Closed for Business, Sorry Folks!
For those who are not familiar with what an AMC is, it is short for Appraisal Management Company. They are not new, but since the adoption of the Home Valuation Code of Conduct, the number and the frequency of their use have increased. They are the order manager for the lender and ensure appraiser independence. If you have not already read “What’s Not in Your Wallet” or “Round and Round!”, go get a little more familiar before reading this.
AMCs manage appraisal orders. They find the appraisers to give the orders to, and are supposed to provide quality control reviews of completed appraisals prior to submitting them to the lender. They are meant to help facilitate the appraisal process so that the lender can make a lending decision. They also collect the appraisal fees from the lender, the consumer, and then pay the appraisers for work done.
Over the course of the past 10 years, we have seen many AMCs collect the money you, the consumer, pay to them with which they are to pay the appraiser they hired. Many AMCs do a good job paying appraisers. However, there are also many that leave appraisers with unpaid invoices and very little recourse to recoup lost revenue.
As it happens, there were big AMCs, like AppraiserLoft, who pocketed millions of dollars from consumers, only to never pay the appraisers. When they closed their doors, they failed to pay appraisers for completed work. JVI Solutions and Evaluation Solutions also left appraisers high and dry when they shut down operations. Companies like Newtown AMC, Maverick AMC, and Nationwide AMC, collected the appraisal fees, but never paid the appraisers they owed when they closed their doors. These companies were all owned by the same guy who went on to form another AMC, Atlantic 1. And yes, you guessed it! Atlantic 1 is also not paying appraisers. Valuation Concepts as well as COESTER VMS are the newest additions to this trend. They are not answering calls or emails, leaving appraisers with significant unpaid fees. Some AMCS are closing down and are trying to settle for pennies on the dollar with appraisers. This is a major concern. Hard working appraisers are not getting paid for their work. I am sure you would be upset if your company did not pay you. So here is the question?? Where is your money, and who got the appraisal fee? Good question. Looks like some of these current and former Appraisal Management Company owners are living much better than the rest of us, at our expense.
Under Dodd Frank, lenders are supposed to be responsible for the Appraisal Management Company they have engaged. However, that is not the case. Many lenders refuse to take responsibility and they refuse to pay the appraiser even though you, the consumer, paid for the service. You paid for the appraisal and the appraiser who completed this service gets nothing. Ask yourself this. Is your mechanic, plumber or your lawyer working for free? Are they being managed by third parties who are collecting consumer payments? So why do independent appraisers have to abide by different rules than others? Why do we have to wait, at best case scenario 30 to 90 days, at worst case scenario 120+ days, to get paid? Why should appraisers risk being cheated of their hard earned money every time another Appraisal Management Company goes out of business? Why do independent business owners have to have someone else collecting their money and determining how much and when they get paid? Why does it take 30+ days to get paid when you, the consumer, used to pay the appraiser directly at the door after the inspection? If you pay for the appraisal up front before it is even ordered, then why can’t the appraiser be paid the moment the appraisal is completed? When I do work directly for the consumer, I get paid right after the inspection and before I leave the property.
Independent appraisers are subcontractors NOT employees.
This system is broken. It needs to be fixed.
- Look in the Mirror - February 27, 2023
- AMCs Take a Sizable Cut of the Appraisal Fee - October 5, 2022
- Proposed Rule to Eliminate C&R Fee Tabled - July 21, 2022
I’m not defending AMCS, especially Coester, but I do know the danger is that they don’t get paid by the bank in 30 days either. If they have too many clients that pay out of escrow then they don’t get paid which is why they probably don’t pay you.
Oregon has a law that the appraiser must be paid within 45 days. But that’s the AMC. The banks can’t keep the borrowers appraisal fee despite popular belief. So they can either have the borrower pay the AMC directly, they place the fee in a trust account to be paid or they pay out of escrow.
Banks and CUs usually have a good system of making sure appraisers get paid by paying the AMC on a timely basis in compliance with laws. Those are the good clients. The clients that are a danger to the AMC and thus the appraiser are the broker clients who don’t sell directly to FNMA / FMAC.
