AMC Fined for Appraisal Order Blast Violation

  • 376
  • 31
  • 8
  •  
  •  
  •  
  •  
  •   
  •  
    415
    Shares

Consolidated Analytics AMC Fined for Appraisal Order Blast Violation

Consolidated Analytics, an AMC based in Anaheim California, was fined $3,000 for violating the Utah AMC Administrative Rules R162-2e-306 “Offering An Appraisal Assignment and Communicating with Two or More Appraisers About a Potential Assignment.

The specific part of this rule that pertains to broadcasting has been relatively effective in reducing broadcasting of assignments. Clear Capital recently was fined $5,000 for failing to comply and there are additional complaints working their way through the system.

CONSOLIDATED ANALYTICS, INC., BRIAN GEHL, Owner/Manager, Appraisal Management Company, Anaheim, California. In a stipulated order dated June 24, 2020, Consolidated Analytics, Inc. admitted that it broadcast an appraisal assignment to 58 independent contractor appraisers and then awarded the assignment to an appraiser without waiting the required 120 minutes or until each appraiser had responded to the offering. These actions are contrary to the Utah Administrative Rules. Consolidated Analytics, Inc. agreed to pay a civil penalty of $3,000. Case number AP-19-106583

Utah AMC Administrative Rules R162-2e-306. Offering an Appraisal Assignment and Communicating With Two or More Appraisers About a Potential Assignment

(1) If an AMC simultaneously contacts two or more independent contractor appraisers to offer an assignment of a one to four-unit residential mortgage appraisal or to gauge interest in such an assignment, the AMC shall include in the communication the information required in R162-2e-304(1)(c). To provide adequate time for a contract appraiser to determine the appraiser’s competency and to communicate interest in the assignment to the AMC, the AMC may not award the assignment to a contract appraiser until the earlier of:

(a) 120 minutes following the offering of an assignment; or

(b) each contract appraiser has affirmatively responded to the offering.

(2)(a) If a one to four-unit residential mortgage appraisal assignment is simultaneously offered to two or more independent contractor appraisers on a business day, the AMC shall allow the appraisers a minimum of 120 minutes to respond to accept the assignment before offering the assignment to other appraisers.

(b) If a one to four-unit residential mortgage appraisal assignment is simultaneously offered to two or more independent contractor appraisers on a day other than a business day, the AMC shall allow the appraisers until 9:00 A.M. Mountain Time on the next business day to accept the assignment before offering the assignment to other appraisers.

(3) If an independent contractor appraiser declines to accept an assignment or does not respond by the specified deadline, the AMC may offer the assignment to other appraisers.

(4) Nothing in this Section prohibits an AMC from communicating or attempting to communicate, directly or in real time with an independent contractor appraiser, without offering an assignment, in order to determine the appraiser’s availability, willingness, competency, fee requirements, and turn time for a potential assignment. In such circumstances, the AMC is not required to wait any length of time before contacting other candidates who appear to the AMC to qualify for the potential assignment.

 

AppraisersBlogs
Latest posts by AppraisersBlogs (see all)
Image credit flickr - Kelly Cookson
AppraisersBlogs

AppraisersBlogs

Have questions or need help? Please contact us with any comments, questions or concerns.

You may also like...

17 Responses

  1. Avatar Jeanie says:

    Does anyone know if there is a similar rule on broadcasting in other states?

    5
  2. Avatar Scott says:

    “Clear Capital recently was fined $5,000 for failing to comply and there are additional complaints working their way through the system.”

    THANK YOU. THANK YOU. THANK YOU.

    9
  3. Baggins Baggins says:

    Software providers like Mercury, Scope, and other distribution platforms readily promote and facilitate blast ordering to multiple appraisers at once. Corelogic and most amc’s refuse to acknowledge that blast ordering is a time and resource drain, as well as a generally predatory practice. If you call in when they blast orders at you it’s interesting to hear the excuses as they refuse to tell you how many other appraisers the order was sent to. They know, but they will not tell. How’s that for a business partner you can trust? If the amc’s operated on a cost plus basis and did not keep the difference between what the consumer was charged vs what the appraiser billed, they would not have the same financial incentives to engage in predatory order shopping. Cost savings are of course, never returned to the borrowing consumer but rather are held as a financial incentive for the amc to place downward pressure on the appraisers fee. Separation from loan production continues to do more harm than good.

