Posts tagged Appraisal Management Companies
Citigroup will pay $7 billion to resolve claims it misled investors who purchased shoddy mortgage-backed securities that helped lead to the financial crisis six years ago, Reuters reported July 14. The deal includes the largest civil fraud penalty ever levied by the U.S. Department of Justice. The multibillion-dollar settlement is more than twice what many analysts expected but less than the $12 billion the government sought in negotiations with Citigroup.
All those who argue about the causes of the real estate crisis cannot discount yet another billion dollar settlement. Over and over again we see large settlements for mortgage securities fraud, where the problem was not with the appraisals, but (more…)
At least one appraisal management company (AMC) put a new accent on appraising by having the point of contact be in another country—specifically, a call-center in India. According appraiser Bill Streep, this is how the conversation went:
Bill Streep: “Hi, this is Bill.”
AMC Staff: “HELLO! Bill. Could I please speak to Villiam?”
Bill Streep: “This is Bill.”
AMC Staff: “Yes, Bill. I need to speak to Villiam.”
Bill Streep: “My name is Bill, it’s short for William.”
AMC Staff: “Yes… (insert long pause) Could I please speak to Villiam?”
Bill Streep: “This IS William.”
AMC Staff: “No, this is Bill. I need to speak to Villiam.”
Bill Streep: “Hang on…” I set the phone down and shuffle some papers around.
Bill Streep: “Hello, this is William.”
AMC Staff: “VILLIAM! HELLO!”
Bill Streep: CLICK.
While the above story is funny, wasting time and money are not. Ever since AMCs gained prominence, appraisers have lamented having to deal with inexperienced AMC staff who have little or no (more…)
One of the requirements of your job as an appraiser is getting to the property to appraise it. Unless you are appraising a property within a few blocks of your own house or office, chances are that you will be driving there. Today, the costs of driving — higher gas prices, higher insurance premiums and higher maintenance costs — have gone through the roof.
This got me thinking: the cost of almost everything that we, as appraisers, need to do to successfully perform our job has increased substantially. Higher insurance premiums, higher costs for the tools required by USPAP guidelines, higher vehicle costs, and higher costs associated with working for an AMC means we forfeit a large portion of our fee. What we’re left with does not give us much purchasing power.
Let’s rewind 20 years
Two decades ago, gas cost about a dollar per gallon. Let’s face it – almost everything (milk, eggs, etc.) was cheaper, including obtaining and maintaining your appraisal license (more…)
Many Appraisal Management Companies are now demanding that appraisers change the square footage details listed within their reports. Why? Because they saw a different number on Zillow® or in public records. How have we gone this far wrong?
Appraisers generally turn first to their own files for square footage details. Next, they turn to the MLS, which is touted as “the most trusted source of real estate information in the world.” Then, if there are no other options (like in the many areas where the MLS does not report any square footage details), appraisers are forced to turn to local tax departments to get their square footage details. And often, those details change home values, dramatically. In many states the governing real estate authority clearly states that agents should NOT rely on the information in tax records. Anyone who has ever worked around the real estate industry knows just how unreliable tax numbers can be. Those square footage numbers were created by and for the tax department, NOT to be used in the real estate industry.
Companies like Zillow® and Trulia®, etc, most often get their square footage details from those same public records, that everybody else seems to know are unreliable. Then, along comes these appraisal management companies (more…)
You Are Being Robbed Blind (24 Hour Membership Deadline)
AMCs are concealing their profits within YOUR appraisal fee, and using coercion to drive down YOUR income as far as they can. This government-permitted process allows them to rob you blind while building their appraiser-squeezing power even stronger.
