AMCs Deceptive Fee Skimming Exposed in Lawsuit
The class action lawsuit, Timmins v. Clear Capital, et al., filed on November 1 in the Superior Court of California, County of Stanislaus, sheds light on the deceptive and unfair business practices allegedly perpetrated by ClearCapital.com, Inc., Core Valuation Management, Inc., and Rocket Mortgage, LLC in relation to the appraisal fees charged to borrowers in home mortgage transactions.
The complaint asserts that these defendants engaged in a deliberate scheme to misrepresent and inflate appraisal fees, which were significantly higher than the actual cost of the appraisal services rendered. This allowed the appraisal management company (AMC) middlemen to line their pockets at the expense of unsuspecting consumers. According to the lawsuit, Rocket Mortgage mandates appraisals before closing on home mortgage transactions and employs AMCs like Clear Capital and Core Valuation to hire appraisers. However, while Rocket Mortgage determines the “appraisal fee” that borrowers are required to pay at closing, the AMCs retain a substantial portion of this fee for themselves – often an astounding 60-80% or more based on recent research – despite providing no tangible benefits or services to the borrower. The appraisers who actually perform the labor-intensive appraisal work, which includes visiting the property, conducting thorough market analysis, and preparing the detailed appraisal report, receive a mere pittance of the appraisal fee paid by the borrower.
The lawsuit further highlights the lack of transparency. Rocket Mortgage and the AMCs actively conceal this fee skimming from borrowers, never disclosing the proportion of the “appraisal fee” that is pocketed by the AMC rather than being paid to the appraiser. The lawsuit cites damning research submitted to the Consumer Financial Protection Bureau (CFPB) in August 2024 by the Appraisal Regulation Compliance Council (ARCC), which exposed this egregious practice of misallocating significant portions of appraisal fees across numerous states, including in California. In some particularly outrageous cases, Clear Capital and Core Valuation Management retained as much as 84% of the appraisal fees paid by borrowers, despite providing no discernible added value. To compound the impropriety, the complaint asserts that AMCs actively prevent appraisers from disclosing their actual professional fees, deliberately keeping borrowers in the dark about the extent to which they are being fleeced. This legal action seeks not only restitution for the wronged borrowers but also injunctive relief to put an end to these deceptive and unjust practices perpetuated by the defendants.
- AMCs Deceptive Fee Skimming Exposed in Lawsuit - February 25, 2025
- AMCs Overcharging Consumers? Morgan & Morgan Investigates - February 14, 2025
- Appraisers Freed from DEI Propaganda - January 23, 2025
Prayers that we can survive until something is actually done to stop this theft of our time and resources. What will replace the CFPB or will it be revamped to actually work for consumers and not just sue large corps in the attempt to gain headlines? Time will tell but we are running on fumes.
Rut Roh!!!
Additional exposure!
Has this contributed to the pending legislation in Oklahoma?
Will it spur further pushback by the states?
Oooohhhhh, get your AG’s attention?
Where is the Appraisal Institute in Oklahoma ?
They support Appraisers so much?!?!?