    The fine is pointless and should have been applied as $3k x 58 (number of appraisers blasted). If the Utah rule was a federal rule a $3k fine would be generated every 2 seconds. That assignment behavior from amc’s is the norm, not the exception. The result of improperly co mingled fees. Amc’s do not provide appraisals, they have no business having any access to the appraisers billable amount. They should not be able to with hold payments, direct our fee schedules, or shop fees for their own personal profit gain. The amc’s should bill separately for their distinctly different service. The amc’s claim to fame is the ability to swindle the fee out from under appraisers, it’s pure profiteering. Every single instance of this unearned fee raking should have resulted in a 10k daily, 20k recurring daily fine per each individual instance, for every amc in this country. Per Dodd Frank Reg Z on Appraiser Independence. CFPB safe harbor rule was a betrayal of the spirit of the RegZ law, which was meant to inhibit these obviously predatory amc companies from operating this way. This still has potential to be the biggest class action in history. As the size of amc’s continues to grow, so should the appraisers call for retroactive class actions on the C&R (customary and reasonable) fee laws.

    9
  4. Avatar VA says:

    Wow……..$3,000! That had to hurt!

    4
    • Baggins Baggins says:

      No way, not even close. Check that amc’s website out, the amc appraisal management aspect is but a sliver of their total activity. And it’s like that with a great many amc’s now, they have successfully diversified their businesses into many aspects of title, tech, origination, just too many to list. Having leapfrogged off the appraisers back, the amc industry stole a substantial amount of the appraisal industries potential energy and morphed it into their own actionable energetic distribution and business growth. The results as we all know, has been over a decade of frozen fees, attrition in quality appraiser numbers, and a resounding reduction in appraisal quality and reliability as appraisers struggled to keep up via automation and outsourcing to compensate for steep reductions in expected income. On all fronts this hurts the consumer. If the amc model is the future, consumers should beware. The states remain derelict in their duties to allow this to continue.

      Rendering the potential payday for a class action lawsuit against C&R violations to be truly monumental and well worth everyones time. As if the syphoning off of what is likely to be billions of dollars of unearned fee raking was not enough incentive already. Amc’s should think twice about where the long term income is and get out of the amc game while they’re ahead, or do something absolutely radical like bill for their services separately, like every other company in the world who’s not pilfering and profiteering, risking RICO and class action lawsuits as if they are untouchable. The broken record skips on.

      5
  5. Avatar Carl says:

    AMCs blasting orders are only looking for the cheapest and fastest appraisers. We need to put an end on low bid appraisal ordering. The Utah broadcasting rule is a good start but does not go far enough. AMCs awarding broadcast orders to the lowest bidder instead of the most qualified/experienced should also be fined.

    9
  6. Avatar Pat says:

    Baggins

    Please call me 804-873-4968
    Thanks
    Pat Turner

    2
  7. Avatar Natalie Davenport says:

    Consolidated Analytics is the worst, we stopped bidding on their orders a long time ago. Now I know why we never got any work from them.

    5
  8. Brian Kirkpatrick on Facebook Brian Kirkpatrick on Facebook says:

    About 150 other companies should be fined as well. $3,000 each week….

    6
    • Baggins Baggins says:

      These have been issues for a very long time. I wrote this to the fed in 2011. You know, it’s like, why bother with single 3k fines when these companies have clearly deserved 10k & 20k DAILY fines for EVERY SINGLE INSTANCE of this behavior, since Dodd Frank passed. They paid off someone at the CFPB to circumvent the LAW, and the ‘safe harbor rule’ is still to this day, purely fictitious. These amc companies should not exist in the first place, not in their current form at least. They should be fined out of existence. / I can’t call up the quick images I had of the 10k/20k fines language. Anyone happen to have that for a quick post? If we’re talking regulatory actions and fines, it’s important to always call up the most important one which was nearly enforced, but was never really enforced. The C&R rule with it’s subsequent 10k/20k fine demands, pointed specifically at amc companies. So many of the appraisers who worked so diligently to get that through simply quit the industry when the safe harbor rule came forward. Lack of enforcement on this one point has devastated the industry. None of the ensuing lessor rules would have even been necessary, if this one rule had been enforced. There would be no shotgun bidding in the first place if amc’s were held to the C&R rule. Think about it.
      _____________________________ (2011 letter)