NOW is the time to take a stand to fix this broken industry and the career you have spent a lifetime building. The Appraiser Prosperity Coalition was formed to fight for the legislative and regulatory changes needed to save this devastated industry. If you are willing to join us today, we can defeat the bullies and reclaim your career! (www.AppraiserProsperity.com)
Attention! Our funding deadline is 24 hours away. We need your help to save the profession, and we need it fast. Please read the rest of this email, review our web site, and strongly consider confidentially joining this noble cause today! (more…)
ASA, NAIFA Tell Banking Agencies that Proposed AMC Rules Fall Short on Guidance, are Inconsistent with Congressional Intent2
In comments filed June 6 with several federal banking agencies, the American Society of Appraisers (ASA) and the National Association of Independent Fee Appraisers expressed our concerns that rules proposed to regulate appraisal management company (AMC) conduct lack sufficient detail to allow for effective implementation. Additionally, the organizations expressed concern that some provisions of the proposed rule depart from Congress’s intent when the enabling law was included in the Dodd-Frank Act, and could negatively affect the overall public policy goals.
In the comment letter, ASA and NAIFA cover numerous concerns with the proposed rule, including:
- The lack of detail regarding the treatment of appraisers by AMCs is insufficient to allow for consistent application by the numerous federal and state agencies who will be required to enforce these rules;
- The absence of a specific, enumerated process in the rule under which appraisers and others can level complaints against AMCs who fall short of their responsibilities under both these rules and the existing Appraisal Independence rules;
- The letter strongly objects to the decision to (more…)
For the past two months, VaCAP has participated in a networked council consisting of 13 professional state appraisal organizations in responding to the Agencies request for comments of the Proposed Rules on Minimum Requirements for Appraisal Management Companies:
This letter is in response to the Agencies’ request for comments on the Proposed Rules on Minimum Requirements for Appraisal Management Companies. The undersigned represent a networked council of professional state appraisal organizations. We appreciate this opportunity to comment and thank the Agencies for their work and interest in creating and implementing appraisal management company (AMC) regulation.
The proliferation of AMCs is a relatively recent phenomenon, resulting from the May 2009 Fannie Mae implementation of the Home Valuation Code of Conduct (HVCC)/Appraiser Independence guidelines.
By their design, AMCs’ operations cover an extremely large amount of geographic and lending territory. As a result, they handle a tremendous amount of monies and interests associated with the various services they attempt to offer to lenders and consumers. Many AMCs not only supply appraisal services, but also title and other real estate related services. The potential for a single AMC to affect an enormous number of transactions should not be underestimated. Our members have already witnessed several large AMCs closing their doors without notice and filing for bankruptcy.
The professional appraiser’s business, as well as the appraisal profession, have been decimated by the increasing market dominance of AMCs. Trust and credibility (more…)
Does anybody miss the good old days of having to deal with the mortgage broker? After spending about 53 minutes on the phone with an appraisal management company, who will remain nameless, I am almost missing the good old days myself.
I originally called, because the appraisal management company called to see if I would take a forensic retrospective review for a new client they just acquired. This of course is a Fannie Mae client, and any of us who have dealt with Fannie we know there is a specific format, guideline and style in which they want their reviews worded.
Despite my better judgment I agreed to take the assignment. Having working in the fraud investigation department for Fannie Mae for the better part of eighteen months, and having had more than twenty years in experience in residential review I felt adequately up to the challenge.
The problem I encountered was that the property was a hypothetical appraisal. That is to say the report was conducted on 5 acres (more…)
I hear a lot from appraisers concerning their interactions with various appraisal management companies (AMCs). Many keep wondering why appraisers are licensed and strictly regulated while it seems that AMCs for the most part have been left to do whatever they want. That was the case for a while; today the majority of states have already imposed regulations on AMCs. Currently, as part of the Dodd-Frank Act, a group of agencies are working together to set federal guidelines for AMCs. They are looking for feedback on these proposals and they seriously consider all the feedback they receive. Below is a summary of the proposed requirements written by Neil Olson, FNC’s General Counsel, outlining what’s being planned for the new regulations. Read through this outline and then take a look at the proposed regulations by following the link below. If you want the agencies to hear your thoughts on AMC regulation, now is your chance to be heard.
