NAIHP Exposes AMC Tax Evasion / RESPA Violations
Latest posts by AppraisersBlogs (see all)
- Limbo Anyone?How Low Will it Go? - August 6, 2018
- Just Because You’re Paranoid Doesn’t Mean They Aren’t After You - August 3, 2018
- Slamming the Appraisal Industry - June 27, 2018
AMCs violating RESPA
NAIHP recently discovered many Appraisal Management Companies (AMC’s), are operating without authority in most states and have failed to pay state income tax.
When businesses are formed, they are required to register with their Secretary of State, for authority to conduct business. That registration alerts the State Tax Department you exist and may be responsible for certain taxes. The same holds true if you operate outside your home state, according to Marc Savitt, NAIHP President.
“Most AMC’s are only registered in a handful of states, but operate nationwide. If you’re not registered, you’re not paying taxes,” said Savitt.
Although, HVCC and now Appraiser Independence rules don’t mandate the use of AMC’s, many banks and large lenders, who own all or part of certain AMC’s, require their usage by consumers. RESPA requires disclosure of these affiliated relationships. After polling NAIHP members in several states, “we haven’t found one AMC or any of their partners disclosing these affiliations. We’ve also discovered other RESPA violations as well,” said Savitt.
Consumers were told, Appraiser Independence rules were implemented to protect them. In reality, these rules have bred a rogue, unregulated middleman industry that overcharges consumers, underpays licensed appraisers, contributes to the continuing depreciation of real estate values and appears to have evaded millions of dollars in state income tax.
Since these rules began almost three years ago, valuation fraud has increased over 50%, appraisal quality has decreased substantially and consumer costs have risen by almost 3 billion dollars.