      Any revision to, or replacement of the follow criteria stated clearly in Dodd-Frank, a federal law, would require Congressional Amendment – not arbitrary gross misinterpretation of the actual LAW:

      Dodd-Frank ‘‘(i) CUSTOMARY AND REASONABLE FEE ‘‘ Fee studies shall EXCLUDE assignments ordered by known appraisal management companies.”

      Kindly advise when the fictional “Option 1” now in the published Interim Final Rule will be removed.
      Thank you

      Predatory lending practices and subsequent preferential appraiser selection choices is an ongoing event which the implementation of HVCC, and related policies have not successfully managed. Amc’s have walked right over the appropriate intention of their business position to quell predatory lending, & real estate valuation flipping & flopping, the same way they have walked right over C&R appraiser fee laws. Lack of round robin rotating fee panels allows for a multitude of advocacy related problems in real estate appraisal distribution.
      What works is the tried and true traditional approach, similar to the VA panel, as well as many existing in house distribution rotating panel credit union methods.

      Having a biased middle man who seeks to appease the wishes of lending client commission based brokers is not much different than an appraiser being pressured directly by a biased lenders agent who utilized preferential assignment practices at the expense of fair consumer protection to maximize their profits. In fact, they are markedly similar.

      The amc will preferentially choose appraisers that show advocacy in favor of the lenders more often than not. Lack of rotating panels means one single appraiser can cause a systemic problem with valuation security and that can go on indefinitely because the amc will not risk losing their lender clients any more than that one bad appraiser will risk losing his preferentially assigned appraisal work. Independent valuation opinions essentially cannot co exist within a climate of preferential appraisal assignment.

      These are advocacy related issues which drive the entire structure of appraisal ethics. An appraiser must not be an advocate. However, feeding consumer appraisal charges back to the lender, their subsidiary amcs, or even making deals work so an appraiser can keep up their automated amc grading to receive more work, are points in fact which are at odds with proper ethical appraiser rules.

      Is it too late for someone who knows how this works to examine this? The current implementation and interpretation of these rules is clearly erroneous. “The fox guarding the hen house” rings so true.

      The appraiser is many times the only person on the front end of loan to be a truly unbiased party, they are supposed to be uniquely qualified to assure the collateral worth is adequate. Preferential assignment practices have and will continue to cause these basic checks and balances involving appraisers, salesman, and brokers to be meaningless.

      4
  9. Avatar Mike Irvine says:

    A $3000 fine is a slap on the hand that will not deter orders from being assigned on the fast and cheap. The only thing that will come of this is a corporate-wide email to the Consolidated Analytics employees stating that under no circumstances will anyone assign an appraisal in under 120 minutes. Beyond that, it will be business as usual for this company.

    4
  10. Avatar SoCal Appraiser Guy says:

    Only 58? Those are rookie numbers. Last week 1st First Look Appraisals, LLC sent out 2 quote request. The first quote request was sent to 241 appraisers. The second quote request was sent to 176 appraisers. Who ever sent out the quote must have forgotten to use the BCC function.

    3
    • Baggins Baggins says:

      Once you become aware of those things, it’s hard to maintain respect for companies whom operate that way. The only way to win, is not to play. Forward that email to yourself so you can anonymize it slightly with redactions, then take an image snip, and post it here on the blogs.

      Amc’s are nothing more than telemarketers, recycling the same contact list to infinity.

      Let’s see, we allow invoice inclusion in NY, but nowhere else. We prohibit shotgun ordering in UT, but nowhere else. We don’t remove statements of billable amount in CO, as they’re required to include it, but everywhere else that’s a stipulation and the appraiser is not allowed to share that data. In this state we are unable to force appraisers to sign indemnity agreements, but everywhere else we force them to do that.

      These are the companies who supposedly champion a return to accountability and ethic in the appraisal industry?

