Slow Pay AMCs

Dave Towne

Dave Towne

Certified Residential RE Appraiser at Towne Appraisals
AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003.
Dave Towne on e-AppraisersDirectory.com
Dave Towne

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Slow Pay AMCs and Ponzi Scheme Payment Process

Slow pay reputation AMCs and Ponzi scheme payment process…

Folks,

Through several of the ‘media sources’ I read recently, I’ve learned that “a particular AMC” based on the west coast has a slow pay reputation.

As so often happens with low echelon AMCs with few clients, when business slows down, their payment process becomes a Ponzi scheme. Ultimately they go out of business.

I currently have an outstanding report with that AMC, but the payment due date to me is March 7. So I’m respectfully withholding their name publicly from others, until and unless they don’t pay me on time.

Over past years I’ve written about how appraisers MUST keep close track of their submitted reports and payments due for them. Too many appraisers get busy and neglect to monitor their Accounts Payable for their business.

Even more sickening is appraisers who continue to accept assignments from slow pay (or no pay) AMCs, only to realize months and thousands of unpaid dollars later that getting paid may be problematic – or impossible in a worst-case situation where the AMC goes out of business with no notice.

Since seeing the various notices about “a particular AMC”, I sent the following notice to THREE of their company email addresses.

Our state has an AMC licensing law which facilitates this process easier than for those of you in states without such laws. But the type of message I wrote is something you can use to ‘knock ’em upside the head’ with your clipboard (or tablet if you are mobile!). ”Borrow” it if you like:

To whom it may concern at XYZ AMC – accounts payable:

I carefully monitor what’s happening in ‘appraisal world’ and I’m learning from many appraisers in various sources in the US that your company has delayed payments to appraisers after reports have been submitted.

WA State has a 45 day payment requirement “after completion of the assignment.” I have a report initially submitted to XYZ AMC on Jan. 13, with a subsequent correction done and re-submittal on 1/20. (Weekend days count.)

Due to the ambiguity of our law, I give XYZ AMC the benefit of the doubt to use 1/20/17 as the ‘completion date.’ That means we are now at 30 days, as of today, Feb. 20.

Therefore you are hereby instructed that the payment is DUE TO ME on/before March 7, 2017…not mailed that day.

You are hereby put on notice that if the payment does not arrive in my mailbox on/before 3/07/17, I will then take steps to submit a formal complaint with the AMC licensing/registration agency within our Department of Licensing. The intent will be to file a formal request with your bonding company to pay for the report fee. This message is copied to that DoL agency as a BCC.

Furthermore, if payment is not received properly, steps will be taken to warn other appraisers, both here in WA State, and around the US that XYZ AMC should not be trusted as a client.

Thank you for your attention to this matter and to comply with our AMC licensing law.

Image credit flickr - Daniel Oines
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser – Licensed in WA State since 2003.
Dave Towne on e-AppraisersDirectory.com

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43 Responses

  1. Tom C says:

    I’m guessing it’s Coester. Appraisers through social media are reporting that they are 4 to 5 months late. Several appraisers have filed complaints with their real estate appraisal boards.

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    • JC says:

      GOT Appraisals is another slow pay AMC. Some appraisers are still waiting to get paid for work going back to October!

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      • Bob says:

        I finally received my $100 for a final inspection. Effective date of 9/12/2016; paid 2/23/2017!! They just sent me another appraisal request!! LOL. I told them to go pound sand!!

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        • Diana N. says:

          Hey Bob, good for you, at least you got your $100, I never got paid for a final inspection I did last year. Worst part, you can’t write off these losses on your taxes. My Acct. told me, tough s–t if you went out of pocket plus time, etc. You still can’t write it off if you get stiffed.

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        • D23 says:

          Bob, did they pay that on their own or was it a result of you continuing to call/email them about the payment? I have a full and a final for them that are over 90 days old now and I haven’t been able to get any responses or reach anyone when I call/email. It’s a reminder of why I’m very hesitant to ever accept orders from a new AMC. Glad you finally got paid!