On March 24, 2014, the federal financial institution regulators along with the FHFA and CFPB issued a proposed regulation entitled Minimum Requirements for Appraisal Management Companies.
These proposed regulations arise from (more…)
Dear Appraiser Colleagues,
Awhile back, you responded to a request from VaCAP to supply your e-mail address to participate in an upcoming Customary and Reasonable Fee Survey to be conducted by the Virginia Center for Housing Research and the Virginia Tech Program in Real Estate.
This communication is to notify you of the survey’s eminent release. Please look for it to be sent to you via e-mail in the next couple of days.
Your participation in the survey is vital to the success of this endeavor. Please take the few minutes necessary to complete the survey; it should only take 5-10 minutes.
While Dodd-Frank explicitly excludes (more…)
It is all-too-rare that we hear positive news regarding the appraisal profession. There is an awful lot of complaining that goes on, most of it justifiable, but little good news that gets shared. Part of the problem is that there is no central source for information regarding our profession which appraisers might utilize in order to find out what is going on across the country and affecting our profession, and could be used to enhance our industry and our citizens in our own state.
From what I have seen, most of any good news is being generated on a state basis. Every small victory in one state can be viewed as a seedling for development and further improvement in 49 other states, most especially including our own great state of New York.
I thought it might be a good idea to share some good news, and perhaps others can add to the list. Please feel free to comment below with any other good news you wish to share or comment. And keep in mind, these tidbits are only based on information I have come across. Who knows how much other good news there is, which I am unaware of.
Alphabetically by state:
Thus far the housing industry has been applying “Band-Aid” solutions to the bigger real estate crisis. There are several problems going on at the same time, all contributing to the big picture, which is bleak to say the least. One true crisis in the real estate industry is an “information crisis.” This information problem, trickles down to appraisals, lenders, and ultimately, mortgage investors. Standardization, national guidelines, and disclosures are the only way back from this nightmare (i.e. the RESPA disclosure. One fee on the good faith estimate for appraisal is all consumers see). Current RESPA guidelines virtually allow AMC’s to work in the dark, often not even disclosing to their clients what they pay for the actual appraisal reports. In a world full of guidelines and rules, how does this happen? How can this possibly NOT be a conflict? And, how can consumers NOT suffer from this lack of disclosure? The potential for abuse is enormous, but no one is talking about fixing this problem. It’s tunnel vision – let’s concentrate on appraisers and we’ll worry about these other problems later. This just makes a bad situation worse. There is no improvement in the quality of appraisals. In fact, it is going in the opposite direction.
As appraisal fees go downward, quality is going in the same direction. The best appraisers, who have invested years and years in building their careers don’t want to work for a company that they have to check in with every 12 hours, and get treated (more…)
One of the hottest topics right now in the appraisal world is that of non-lender work. I am probably asked a question concerning non-lender appraisals a couple of times per week, at least. “How do I do more work for attorneys?” “How do I go about marketing to home owners?” “I want to work with more real estate agents, but I am not sure how to garner their trust.” Okay, so that last one was not a question, but you get the point.
Financial appraisal work through AMCs or local banks has slowed a great deal over the past few months. Appraisers I speak to report a 10% to 40% decrease in lender work since November. Why is this? There are many reasons, but the biggest has to do with the interest rates and the fact that many borrowers are ‘refi-ed out.’ There are some home equity line of credit (HELOC) loans being made and some first mortgages, but the volume is in the doldrums compared to where it has been. This has led many to look harder at non-lender work as a supplement or even a completely new business model for an appraisal firm.
Personally, I have focused on non-lender work for the past 12 months. It is certainly a different approach than what we are used to with (more…)
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…)
A group of Real Estate Appraisal experts committed to the preservation, protection and enhancement of the appraisal industry has formed the Appraiser Prosperity Coalition (www.AppraiserProsperity.com), 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…)