      4
  11. Baggins Baggins says:

    https://www.regulations.gov/document?D=FRS-2010-0309-0001
    If you work with amc’s, you should have read all of the C&R texts, presumptions of compliance, and anticompetitive acts portions of this. Scroll down to 42(f) Customary and Reasonable Compensation, then read on all the way to V, Effective Date and Mandatory Compliance date.

    So let’s talk about it. The amc’s have sidestepped the spirit of these detailed regulations pertaining to anticompetitive practices, reasonable compliance with C&R and the multiple harbors of compliance, outright ignored the experience factors, and have applied the volume discount approach to everyone. What is a recent rate with the shotgun distribution method? These are the companies lenders entrust valuation security to? Get to know the regulation language and then talk to your amc people on the phone and see if they can keep up a valid conversation about rules and regulations.
    https://www.federalreserve.gov/newsevents/pressreleases/bcreg20101018a.htm

    And of course the mirrored CFPB texts. (variety presentations depending on how you like to read it.)
    https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/Interp-42/
    https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/42/

    If you’ve ever been browbeat by the ‘TRID’ excuse, try brushing up on your RESPA reading. Kickbacks, things of value, fee splitting, and not very much to say about appraisal fee disclosure. Pro tip; A lender can quite simply comply with TRID and appraisal fee disclosure by posting a range of fees. Lenders easily sidestep the issue by routinely posting disclosed appraisal fee ranges up to a thousand and such. Junk fees and splits, steering and raking. What’s outright prohibited for other participants in the origination process, that’s just everyday practice for amc’s. Because their presence came after the formation of so much regulatory guidance, amc’s were never properly folded in with similar standards of compliance. It was a grave error not to separate the amc fees and the appraisers fees with their own individual line item disclosures. If you want to solve ‘the amc dilemma’, the action which needs completed is to uncouple the fees and force separate billing. Nothing short of that is going to work. That has been the root cause of amc profiteering this entire time, improperly co mingled fees for distinctly different services.
    https://www.ncua.gov/regulation-supervision/manuals-guides/federal-consumer-financial-protection-guide/compliance-management/lending-regulations/real-estate-settlement-procedures-act-regulation-x

    Where are the references to the 10k/20k daily recurrent fines language? Anyone have any direct links or copies of that text to post visually for others? When that first came out it made headlines and appraisers were excited.

    I did however, find a treasure trove of comments circa 2010 on this issue. So many appraisers rose up and fought against what we’re dealing with now. So all you new appraisers and tech people, you can save all your talk about why we should be working with amc’s, we’re not listening and we never will either. These companies broke the trust from day one.

