AMC Non Grata
I’m coining the phrase AMC non grata…
There’s an old, accepted diplomatic term being used by US government folks these days: “persona non grata‘. It refers to a diplomat or other approved foreign nation person being involuntarily removed from the host country, on very short notice. In the most recent case it applies to Russians being expelled from the US due to the alleged actions of their government in the last election.
‘Persona non grata’ got me to thinking. We have instances in our profession where AMC’s become expelled from our businesses. So I’m coining the phrase AMC non grata to describe that action. This has happened with appraisers far more often than AMC’s themselves, and lots of other people connected to mortgage lending, want to admit.
Today, very reluctantly, I decided to invoke AMC non grata with an AMC I have not worked with before who asked me to do an assignment for them, at a rural mountain valley lake in my county, about 25 miles from the nearest interstate highway and other urban areas. It takes about an hour to drive there from my office – narrow two lane winding roads. This particular California based AMC is joined at the hip with one or maybe two relatively small lenders in their home city. The AMC’s only appraiser-experienced key employee is their ‘Chief Appraiser’ whose state license and home is near Hilo, Hawaii. (Read again where this AMC is located.) None of the owners, key managers, or report reviewers identified in their 6 page document are appraisers.
I will compliment this particular AMC because the appraisal assignment coordinator actually called me on the phone to ask about my interest in helping them with the assignment. I was told no other appraiser the coordinator had talked to were willing to do the assignment at this lakefront home. I agreed to do so because I have done enough assignments at the lake to be geographically competent, and unafraid of the potential complexity due to my experience.
The coordinator and I discussed MY policy for what I do not include in reports (license & E&O), just in case these items are normally ‘required’ by this particular AMC. The coordinator agreed that a report could be delivered without those items included. I accepted the request to ‘sign up’ with the AMC, sent them my ‘stuff’, and then accepted the assignment, at a higher than typical lender approved fee and reasonable due date.
Then the fun began.
This AMC includes with their assignments 6 pages of single spaced “thou shall’s” and “you musts” – many beyond normal client or GSE requests. Of course, license and E&O were among those items. I began to realize any report review would be based on a checklist examination performed by those non-appraisers based on the 6 pages (and probably others), and my back end involvement with the report and them a few days or several weeks after submittal would be extremely frustrating. To avoid that situation, a new report template would have to be designed just for this particular AMC, to help get the report through their initial review process. That would take extra time… for a one hit wonder AMC that probably won’t have more than one future assignment per year in my area.
I decided to consult peers to see what experiences they had with this AMC. Most responses were not favorable, and the one that was included a reference to a ‘custom’ report template just for that AMC. That’s fine and makes sense, if enough assignments are forthcoming. I have templates designed for the specialty lender client for whom I do multiple reports monthly.
To be honest, this has been a gut wrenching experience. I don’t like bailing after accepting. But I also don’t like the possibility of what will happen after I send in the report, evidenced by info within the AMC’s own documents, and based on my nearly 16 years in this business dealing with low echelon AMC’s and their minor echelon lenders who think reports have to contain all kinds of items unrelated to the actual valuation process. Most of my current clients are 1st tier local or regional lenders, direct lenders based in other states, or superior AMC’s who respect appraisers for the service provided. I appreciate working for them.
So it was a day where I communicated AMC non grata to this new client.
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I read the article and honestly I could go in several different directions with my comments, however not to throw Dave under the bus, but I think a large portion of the older establishment in this business is out of touch. Some have said that up to 80% of all residential assignments now get filtered through an AMC, and I would bet that a connected percentage (20%), refuse to work with them (for them). If this 20% is leading the industry without the daily, weekly, and for the past 8 years (HVCC 2009) the full understanding of what has been a slow rolling tsunami, (say scope of work / “thou shall’s & “you musts”) than the wake up moment is way too late. Six pages of guidelines is so 2009 as many current lenders and AMC’s work from 12 pages of AMC guidelines with an additional 6 to 10 pages of overriding lender specific requirements. With such wide ranging expectations, EVERY ASSIGNMENT IS NOW A ONE OFF. Again, the time to address such issues was 8 years ago as the 6 to 20 page engagement letter is the norm and not the exception of the day.
Yes Bill some of the older establishment In this busniess are out of touch, just one of the many things wrong with this profession.
Again, this is not to throw Dave under the bus, but per available Veteran Affairs fee schedules, the state of WA pays $800 for a 1004, $850 for a 1073, AND $1,200 FOR A 1025 FOUR UNIT. Its great pay if you can get it, but the reality for most in the industry is below C&R fees by way of the AMC split fee machine.
But of course Bill I was not/you referring to Dave either. And yes fees are a joke from where I’m from too.
My advice to you would be to BAIL! Feelings have nothing to do with this it’s purely a business decision. Please listen to your gut (16 yrs of experience), your peers and BAIL! I was in a similar situation and walked, but unfortunately my colleague did not. It took them a month of back and forth revision request, another four months and after contacting the state to get paid. Learned from their lesson right quick.