Appraisers should do their homework about who they extend credit to. I’m chasing a private lender around because despite the recommendations their borrower did not pay me…and won’t because they didn’t get a loan. So now I have to file a complaint.
I’m beginning to think the whole system needs to go to a VA type system managed by a government entity that insures that the appraiser gets paid.
The VA doesn’t insure the appraiser gets paid. We have chased many payments for VA requests.
Wrong…. I have been paid for every VA deal I have ever done. The VA will chase my appraisal fees for me after three months. And I know other VA appraisers who have also been paid on every deal. They have to put in place the way of VA works and all these problems will go away overnight !!!
Getting paid every time for VA work, yes Chris, often spending two hours over several months ($600 VA fee / 6 hour assignment) chasing for payment, common. If my gross fee is at a rate of $100 per hour, then after a maximum of a $5 late fee per month ($610), I lose $190 chasing the original $600 (2 months). I would prefer that the veteran pay the VA directly, and that the VA then pay the appraiser (direct deposit). Wouldn’t it be nice to get one 1099 from the VA at tax time, instead of again chasing lenders on our dime when they fail to deliver (for 1099s)? I had 68 unique 1099s relating to VA work last year, but yet only received 42 1099s.
This system also needs to be improved.
Seek the truth.
With due respect Bill, The VA late fee is now $25 per month. More than fair in my opinion. I always get the late fee as well. The emails I send out for late payments only take a few minutes. Most lenders pay on time and most within 2-4 weeks, the larger VA lenders for obvious reasons-volume.
VA is the way to fix all of the problems with AMC’s. It takes 1 or 2 emails from the VA for these slow pay lenders to pay up. Why? Because they are scared of losing their VA loans. Not at all like the AMC’s in this country. If the country went the same way, all lenders would treat the appraisers fairly as they could lose their ability to do loan with whomever “runs” the orders. It’s real simple, you don’t want to pay the appraisers, you lose your ability to do loans. Problem solved. No more greed, no more of the public paying high fees only to be kept by the lenders AMC. And the appraisers can lodge formal complaints against those they are FORCED to work with every day.
I love the VA and will not work with anyone else. VA does not need all the B.S that the AMC’s do, just 3 interior photos, not 35 of every component in the house. No 10-20 settled non nonsensical sales to be commented on. The VA has intelligent people who understand appraisals and will “go to bat” for us with the lenders. All “they” had to do what put the VA in charge or some other entity, VA has the lowest foreclosure rate in the country…why, because we appraisers are allowed to do our jobs without the FEAR of being cut off by an AMC for not making their deals. I see Conv. and FHA deals that are so over appraised and ask myself why?….same reason as before HVCC…the appraiser is afraid of losing future work so they “make the deal”. Example…how many billion is FHA saying they are holding due to over appraisals……The answer to all this nonsense is so simple….just not profitable for the powers that be.
We need to fix all this nonsense !!
I’m glad for you that you have had the VA collect your fees. Our VA contacts are really great but they do not chase our fees for us. Nor do they guarantee payment. My fear is that, in the current economic climate for non-bank mortgage companies, they will go out of business and not care that they lose their VA eligibility. Plus, we cannot turn down an assignment or require payment up front because of past collection issues.
We love working with the VA but we don’t get to vet all of those clients like we vet non VA clients.
Vicki, Jan Bellas at American Guild of Appraisers has obtained numerous payments through VA intercession for appraisers. Our Texas representative, Tony Palacios has pursued cases, where the lender involved DOES have to pay in advance now. VA like any large bureaucracy may have different applications or interpretations for policy from one region to another, but they ARE all bound by the same federal agency policies.
It’s worth checking. …Or join AGA and its one of the regular services that we offer our members. Contact firstname.lastname@example.org
I agree in part that the VA system is the best, and perhaps could be a blueprint for others, but its not without its difficulties. As it relates to chargeable late fees, I believe it’s up to each individual state to set a maximum amount. To my knowledge, and I hope I’m wrong, but the state of CA puts a maximum late fee charge of 10% per year, or on a $600 VA fee, $60 dollars per year, or $5 per month.
As it relates to the time to collect, how often is the point of contact not the contact of the lender, but rather is the agent, new construction sales office, etc.? How often is form 1805 missing the broker information? How often is there a targeted refinancing amount on line 34? Not saying the VA system is broken, but rather its bent.