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          • Bob says:

            I finally got paid when they needed me to accept an order! They still send me orders, but I quote high and tell them I must be paid in advance! LOL. You might need to file a complaint with your state and then cc them on it. Good luck!!

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    • Jason says:

      After everything we now know, why would anyone work with Brian Coester and his “House of Lies” company? I feel sorry for those appraisers that are owed money and still working for this crook.

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  2. James says:

    The article states West Coast so I’m guessing it’s GOT

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  3. Steve says:

    If an AMC waits to receive payment from their customer before paying you, stay away.  They will eventually and surely run out of money.

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  4. Boonie A, MD says:

    We can be sure the appraisal industry loves to bring up Brian Coester in every single article. Not sure why everyone is given this guy so much relevance. I have done appraisals for them and never had an issue with payment or fee’s. They call me for status an annoying amount of times but not any better or any worse then the other AMC trolls. Not defending them just seems that everyone has a crush on the man.

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    • John - Maryland says:

      Bonnie, Coester pays $350 max in Maryland. That’s not C&R fees. It should be $450. You say you’ve never had an issue with Coester fees. How much are you getting from them? I fired them after I learned how messed up of an AMC they are.

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    • Mike Ford Mike Ford says:

      Boonie, have you ever read his website? he claims to (and may well have) championed the national one size fits all Bank to AMC appraisal fee.

      His reputation is not considered by most posters here to be very good. Accusations abound about him. Everything from writing bad checks, to improper blacklisting and operating without a license, to low fees and even allegedly tampering with an appraisers email account.

      Just as I would have nothing to do with Wells Fargo in any capacity after their recent publicized fraud, I would tend to be pretty selective about working for any AMC.

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    • Bubba Sparxx says:

      Dear ‘Boonie’ aka Brian Coeseter, It is no just the blogs , media sites etc. It is also the regulators, govt agencies, etc. Taking over 1/2 year to pay & relentlessly contacting vendors for updates & offering less that R & C ($350-$450) for a ‘full” URAR is exactly the reasons for the extended & well deserved “crush’ that many wish to exert on the C VMS model whcih several other firms have implemented. Our MLS, Software, & Insurance carriers surely will not accept anything less than timely payments. It’s all we ask. Best Wishes B C aka “Boonie’

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  5. Diana N. says:

    Lets never forget ES Appraisal Services and the hundreds of appraisers across the country that they left hanging.  I won’t, and I am very cautious about who I do business with.

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  6. I’ve been warning appraisers for many years to simply decline work from AMC’s, and, transactional assignments, with some exceptions, if possible. There is no upside benefit. Only a fight to the bottom. In the past, appraisers have been left holding the bag, lucky to receive 10 cents per dollar owed, once the AMC’s go bankrupt. And, it is important to not have more than 5-10% of your billings with any one client in order to minimize the severity of the financial loss when this happens. Telling an AMC to pay by March 7 means nothing to them or to bankruptcy court. You will get leftovers after the secured creditors are paid-off, which will be many months or years down the road. An appraiser is simply an unsecured creditor with no leverage whatsoever. There is no agency or organization coming to our rescue. Unfortunately, it is probably time to write off the loss and move-on. And, name the AMC’s who don’t pay. A blacklist is necessary, just as the lenders, AMC’s and GSE’s maintain a list of appraisers not to use.

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    • Diana N. says:

      Leftovers if you are lucky. ES had nothing, or so it seems, probably all $$ in the Cayman Islands and the lions share of the work was for Chase who refused to make good for it, even after being sued. I agree with Craig, think appraisers should have their own blacklist and share it.

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      • Retired Appraiser Retired Appraiser says:

        That is precisely what these AMCs are doing: Hiding the money, taking bankruptcy, and moving on to the next big con scheme.  Let’s not forget that many AMCs were once shady mortgage companies that morphed into AMCs when the money dried up in mortgage work.  Novastar comes to mind as one of the first to pull this morph to AMC then declare bankruptcy scheme.

        Ah…to have a whistle blower exposing the money trail of these guys.