I get calls periodically from AMC’s asking to join their panel. After extensive online research, talking to peers and checking with the state(s) registry 99% of the time I say no. The past two times the AMC’s were not licensed in my state. One stated it was a clerical error and the other said the state registry was wrong.
Just my opinion though. Good luck to you.
More like this…
They should pass a law banning the phrase. “Please give us your best fee and turn time for the property at 123 Main St” Would you say walk into a doctor’s office and say I want the cheapest & fastest laser eye surgeon! (seeing is over rated) Or I’m on trial for my life, give me the cheapest & fastest attorney. (that way I’ll get to jail faster) But only when it’s the biggest purchase/investment of ones life, anyone who will work for $200 is good to go, meanwhile that awful appraisal will get securitized, given a AAA rating with only the tax payers on the hook. UNBELIEVABLE THE AMC WORLD IS!
Stand up to the AMC people or they will run over you. You have to take a stand to petty addendums and scanning in additional info specific to the AMC. Get rid of the AMC and a lot of your problems will go away. If you are complacent and think that the time has passed you are wrong. If you do not accept an AMC’s conditions they will soon get the hint. I have many times taken the AMC off of my approved list.
Yeah, the way I see it, the focus needs to turn to fellow appraisers. If you are in business for yourself, and you cannot control how things are done, how long it takes, what your time is worth to protect your legitimacy (license) and liability, then you don’t have a legitimate, free enterprise business. If you work as a staff appraiser and the amount of hours you have to work to make a decent hourly wage, and the only way you can increase your profit is to work more hours and your subjected to pressure from a superior to do things you feel are unethical or bring in certain numbers, you shouldn’t be there. Everyone else in this business is seeking and making more profit but you!
The last three calls I’ve gotten from people seeking experience hours have been completely lied to by lenders, AMC’s and banks about what today’s appraiser deals with. Potential trainees have told me that they have been told that they could make $400.00 for 3-4 hours of work with an unlimited amount of available work.
Then you have appraisers that get on blogs and throw 95% of the comments under the bus because they are doing OK, instead of recognizing that they must be in a unique situation where the nationwide – one rule fits all, AMC rules work for them.
Let us not forget, the people that are making appraisers life’s impossible are the same people responsible for “the big short” and the recent Wells Fargo, fake accounts scandal, to name a few. Real criminals
And finally, this AMC mess continues to go on in my area because of the huge oversupply of appraisers, perpetuated by the banks/amc’s. A proposal by an AMC or bank to give you as much work as your appraisal company can handle, and you increasing your appraisal staff, may make you more money in the short term, but will devastate you in the long term, if the rules remain the same. Those trainees will eventually want a bigger piece of the pie and can get it by undercutting your fee!
It doesn’t take a genius to see that both Appraiser Management & Managed Health Care are failed business models. Both being based on the parasite model which provides no added value to the host or the end client.
The results are a little more dramatic when it comes to health care obviously. This is how well the Humana business model works:
“On May 30, 1996, Linda Peeno, a physician who was contracted to work for Humana for nine months, testified before Congress as to the downside of managed care. Peeno said she was effectively rewarded by her employer for causing the death of a patient, because it saved the company a half-million dollars. Peeno stated that she felt the “managed care” model was inherently unethical.”
Would love to see statistics on how many appraisers lost their businesses and homes because of HVCC. I suspect that a few lost their lives as a result forced AMC feeding as well.
That is exactly right Retired Appraiser
In this weeks solicitation mailer: “A veteran appraiser who specializes in doing desktop appraisal reviews reveals… (Ron Maloney) / How a middle aged technologically challenged appraiser – with hunt and peck typing skills – gets paid an average of 5634 a month to review appraisal reports from home (WITHOUT PAYING FOR A SINGLE DATA SOURCE!)” / “Can you believe it? 45 jobs in over 4.5 days! I would never have gotten this far without your tutelage, leadership and expertise in this appraisal niche. Hey, I might just make some serious money going forward!” – Steve G., NJ. /
So lets break down this ‘getpaidtoreviewreports com.
5634 monthly income divided by 45 jobs = the $125 desktop.
Betcha that consumers still paid upward of 250 or more per report. I charge 250 minimum, usually 300-350 range. So if this guy gets 125 each, he’s most likely bribing the amc or in other words; providing a thing of value to be the preferred selectee over and above other appraisers. (Appraisers whom may have more to offer than hunt and peck typing skills. How pathetic, I type 100 wpm.)
The industry corruption continues, and it’s out there for everyone to see. Ron Maloney: Whois reveals that would be Ron out of NY, hosting his own getpaidtoreviewreports website. aka; pcainc collateral analysts. The hundred and twenty five dollar reviewer whom completes approximately 1.125 desk review reports per hour and his primary clients are amc’s. Did this guy just admit in a mailer solicitation that he’s operating incompetently without even paying for the local MLS?
I think most review appraiser get around $20-25 per.