Seek the truth.
We work with the Ohio branch, they cover 10 states. As to the others, I would assume they all work the same. Giving a refi target value is no big deal, I just ignore or or don’t even look, the house is worth what it is worth. As to collecting fees, I just send an email to the VA and they take it from there. Never a problem ! The VA understands turn times vary for all the obvious reasons we appraisers face and they support us in this regard. I would urge every appraiser to try to promote the VA way. And we get cost of living increases which are great !!! no more losing clients because our cost go up. I have NEVER had a better experience with doing appraisals as I have with the VA. I work with incredible people and get answer very quickly, why…because they are/were appraisers or have been taught right. Our fee for single family is $450 now which went up from $410 a few years back…very fair ! If you are in a market area requiring additional time and work, they allow you to ask.
The VA system is the way to go, it would solve the really big problems over night.
Except for the annoying stone age management platform which does not allow appraisers benefit of proximity related assignments, appraisers can not reject an order, and the methods lenders use where every VA borrower is a vip and the rest of the citizens, they’re nobodies in the gse realm. That’s not how it’s supposed to be. Pointing to the one singular guarantee program which is holding to traditional assignment methods is important. It’s also important to recognize what the soldiers are serving for. If surveyed, it’s doubtful they would as a majority, say; yeah screw the general populace, we got our safe loan and that’s all we’re concerned about. You can’t call yourself a dedicated well rounded appraiser if you ignore the problems in the gse realm.
With due respect, Mr. Baggins, if you try the VA way, you will never go back to the system in place. Yes, you can not decline, not a big deal. And you don’t have to bid and lose a job for $10.00, nor do you get harassed for status call and emails, some orders take a little more, but the benefits outweigh the negatives. It’s not about VIP borrowers, it’s not about guaranteed loans, it’s about fixing the current issues in the broader appraisal ordering systems, in a very easy way. The VA way. No more B.S. from these individual management companies. Or the big banks that own them. The VA never argues value, it is what it is and they leave us alone to do our jobs with no nonsense. Just my opinion after 26 years going on 27.
Been there done that. And since I don’t deal with amc’s, the only bidding requests are for true complex properties or rushes on the holidays. Easy. The VA did not correct anything, they merely did not bow to pro lender changes over the past 20 years. The VA should be careful because the 1099’s are not soldiers, have not signed similar agreements, and they’re meeting certain definitions for employees vs independent contractor engagements.
Baggs, appraisers CAN reject orders though the how and why can vary and is limited. Generally, you are expected to take every order sent to you in the areas YOU say you provide service for.
Of COURSE they treat (& expect) the veteran to be treated as VIPs! It’s called the Veterans Administration! This is also part of the contract that we signed up for when we enlisted or became commissioned. Another was VA health care.
In return for Americans being willing to enlist and risk potential death or injury in service to their country; for very low pay for 24 hours a day, 7 days a week for the entire term of their service, the U.S. of A. made certain pacts with us.
NO Vet ever need apologize for using those services. No appraiser ever need be ashamed of providing appraisal services on behalf of those Vets. Thank you fellow vets, and thank you VA Appraisers.
Baggins, I understand the VA loan is a full recourse loan. When a VA borrower defaults the Va files a lien for the unpaid balance of the loan. Their is a confusion when the VA RE sells the property and carries back financing. The FHA, Fannie & Freddie treat the foreclosure as an equal gamble for the lender and the borrower, Therefore there are other issues.
We had a va appraisal we did for an amc and when I asked for help from the va for non-payment all they did was to tell me the amc was out of business. Were they supposed to go to the lender to get our money?
The VA loan is a recourse loan, obligating the veteran beyond the value of the security.
I disagree with the part of the bank not paying the AMC most if not all get paid before the work is done. I get requests from AMCs for bids and most will say once we confirm payment we will send the order over.
I agree with you partly on this. Some do and some don’t. Many however have already been paid for the appraisal prior to it being ordered. At least ones I know of. I’m sure there are some that get quotes in order to find the appraiser and then quote the lender. But at the end of it all it still begs the question…. why must we appraisers wait 30 days plus to be paid for services rendered only to maybe never get paid.