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      • Baggins Baggins says:

        The son of the Alamode company creator had created just that, a master list and website where appraisers could publicly and anonymously communicate about amc’s and their dirty deeds, even rating them. It was called Appraisal Advisor and it saved many appraisers thousands of dollars in real time updates as amc’s went under. Daddy Bigguns put a stop to that and sold us all down the river, and then sold Mercury down the line.

        Most appraisers are unaware that the same companies that send orders through to amc’s otherwise would assign the orders direct if only appraisers presented, solicited, and were aligned with varied distribution platforms. So it’s not time to throw Mercury in the trash can just yet, and after a mere decade of waiting they finally have a sparse few appraiser orientated tools available for somewhat effective individualized client management.

        How to gain direct clients: Assimilate names and contacts; Solicit directly, rinse, repeat. It’s so easy a caveman could do it. I remain mystified that appraisers don’t understand such basic concepts of created and supported market demand.

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  7. Wayne says:

    Honestly…this is just too funny for words! An AMC is a parasite company sucking their profits from appraisers willing to work with them. Is it really possible that these leaches do not know the licensing laws in the states they operate in? Are we supposed to hit our knees and beg this scum to pay their contracted fees? Our company has not prepared an appraisal for an AMC in years! However we get at least 4 – 5 email requests each week from these crap companies. It is a personal decision for each of us as to whether or not we will work for them. I choose NOT….and wish all of you the best in trying to collect! “if payment is not received properly, steps will be taken to warn other appraisers,” GEE….Wally I bet that will scare the poo out of them! No Beaver, these AMCs think appraisers are a joke and I suppose we really are! This is the type of advice we are offered from “educators” in our industry! Really? (education that sucks a watermelon thru a garden hose!) These educators should learn a bit before they “attempt to train others” They should be ashamed!

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  8. Wayne Courtney says:

    We have these “gurus” in our group that want to “teach” us! They call themselves educators! Some call themselves a coach! Somehow these folks seem to know it all! First, lets check to see if they have a general certification? Do they have any recognized designation? I think some of these are snake oil salesmen! Most are as full as a Christmas Turkey! Really, we as a group should put a stop to these duds playing as if they have a clue as to what is happening. Makes me want to puke! I could name many of them…wanting to coach us, wanting to put on an Expo, etc, etc…just too much crap for one sop! Some call themselves “educators” what a crock!

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  9. Baggins Baggins says:

    At least 9 out of 10 amc’s either outright ignore fee studies or blatantly violate law by disregarding them. An amc lady told me the other day that because they were not approved with the VA, they had no information and no access to information regarding VA standard fees in any areas. Almost no amc penalties ever came forth and nobody every tackled the junk fee rule with truthful information about the constantly variable fee rakes which have been going on for over a decade.

    This just in! Breaking news! FNMA looted to pay for obamacare. Brought to you by the same investigators whom solidified the HSBC fraud penalties. This is real. So I guess this means; Appraisers also shouldered the bill for obamacare, genius!

    Obama Robbed Private Investors to Fund Obamacare

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  10. Apologies for posting here-Webinar is tomorrow – I just learned of it. FREE HousingWire Webinar — Wednesday, March 1

    I was originally mildly annoyed with my favorite National Membership Coordinator for sending me a link without telling me what it’s about.

    This is for a webinar registration that features a cast of characters that alone makes it worth attending or watching.

    It’s titled “What’s Going to Happen to Appraisers in 2017”. It’s to be moderated by Jacob Gaffney, editor of Housing Wire.

    Usually I’m pretty careful about who I give an opportunity to pollute my mind but this cast of characters includes a truly noteworthy Rogues Gallery. Their bios are interesting.

    “Brian Coester, CEO, Coester VMS “For nearly a decade, Coester has immersed himself not only in the appraisal industry but in the mortgage industry as a whole. As a certified appraiser, he has a firm understanding of what is important in a valuation and how it affects the industry.”

    Alan Hummel, Chief Appraiser First American Mortgage Solutions (Anyone remember the folks that bought ACI or developed PACE PRO?) Now for the good part:

    “Alan is a past national president of the Appraisal Institute and is also a representative member on the Appraisal Subcommittee Advisory Committee (ASCAC).

