Closed for Business, Sorry Folks!
269 65 35
For those who are not familiar with what an AMC is, it is short for Appraisal Management Company. They are not new, but since the adoption of the Home Valuation Code of Conduct, the number and the frequency of their use have increased. They are the order manager for the lender and ensure appraiser independence. If you have not already read “What’s Not in Your Wallet” or “Round and Round!”, go get a little more familiar before reading this.
AMCs manage appraisal orders. They find the appraisers to give the orders to, and are supposed to provide quality control reviews of completed appraisals prior to submitting them to the lender. They are meant to help facilitate the appraisal process so that the lender can make a lending decision. They also collect the appraisal fees from the lender, the consumer, and then pay the appraisers for work done.
Over the course of the past 10 years, we have seen many AMCs collect the money you, the consumer, pay to them with which they are to pay the appraiser they hired. Many AMCs do a good job paying appraisers. However, there are also many that leave appraisers with unpaid invoices and very little recourse to recoup lost revenue.
As it happens, there were big AMCs, like AppraiserLoft, who pocketed millions of dollars from consumers, only to never pay the appraisers. When they closed their doors, they failed to pay appraisers for completed work. JVI Solutions and Evaluation Solutions also left appraisers high and dry when they shut down operations. Companies like Newtown AMC, Maverick AMC, and Nationwide AMC, collected the appraisal fees, but never paid the appraisers they owed when they closed their doors. These companies were all owned by the same guy who went on to form another AMC, Atlantic 1. And yes, you guessed it! Atlantic 1 is also not paying appraisers. Valuation Concepts as well as COESTER VMS are the newest additions to this trend. They are not answering calls or emails, leaving appraisers with significant unpaid fees. Some AMCS are closing down and are trying to settle for pennies on the dollar with appraisers. This is a major concern. Hard working appraisers are not getting paid for their work. I am sure you would be upset if your company did not pay you. So here is the question?? Where is your money, and who got the appraisal fee? Good question. Looks like some of these current and former Appraisal Management Company owners are living much better than the rest of us, at our expense.
Under Dodd Frank, lenders are supposed to be responsible for the Appraisal Management Company they have engaged. However, that is not the case. Many lenders refuse to take responsibility and they refuse to pay the appraiser even though you, the consumer, paid for the service. You paid for the appraisal and the appraiser who completed this service gets nothing. Ask yourself this. Is your mechanic, plumber or your lawyer working for free? Are they being managed by third parties who are collecting consumer payments? So why do independent appraisers have to abide by different rules than others? Why do we have to wait, at best case scenario 30 to 90 days, at worst case scenario 120+ days, to get paid? Why should appraisers risk being cheated of their hard earned money every time another Appraisal Management Company goes out of business? Why do independent business owners have to have someone else collecting their money and determining how much and when they get paid? Why does it take 30+ days to get paid when you, the consumer, used to pay the appraiser directly at the door after the inspection? If you pay for the appraisal up front before it is even ordered, then why can’t the appraiser be paid the moment the appraisal is completed? When I do work directly for the consumer, I get paid right after the inspection and before I leave the property.
Independent appraisers are subcontractors NOT employees.
This system is broken. It needs to be fixed.