Good on you Frank, we with good English names should stick together and protect our selves with good English law
Tanya, that is absolutely NOT a valid excuse. Many if not most AMCs collect the appraisal fees directly from the consumer before they arrange to place the orders.
Any bank that is collecting the fee direct is doing so for dishonest reasons. Without exception. Let me repeat that…without exception. They claim they need AMCs to cut down on in-house appraisal expertise overhead, and somehow we are supposed to believe that they voluntarily choose to retain the accounting and administrative payment burden for a service that they contract out to others? These are not ‘cost plus’ services. The full fee is collected. The only reason for adding an unnecessary step to the process is to facilitate fee skimming & control of the consumer.
The primary reason a ‘bank’ or other lender takes direct payments is so that THEY can control the appraisal and appraisal ordering process despite ostensibly operating through an AMC.
Loan officers have been operating this way for decades. Collect appraisal and credit reporting fees and there is far less likelihood of a borrower “jumping ship” to another competitor during the application process, where they would have to pay for another appraisal..
That is the primary reason, which doesn’t even address secondary reasons such as dishonest price fixing and fee gouging of the consumer.
FNMA no longer permits consumers to pay appraisers directly for vague and unfounded reasons alleged to affect independence. I’m willing to bet the real reasons are behind the scenes conspiracy with large title companies, AMCs, lenders and others who comprise the collective evil known as MISMO.
Having learned that major amc companies like solidifi are actually spin offs of parent title and insurance companies, I find your comment to be especially hard hitting.
I feel like closing with ‘seek the truth’ or something. Ha! I’m going to need a new tag line here.
I’m sure your experience differs than my own experience. So I’ll just defer to you because I really don’t need to be right. My experience involves a cost plus AMC experience and that’s how it works with that model. The majority of the AMCs do not operate that way because they can make more money by taking the appraiser fee.
I’m not sure why FNMA doesn’t allow the borrower to pay the appraiser directly. It’s possible, considering it was part of a bill to protect the consumer they thought it easier to make the bank give back money when the loan doesn’t go through or the appraisal is low quality and the borrower had to get another appraisal and pay for it.
Why is the borrower even paying for the appraisal? It is intended for the lenders collateral risk? Shouldn’t they pay it?
The reality is Congress required appraisals for federal funded loans. As soon as they change that law, game over. I don’t know many buyers (younger generation) who feel the need to pay 600+ to have someone’s opinion when it just can easily be done with an app on their phone.
Where were we when they brought in hvcc and then Dodd Frank? Where was our lobbyist? Where was an effort to educate the public?
The public saw 2016 and the unethical price gouging in some places. Even in a cost plus AMC, we didn’t increase our management fees. The appraiser increased their fees. 1000, 6 weeks, only to get an appraisal with issues. In some places we had no choice. No one forgets. They want appraisers gone after that. That is what consumer groups, lending groups are calling for. They don’t see the AMC and the lender, they see it was the APPRAISER.
We have a perception problem with the very public we are supposed to be promoting trust with.
The system is broken. But I’ve yet to hear or read any cohesive, United statement on how to fix the problem.
I do appreciate all you do to help this profession. I will say you have earned my respect in that regard
Improperly co mingled fees for appraisal services. Distinctly different services are expected to have distinctly separated billing. The root cause of the aforementioned perception issues.
Dave Biggers went to the hill with a truck full of appraisers letters prior to HVCC implementation. The lobbyists told him they could get the votes. Then they asked how much he was willing to pay to acquire those votes. Legislation for sale in a captured regulatory environment.
Citizens who do not understand the dangers of debt are the problem and solution in the same note. If they’re willing to trust taking on debt without checks and balances, they’ll learn in short order. This generation will be no different than the last generations, after they’re fleeced by lenders they’ll learn financial lessons the hard way.
All we as regular citizens need to do is stay as clear and far away from unnecessary debt as possible, leading by example. Also educating children through example why leasing and renting is inferior to owning and paying cash without indebtedness, aka staying away from usury, fundamental cornerstones to economic liberty.