    Zachary Dawson, Director Collateral Strategy & Policy. FannieMae “Responsible for Fannie Mae’s Single Family collateral strategy as a whole, covering both Selling Guide policy and use of collateral technology tools including Collateral Underwriter®. He also oversees the Appraiser Quality Monitoring initiative, collateral analytics & reporting, and other strategic appraisal initiatives”

    I’m deliberately leaving the fourth off because I have no knowledge of them other than info that speaker is a reported partner in a multi county Florida appraisal firm owned by MAIs, and that he is a former Florida State Regulator.

    Seeing who the featured speakers are helps us to better understand why the state of our profession is what it is today.

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  11. jack connor says:

    Guys pay attention. AMCs are putting appraisers on staff working for AMC. Clear violation of separation

    Don’t tell me amc can’t pressure salaried people.

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  12. Mike Ford Mike Ford says:

    Jack, Virginia (last I heard) was taking specific steps to prohibit this. Having said that, I’ve never heard of any restriction on AMC using staff appraisers. You and I see an obvious conflict of interest and independence, but Im sure AMCs defend practice by saying it is no different than a lender using their staff appraisers with a firewall in place between commission loan origination and administrative production. It may well depend on what state you are in.

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  13. Mike Ford Mike Ford says:

    Hey Dave! Did they pay you yet?

    Time to name and shame.

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  14. Dave Towne says:

    I have been ‘promised’ the check is in the mail. Technically today the 7th is my cut-off date before formal complaints and public shaming will occur. But I might let it go until mail comes tomorrow – only because they said they were mailing $$ on Monday.

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  15. Dave Towne says:

    By the way folks following this post:  I keep very close tabs on my Accounts Receivable.  This one late payment from an AMC is the ONLY one I have now (for 1 report), or have had in the past.

    All appraisers need to monitor their AR status at least weekly, and refuse any new assignments from any client with outstanding fee payments.

    Don’t get caught with knickers around your ankles like some appraisers who worked for WCCI last year and got burned to the tune of thousands of dollars when they closed up shop with very short notice.

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    • Wayne Courtney says:

      Gee Dave…are you new at this? Just a note: all one-time clients pay in advance. All attornies pay a retainer in advance. Large, Regional and local banks pay in 30 days. NO AMCs accepted. Really…no AMCs accepted at all!  Teach US please!!!

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    • DianaN says:

      And lets not forget ES, hate to keep bringing them up, but they were the baddest of the bad and appraisers should have learned a lesson from them, I sure as hell did.

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  16. Diana N. says:

    I am waiting for payment now from an AMC, it’s over 60 days. CT has a 45 day policy for AMC’s. I’ll keep you posted. But the courts and attorneys are worse, I have waited over 6 mos to be paid for foreclosure work.

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  17. Mike Ford, AGA CA AG GAA RAA Realtor(r) Mike Ford, AGA CA AG GAA RAA Realtor(r) says:

    Hi Diana, while I espouse a zero tolerance policy on payments, IF you want to keep that client its probably best to send them a polite reminder. “Is there a reason you are withholding payment on such and such invoice?” If so then please let me know what it is. If not, please comply with the state payment requirement of 45 days. (Insert regulation reference or copy here).

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    • DianaN says:

      Hi Mike, I did and reminded them that CT has a 45 day pay. The response and apology that I got was that they were behind on their payments and “the check would be forthcoming in a few days”. Shades of ES. This company has been pretty good with payments and I don’t get a lot of work from them but I hope I don’t get burned again like I did with ES. I’m getting to old for this BS. 🙂

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  18. Michael says:

    BREAKING NEWS! BREAKING NEWS! BREAKING NEWS! BREAKING NEWS! BREAKING NEWS! BREAKING NEWS!

    AMC PAYS ITS APPRAISERS BEFORE THEY GET PAID FROM THEIR VENDORS!