    Google search this term: federalreserve.gov “AMC” truth in lending comments

    I mean, just click through them and read. There are also other similar search terms to bring more letters out if you want. Somewhere is the assimilation page where all these comments are located on a single page for easier click through than google, but I was unable to find that one in a fair amount of time today so here is the google troves instead for you. Here is a good one, Ha! “As one boot has been lifted from the neck of the Appraiser, another has taken its place.” Dang Bradley, good one.
    https://www.federalreserve.gov/SECRS/2010/December/20101230/R-1394/R-1394_122310_57485_465919736844_1.pdf
    https://www.federalreserve.gov/SECRS/2010/December/20101230/R-1394/R-1394_122110_58097_610608338456_1.pdf
    https://www.federalreserve.gov/SECRS/2010/December/20101230/R-1394/R-1394_122110_58072_551468140486_1.pdf
    https://www.federalreserve.gov/SECRS/2010/December/20101230/R-1394/R-1394_122110_58113_630906853180_1.pdf
    https://www.federalreserve.gov/SECRS/2011/January/20110107/R-1394/R-1394_122710_59241_572803604872_1.pdf
    https://www.federalreserve.gov/SECRS/2011/June/20110614/R-1394/R-1394_061011_81271_359544380851_1.pdf (oh yeah, he was mad boy!, and rightfully so)
    https://www.federalreserve.gov/SECRS/2011/January/20110107/R-1394/R-1394_122710_59305_558264421225_1.pdf (rambling but the point is still clear.)
    https://www.federalreserve.gov/SECRS/2011/January/20110106/R-1394/R-1394_122610_59159_572765947899_1.pdf
    https://www.federalreserve.gov/SECRS/2010/November/20101129/R-1394/R-1394_112110_54965_346425025668_1.pdf
    https://www.federalreserve.gov/SECRS/2011/January/20110106/R-1394/R-1394_122610_59136_572760166538_1.pdf
    https://www.federalreserve.gov/SECRS/2010/November/20101129/R-1394/R-1394_111910_54941_575078636687_1.pdf
    https://www.federalregister.gov/documents/2010/10/28/2010-26671/truth-in-lending (I think this was the landing page for the call to letter writing. Not sure. I was unable to follow the links to get that singular page which listed all the appraiser comments letters, please post that if you’re able to find. I tried so many search terms but could not find that page which contained all the appraisers letters. Might be limited to FOIA these days. Know it’s out there, I used to have it bookmarked on my old PC and it provided endless hours of entertainment to listen to an entire country of appraisers ranting and complaining about amc’s in their letters. At one point I devoted weeks to read most of them, I think there were at least a few thousand letters from appraisers on the specific issue of C&R and amc’s, per Reg Z reconsideration. I think it was 2,500 appraisers letters, er, well, it was a lot. )
    https://www.federalreserve.gov/SECRS/2011/January/20110106/R-1394/R-1394_122610_59159_572765947899_1.pdf
    https://www.federalreserve.gov/newsevents/rr-commpublic/docket_no_1394__summary_of_input_10282010.pdf
    https://nerej.com/wake-up-call-interim-final-rule-on-real-estate-appraisals

    If you want to work with amc’s, it is your responsibility to be aware of the governing regulations. You are volunteering for twice the oversight and scrutiny, with half the pay. So for the ‘broadcasting rule’, what’s the point? Amc’s will find a way around it. Let the free market work, be the invisible hand yourself. Simply don’t work with those companies and you won’t have to worry about them anymore. Cheers. Take the chains off. Throw the mask away.

    3
  12. Bill Ritzdorf on Facebook Bill Ritzdorf on Facebook says:

    These clowns call me nearly everyday seeking out lowball fees.

    3
    • Baggins Baggins says:

      Bill you need a call blocker. I have an analog one which holds 10,000 number capacity. One press of the button and anyone calling from a specific number will get auto hung up on after a single ring, forever into the future. Because it’s analog I and I alone have strict total control of what numbers are blocked, and what numbers are allowed through. I’ve spent more time getting off of amc lists then I ever spent getting on them. These days the amc’s don’t even ask appraisers for permission, the amc’s just blast the orders outward indiscriminately to whomever will receive them. All many of these amc’s need is verification the appraiser is still alive and they have a valid email or phone number contact, and they’ll send the appraisers bid and quote requests without any other validation or verification, forever to infinity.

      As for as dealing with them, try this standardized response… attached.

      First one to say a number loses. Classical negotiation techniques never grow old, they just change slightly with time and the situation. The concept is still true.

      JFK: “You can not negotiate with people who say what’s mine is mine, and what is yours is negotiable.”

      1
  13. Avatar Dave says:

    AMC’s have been blasting we appraisers for many many years. Cheap and fast. They would rather send a city slicker miles away to do a rural appraisal in my rural county if they can make an extra $25. Do they really do what they are supposed to do based on what Dodd-Frank wanted. There is no buffer. Just a way to profit off we working appraiser’s so the gov’t can feel like they did good. about themselves at appraiser’s expense. Typical government bureaucracy.

    2

Leave a Reply

We welcome critical posts & opposing points of view. We value robust & civil discourse. You may openly disagree, but state your case in an atmosphere of mutual respect, in which everyone has a right to a particular view about the topic of conversation. Please keep remarks about the topic at hand, & PLEASE avoid personal attacks. If the poster gets you upset, it is the Internet, you can walk away from it.

Personal attacks harm the collegial atmosphere we encourage on AppraisersBlogs.

Your email address will not be published. Required fields are marked *

xml sitemap

AMC Fined for Appraisal Order Blast Violation

by AppraisersBlogs time to read: 2 min
blank
blank