So many issues and points. Several I’d concur with fully. Cost plus is supposed to be the desired ‘fair’ alternative. Even that suffers from undue influence since under TRID it is the loan officer that quotes the appraisal fee long before any appraiser is ever contacted to ‘screen’ the property for apparent complexity.
As for consumers, they like much of the nation has been fed the Zillow, Trulia Realtor.com and RealQuest Real AVM hogwash and few have made the effort to point out to consumers WHY those methods are so unreliable; or what the impact of over paying can be.
Taunya, “our’ lobbyists are varied as are our organizations. Some have lobbied for things that negatively affect most of us; while others have lobbied more from an altruistic standpoint.
I read a post today on Mark Skapinetz’s 100% Appraisers FB Group. Copy of CASH receipt from May 2007 for $375 appraisal fee. We do far more work today, often for lower fees than were common in 2007.
Many suggestions have been made on how to fix the problem. None resulted in unity. Appraisers are not inclined to often agree with each other.
Perhaps we need to hold an organizational Appraiser Congress Meeting of all coalitions and appraiser groups to try to develop that unified solution you suggest.
OK, ‘Skap’ we have another project for you…
There is no group of business people that I am aware of that is as stupid as real estate appraisers. I have retired from this pitiful profession but it just never stops showing me how silly our profession really is. Numerous entities MUST have our services! We are a very few professionals as a total group. We allow these AMC SOB’s to pimp us out at will. As a group we deserve every damn cheap appraisal thrown our way. Wise up people! No bucks…no Buck Rogers….tell the AMCs to do the appraisals themselves! If you do not provide the service…they cannot provide the appraisal! Let’s stop these parasites!
We have not been able to collect for a VA Appraisal due to the fact the mortgage company closed and the VA discovered that. No help.
Small claims takes two days at least, and the lender may be broke. What a wonderful opportunity for furthering your education
Lynn this is a shot in the dark. Was the ‘mortgage company’ an actual lender or merely a correspondent lender? (One that packages the loan but sells it to the actual lender). Our (AGA) Texas State rep tells me VA absolutely requires the LENDER to pay the appraiser within 30 days of the time the appraisal report is uploaded to the VA Portal.
I used to work inside a ‘mortgage co’ that was no more than a facilitator (correspondent) packaging loans for other major lenders. IF that particular deal your appraisal was foreclosed, then there is a lender someplace that owes you some money still.
Mark, you hit the nail on the head. A very good article.
AMCs are like drugs; you just have to say no. If you don’t and become dependent upon them, you could lose everything; money and credibility as well. As with any addiction, there is a cure. DIVERSIFY YOUR BUSINESS.
Based on my experience, the appraiser’s who produce the highest quality work product refuse the AMC addiction. With AMCs, the appraiser does all of the work and takes all the risk. The AMC is the one’s making the big profit at the appraiser’s expense. They are middle man paper shufflers who exist because many of the appraisers out there are not good business men.
Many of AMCs do not have a clue about the appraisal process or what a quality appraisal/appraiser looks like. Granted, some have qualified very good appraisers/reviewers on staff. Many have (I won’t dignify them with the term “reviewer”) unlicensed clerks who “look at” appraisals and go by a checklist. Many times “gently persuading” appraisers to get the number the lender wants and tip toeing around Appraiser Independence.
The lenders have the option of engaging appraisers directly but don’t want the hassle of dealing with individuals. The quality of appraisals has gone down significantly since state licensing took effect in the early 90’s and now even more so since AMCs have been dominating the profession. The fees paid by the borrowers go up; the AMC’s profits go up while the appraisers fees go down with the quality of the report doing the same.
I have 35+ years experience and am licensed in 14 states and do reviews only. 80% of the work I see is marginal at best with most of it being boilerplate. The rest is total garbage. Filing complaints with the state gets a slap on the wrist most of the time with educational alternatives being most likely.
Just my opinion based upon my experience.
I also did reviews for years, the 5-day idiotic turn time is one of the big reasons for shoddy work. If the appraiser does not have the time they need to go back to the neighborhood to do further work, they then will typically try to pound a square peg in a round hole.