    As the Accounts Payables person and Compliance Officer for our AMC (Core Valuation Management, Inc.), I can tell you that the only reason an appraiser does not get paid is because they have not submitted their W-9 to us. We pride ourselves on paying our appraisers within 10 days or less after report submission. Our company was founded by seasoned appraisers who understand all this profession entails. We have two Certified Appraisers on staff conducting reviews prior to lender submission and this should be a requirement for other AMC’s as well . We have even gone out and obtained a large line of credit in case of emergency so we can continue to pay our obligations to our appraisers. We have had NO claims in our 6+ years for non or late payment to appraisers. These other AMC’s that continue to slow or no pay people for services provided is shameful. I know you loathe the idea of us (AMC’s) but some companies actually manage their finances correctly, treat appraisers with respect and are in this for the long haul.

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  19. BenT says:

    I would like to advise all appraisers out in Southern CA, not to do business or accept any orders from Got Appraisals. I am owed fees for 5 reports total since Feb and April 2017. At least 2-3 people at this company has always said, “you are setup for payment on so and so date”; after 30-45 days later I have yet to see any payments for the 5 reports that I am owed. Now I am still waiting and it’s Sept 2017. People from this company will continue to lie to you. I am hoping they order another appraisal from me soon so I can hold that report hostage until all invoices are paid in full before I will submit that report to them. Apparently I am not a lone victim of Got Appraisals since reading theses blogs.

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    • Bob says:

      Yes, run like hell from GOT Appraisals!!! It took me 4 months to get $75! When they finally sent it to me they ordered a full appraisal the next day. My reply, “For you guys? Send me $2,000 for a retainer and I will work off of that. I schedule once payment is received.” Crickets.

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  20. The only question I have is WHY these people are not getting turned in to BREA for non payment or a claim against their bond.

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  21. Unfortunately, this issue could be a precursor and a dire warning of what lies ahead.
    Why do I say this?
    PIW primarily.
    Reduced loan volume secondarily.
    All or most AMC’s will likely become marginalized at some point in near future if not already;
    One-by-one various AMC’s will fail as the GSE’s PIW’s increase, combined with an overall decline in mortgage originations.
    Appraisers will be left holding the bag. Don’t be one of them. Watch receivables closely.
    Automation of this process and the elimination of labor is considered progress due to a reduction of costs and turn-times, without adding a statistically measurable risk factor.
    For some reason appraisers have been under the mistaken belief for years that they can’t be replaced. The time has come.
    The first clue will be “slow pay” by AMC’s.
    The next clue will be “no pay” by AMC’s, followed by a letter describing the bankruptcy proceedings and your rights as an unsecured creditor. If lucky, may get 10-25 cents per dollar owed.
    Knowing this, one can’t rely on any one client or AMC for more than maybe 10% of one’s “on-credit” business, or, be willing to suffer the consequences. COD’s may be in order.
    This has happened before but for different reasons. This time will be more permanent in nature. Like what happened to Travel Agents, for example. Here one day, gone the next.
    Help is not coming.
    The BREA or other licensing agencies won’t step in to be your bill collector. Maybe rescind an AMC’s license.
    Craig Gilbert, SRA, CRP, SCREA

