

That issue is referred to within Title XIV of the Dodd-Frank legislation as “Customary and Reasonable Fees”:


In General – Lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised. Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys. Fee studies shall exclude assignments ordered by known appraisal management companies.

Subsequent to the original Dodd-Frank Act, the Federal Reserve enacted the “Interim Final Rule”. Among its provisions, this rule added the following guidance related to (more…)

Lack of Analysis

Analysis Paralysis


The most critical failure found in appraisal reports that come before the Board, whether residential, commercial, or agricultural, is a lack of analysis.  Appraisers seem to think that citing or reporting is synonymous with analysis.

Analysis – to study (something) closely and carefully: to learn the nature and relationship of the parts of (something) by a close and careful examination.

The URAR asks: I did or did not analyze the contract for sale for the subject purchase transaction. Explain the results of the analysis of the contract for sale or why the analysis was not performed.

Yet many will write: Standard contract. No concessions.

That isn’t analysis, is it?

Analyzing a contract begins with whether the appraiser has all of the pages, all of the riders, and whether it has been signed by all parties.

We rarely see a proper contract analysis. (more…)

House measurement

How Big is My House?


Do you ever get those questions? “Well ABC appraised my house last year and my house was 3,726 square feet. Why do you say it only contains 3,698 square feet?”. I have always wanted to say, well as your house gets older, the wood begins to shrink… Everyone knows of course that houses come in different sizes, shapes and that walls can be built at angles other than 90, 60 or 45 degrees, thus accurate measuring can be a challenge. When you factor in roof pitch for upstairs rooms, or many shrubs, or rose bushes or other obstacles around the perimeter, any given measurement can be off by a few inches one way or another and then you take the variance of a few inches and multiply that by a run of 45 feet or more. The estimated house size can easily vary due to the different methods that are used to measure the home as well.

Many old timers, like me, still use a 100′ steel tape to measure the exterior perimeter of the home. There are, of course, several alternatives available today:  steel, fiberglass, and vinyl measuring tapes. There are also measuring wheels, and sonic and laser measuring aids. There is no one device that is better or more reliable. However, you must understand the degree of reliability that each device offers before you decide to use it to determine size. For instance, the measuring wheel can skip (more…)

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