I don’t agree it’s turn time unless it’s complex. It’s poor training done by equally poorly trained mentors. I switched from Mckissock to AI for my qualifying education and the difference is unbelievable. If you have people who think classes with Mckissock is sufficient education for trainees and that minimal to know input from the mentor to the trainee is sufficient, you get what we see. Garbage in. Garbage out.
In town, in a PUD, can get done quickly if one knows the market. Especially if it requires no adjustments. I’ll never be a “production” appraiser simply because I keep listening to y’all.
I happen to LIKE AI training, though it costs far more than its worth in many areas.
While McKissock may subjectively fall short, what is FAR worse than a McKissock trained appraiser is an AI Designated MAI as an EW that deliberately misrepresents paired sales; diminution claims, and then improperly applies discounts in advocacy for lack of marketability (DLOM); & discounts for lack of control (DLOC) in TICs as if it was an entity interest. The OA in this instance is an exceptionally well-educated person. If the resume is correct he is a person of influence in AI itself.
His own deposition is what will hang him with the state.
Unfortunately, neither AI training nor AI Ethics policing & enforcement is sufficient to guarantee to discourage all designated appraisers from lying in courts when they think there is little chance of being caught. All that top quality AI education and Ivy League education produced a zero credibility report that should cost this person their license.
Maybe that appraiser would have done better learning from McKissock.
Every lender client I’ve ever worked with always requires the borrower to pay up front for the appraisal (post HVCC). If a borrower pays on day one, the AMC shops for two weeks for the cheapest appraiser and the report is done in two weeks, at the time the appraisal is submitted, the borrower has often already paid +/- 30 days earlier.
AMCs are a ponzi scheme, in that the money borrower A pays on day one, doesn’t go to THE appraiser, but rather borrower M from some 30 to 90 days later pays the original appraiser. A distribution of the current income stream (Coester VMS), thus results in the inability to pay for past completed appraisals (30 days to 6 months).
Seek the truth.
The little amc companies fall into the same trap. They then sell in an infinite shell and consolidation game based on projected income figures. Which of course, are based on lenders volume figures. Which of course are based on projections. What we’re ending up with is a never ending supply of amc startups who then sell, who then are consolidated, permanently concealing the nature of this scheme because they work with too many lenders to provide effective estimates.
When I did work with amc’s, the majority of them always found a way to understate my actual income on their tax forms. I ended up constantly manually filing adjusted w forms based on my actual income which was well documented through simple manual accounting methods. In an unusual turn of events I found myself volunteering to pay more income tax because it was simply astounding the way the majority of amc’s consistently under stated the amount they paid me on irs forms. They all have earned a national irs audit as well as state based audits for fairness in consumer billing approaches.
Not fair appraisers work so hard. To get my broker license I had to take an appraisal class and that’s how I realized what a tough job it is
Thank you. Despite our usual posts, we don’t all despise or lack respect for all agents and brokers either.
My favorite is the heavy outbound calling requirement and the 1 year telecom experience expectation. Newbs. I will remain mystified why appraisers choose to keep these companies in business. I guess they like the prospect of an entire career where they are the focus of telemarketers, being calling indefinitely on a limited call list.
Could not agree anymore with this article. If this was any other business they would be finding the bodies of these AMCs owners floating in the river. Clearly we the appraiser’s have no back bone and continue to allow ourselves to be taken advantage of. So darn sad. Have a blessed holiday!
I’ve been burned twice over the past 40 years, twice too many, once by an AMC. Over the past 4 years I’ve been turning all work down that didn’t pay within 15 days of delivery and it’s worked out pretty well. I can’t imagine having thousands of dollars tied up with any AMC or any company actually for any length of time. I know this policy may not be a fit for everyone but if limited appraisers are available for a 30+ day payment assignment, then the dynamics could change. As they say, you reap what you sew.
This article is right on. Appraisers should be paid whether the loan closes or not, it is not up to the appraiser to make the loan close. Appraisals are to assist the mortgage lender in evaluating the risk of a loan request not to help them in the closing process. When I worked directly for the mortgage companies they knew that they owed for the appraisal even if the loan did not close. In those cases where the loan did not close and it was a good client that sent me a lot work I would some times agree to reduce my fee since it was coming out of the loan officers pocket. That was a business decision by me. In today’s world of AMC’s you need to know who the lender is. If it is a non-traditional loan, Hard Money loan, I insist on COD from the homeowner or the AMC prior to completing the appraisal. I have 3 on my desk this week, all have been pre paid and I can get a higher fee since nothing is going to the AMC out of my quoted fee.