    CRAIG GILBERT APPRAISALS
    Certified General Appraiser/State Lic. #AG004777

    Professional Appraiser for 42 years (1975)
    Court Appointed 730 Expert – California Superior Court
    Litigation Support and Forensic Consultant
    Designated Expert Witness in State and Federal Courts
    Testified as Expert Witness in California, Nevada and Texas
    Estates, Trusts, Divorce, Tax Basis, Bankruptcy, Partition Sale, Price to Sell, Date of Death, Property Tax Appeal, Relocation, Fractional Minority Interests, Partition Sale, Buyout
    Fraud Investigation, Retrospective, Review, Loss Mitigation, Finance, Eminent Domain
    Apartments, Industrial, Office, Retail, Land, Subdivisions, Mobile Home Parks, Special Purpose, Proposed Construction
    Residential – SFR’s, Condos, PUD’s – From Simple to Complex and Luxury to $20 million
    Full and Partial Interests – Leasehold & Leased Fee Interests, Partnership Interests
    Clientele include Law Firms, Attorneys, Trusts, Estates, Financial Planners, GSE’s, Financial Institutions, Private Individuals, Fortune 500 Companies
    Member of the Appraisal Institute – SRA Designation since 1980
    Member of Worldwide Employee Relocation Council – CRP Designation; Relocation Trained
    Founding Member – Relocation Appraisers and Consultants (RAC) 1990
    Member – Forensic Expert Witness Association (FEWA) – Secretary Orange County Chapter 2017
    Member – Association of Certified Fraud Examiners (ACFE)
    Broker/Realtor member – National Association of Realtors (NAR) –  California Association of Realtors (CAR) – Orange County Association of Realtors (OCAR)
    MLS Committee Member 2017, 2016, 2015 (OCAR)
    2016 – Winner of National Report Writing Contest sponsored by Worldwide ERC and RAC
    Meritorious Service Award 2015 – Worldwide Employee Relocation Council (WERC)
    President’s Award 2011 – Worldwide Employee Relocation Council (WERC)
    Former President – Society of Real Estate Appraisers – Orange County CA Chapter
    Former Chief Appraiser – Keystone Savings, Household Bank and San Marino Savings
    R.E. Broker since 1984 (State Lic. #00912439)
    B.A. Business Administration – Finance & Marketing – CSUF 1976
    Office: 714-847-8087  Mobile: 714-356-0000

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    • Good advice Craig. I’m seeing similar hand writing on wall. Special Report by ValuationReport ezine quoted FNMA rep as saying loss of appraisal work should only be about 4 appraisals per year per appraiser, but they didn’t say what that number was based on. Was it calculated on 80,000 appraisers? 76,000? Either way its still a lot of work (304k to 320k assignments a year).

      Since about half of appraisers are commercial, then the numbers could be twice the per capita I ask about above. Again, still not a huge dent  but it could be a few thousand dollars a year per affected appraiser.

      Some firms are also setting themselves up to be national desk top or hybrid broker BPO/appraiser type firms.

      Lastly, I can see a scenario where FNMA could go to all big data hybrids. My GSE loan work is near zero by choice right now. I’ll stay on the HUD list and may join a VA panel if there are openings but frankly I just don’t want anything to do with FNMA or Freddie anymore…or anyone that thinks their processes are reasonable.

      SFR work is more of a filler to cover overhead or augment cash flow while commercial jobs are pending. So far I get enough of that for estate or forensic work to not need GSE work now.

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      • Baggins Baggins says:

        Somewhere I heard that less than half of the licensed appraisers participate in mortgage lending origination.  Double the figure.  Any way you slice it, the appraiser takes another substantial hit.  It’s not just the reduction, it’s the loss of simple bread and butter work which comprises an important portion of the over all work load.  If everything coming through is high risk, high dollar, the fees just went up.  As usual with government intervention, they ‘fix’ one problem, and create two more.  The future generation of appraisers, if they do not have simple work to cut their teeth on, will be more challenged than ever.  These changes are likely to result in a much higher cost to consumers over all than they may save the select few who take waivers.  Our prices are low because of volume.  Cut the volume, double the price.  They could have saved consumers more money and improved the standing of the appraiser populace but instead they chose to do the opposite.  Typical big government, one hand can not see what the other is doing.  I’m anticipating a straight 20% or more volume drop.

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  22. Thomas Giraldin says:

    PCA Appraisal Manager

    1547 Palos Verdes Mall, # 116
    Walnut Creek, CA 94597
    925.944.4848 office
    925.407.2766 facsimile
    855.897.4808 toll free

    I did an appraisal for this company on 6-5-2017, they agreed to my fee of $450. Thew have only paid $350, (In Aug) and told me I’m at the bottom of the list and he has more important things to do and it is my tough luck.. I have repeatably called and to not get a call back. Their State Registration # is 1265, for CA

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    • Thomas, file a WRITTEN complaint with BREA. They don’t normally get involved in payment disputes BUT if an AMC agreed to a specific fee and then did not pay it, they may. They also aren’t fond of arrogance on the part of vendors or AMCs and it may just catch their eye.

      They have written complaint forms accessible on their website. Download and fill out. Good luck! At a minimum inquire about procedure for filing claim against AMCs state bond…and actually do it (file claim).

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Slow Pay AMCs

by Dave Towne time to read: 2 min
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