If all appraisers would would require that all appraisal fees had to be paid prior to delivery of the completed report we could make it happen. Tell the AMC that you will start on the appraisal however that the completed report will not be delivered until you have received full payment of your fee.
Two can play the game, If you have invoices from a AMC that are over 30 days old when you get their next request, go ahead and accept it and them complete the report then tell them that you will send the completed appraisal as soon as they pay all invoices including the one for this appraisal. This will likely be the last assignment that you receive from them however that may be a blessing.
Contingent fee payments are not allowed under USPAP, and are against the law in most states. So, AMCs and banks make up other excuses for not paying for the appraisal.
There is no greater objection than absence. If amc’s do not operate in an ethical manner for the vast majority of their business dealings, carving out an individual term to merely protect yourself on a single order means nothing in the end. Such efforts may actually accelerate unfair billing on the consumer side.
I personally don’t care how long they take to pay me, as long as nobody is dipping into the full appraisal fee in a pay to play setting. In fact I like long payers as part of the broader income mix, that’s when there is a sudden wave of income several times a year. It’s like if you have to get so tough with the terms of individual deals, it’s frustrating and I can’t help but be compelled to seek out better standardized engagement terms elsewhere. It’s entirely too much effort to always have to carve out new terms for individual orders when dealing with companies who push that much order volume. What a sham they make appraisers go through that, I don’t understand how appraisers can even deal with them, regardless if they win or lose on individual orders.
Being paid thru escrow is a form of contingent pay. If the escrow is extended for any reason your fee is postponed, if the escrow falls thru, your pay may be canceled. The work finished and delivered is evidence of an earned fee.
Most judges will accept that a licensed contractor is due his fee as billed.
If you accept postponed payments, will you also discount your FEE?
USPAP states that you include that YOU are competent to accept and complete the job. Any challenges toward your competence would involve questioning your license as issued by the STATE.
I was subject to one of those AMC’s very frustrating! What can we do as appraisers to get rid of AMC’s they hold us hostage and take forever to get back to the lender!?
IF you are serious, about what you can do; join the American Guild of Appraisers. We are fighting full time to identify, analyze and propose potential solutions, but in the end, if appraisers don’t organize and speak as a united voice nothing happens. Contact email@example.com for more information.
IN ADDITION, you should join your state’s coalition of appraisers. Ideally, they will be best suited to monitor and respond to state appraisal issues. We are always willing to assist them. AGA seeks national solutions or solutions to those state issues that have national ramifications.
Ditech asked me for a quote, I emailed them back asking if you can guarantee payment based on your stock woes, (which I read about from appraiser blogs. ) They did not respond and thus I did not receive an order I didn’t want. Thanks for keeping us all informed and appraisers BE CAREFUL who take work from!
AMCs remind me of the old film “The Good The Bad & The Ugly; the good ones of course being the ones who have closed their doors.
Meanwhile, if the commentary samplings are even remotely accurate as being indications of the larger body of appraisers opinions; Appraisers whom work with amc’s clearly have Stockholm syndrome. They are betrayed and betrayed again. Rather than reject the fundamental reason why, the unnecessary middle management, the appraisers instead seek clever ways to adapt where they will not have to make substantial changes and will not get out from under the oppressor. Working with amc’s is pretty dang close to permanent captivity.
This past week it’s been slow. It’s an appraisal bloodbath in CO, all the new guys are scrambling and discounting and are sweating bullets because of the over all drop off which is well less than a third of the peak points only several years ago. They’re desperate and are dialing for dollars full time. Meanwhile, I landed on 4 new direct assignment panels, and also had the pleasure of shutting down a few lender managers whom dared to suggest I sign up with their amc servicers… It’s not rocket science… If the industry is in fire all around you, the proper course of action is to remove yourself from the fire zone. Appraisers who continue to work with amc’s, under any and all available terms are their own worst enemies. If they’re going to continue to promote amc’s by their patronage, I don’t see why they bother to even complain. The amc companies sold it, they bought it, end of story. There is no greater objection than absence. The free market would have wiped these middle management companies out by now, if only the appraisers allowed the free market to play its course and would stop supporting these companies.
Have been doing this (appraising real property) for over 38 years. Much has changed, some for the good, some not so good. Remember this, the good ones (appraisers) will remain, the not so good will go away. On fees, we all know what it takes to be reasonably profitable. Ones that work for little will not be here several years from now, I have seen it over and over. Just hold on during the slow periods, complete solid, defensible, market supported work and always remember you are only as good as the weakest report you complete as the appraisal gods make it the one all sees. Always keep in mind, it is not a job, it is your profession.
Well said !!!
I have not prepared an appraisal for an appraisal management company in over a decade. The last AMC I worked for sucked and as far as I know they all suck today! For some reason it seems that the typical appraiser believes that mortgage lending is the only “game” in town as far as appraisal assignments. There is a whole world of appraisal work out there that has nothing to do with mortgage lending. If you would just take a bit of time to research and become involved in the other sources of appraisal work you will be happy that you did! Just my silly opinion based on nearly 50 years of experience!
if other appraisers were more willing to help each other out in explaining how they get non AMC work it would be super helpful instead of putting other appraisers down for working with AMC’s
100% agreed, There is enough work for everyone !! We need a Union like the Va panel, here are the rules to our employment with you a**holes !!! End of story !!!
Michelle, that’s been done quite a bit both here and on FB 100% Appraisers Group. It was also a focal point of Appraiserfest down in San Antonio. Feel free to call or email anytime…er after 10 AM “anytime” (714) 366 9404. Best, Mike.
What about placing a mechanic’s lien against the property?
let’s try to assist those among us that are supporting the AMC’s and allowing them to earn millions while prostituting appraisers for chump change! I am going to provide a list of appraisal sources and I would like for everyone to add additional sources to this list. Maybe this will help bust the AMC’s ass!
City assignments,County Assignments, State Assignments, Federal projects, School districts, rural water districts, rural electric districts, attorneys, accountants, Realtors, Contractors, Plumbers, electricians, carpenters, brick layers, Your aunt Gertrude…or others from your church, bar or nudist resort…Lets all add potential clients to bust the AMC grip!
the Title of Marks article is “Sorry Folks, closed for Business”. Is the VA closed for business? They are not an AMC by definition either. Nor is this article about the VA, their panel or their payment policy. It gets tedious when the issues Mark is addressing are side tracked and obscured by non relative comparative discussions.
Cut to the quick. How or when an AMC gets paid by the Lender is NOT the Appraisers problem and a business arrangement that must be worked out between AMC and Lender! They pass the buck back and forth and Pressure must be brought to bear on that relationship
Thank you. Appreciate it. See the new article I shared today.
I concur. I don’t care how an AMC gets paid by the lender for (only) the AMC fee. I DO care how appraisers get paid. We have been prohibited from collecting directly from the borrowers at the door for the appraiser fee by the official policy of FNMA effectively forcing us to permit lenders to fix, set and quote our prices; and control how we perform our jobs..
The bank depends on closing the loan for their ‘commission’ when it is sold to FNMA.
FNMA won’t let us collect direct because we can’t be trusted not to be unduly influenced by the $400 or $500, or even $600 (used to be $350) fees we may charge for non-complex work.
The bank, on the other hand, CAN be trusted to collect our fee, or better yet delegate the collection of our fee to a third party contracted directly by the bank, but whom the bank can pretend they have no appraisal fee obligations for when their agents go bankrupt.
Of course, the banks & their correspondent lenders earning tens of thousands of dollars profit per deal can be trusted by FNMA not to be unduly influenced by greed. Nor would they ever think of using their influence over their AMC lackeys to pressure the appraisers to hit value; or heaven forbid coerce them!
Requests for reconsideration are never framed in a way to pressure anyone, right?
For the VA Appraiser’s, there is a little quote at the bottom of the order. Send that to your non-paying clients and see how fast they get that check to you!