Autopsy of a Failing AMC

Autopsy of a Failing AMC

The autopsy has revealed…

Appraisers and others,

I have previously reported about a Seattle area AMC, who I and others believe, is just about to ‘officially fail.’ This AMC claims to be registered in many states, places orders ‘nationwide,’ and uses both “Staff” (1099) appraisers in the metro areas, and independent vendor appraisers (also 1099) in other areas.

I am purposely not reporting the AMC’s name. Even though it’s a terrible situation for many appraisers, the AMC deserves some courtesy as they attempt to stay afloat. They have taken steps to do so. But with no expectation from observers with first-hand experience they actually will survive.

We appraisers normally don’t have an opportunity to witness first hand probable failures like this. In this situation, I am privy to information from a source I can’t reveal.

The autopsy has revealed:

  1. Placement of many assignments to select few appraisers, who treat the AMC as their primary client, and have not broadened their client base (the AMC does not restrict the appraiser from accepting other client assignments)
  2. Slow pay to those appraisers for assignments completed – despite requirements in various state AMC licensing laws to pay within a certain time frame
  3. Failure of those appraisers to monitor the slow pay situation, who blindly and gleefully continue to accept (and do) new assignments
  4. NSF checks issued to appraisers for appraisal assignments – not necessarily regularly, but possibly on several occasions over time
  5. Poor bookkeeping and accounting processes at the AMC
  6. Clients of AMC continue to place appraisal assignments with the AMC, despite being aware of the probable shut down of the AMC
  7. Removal of key important administrative personnel from the AMC. Shifting burden of operating responsibility to fewer people – including one or more ‘owners’ who may not have a full grasp on daily procedures
  8. When a demand is made by an appraiser to obtain payment ‘or else’, a NSF check is issued to the appraiser
  9. Key personnel in the AMC siphon off business income for their own purposes, before paying appraisers
  10. Tens of thousands of dollars are owed to multiple appraisers

I have harped on this before. Appraisers have to learn to be better business people. Pay very close attention to what is owed you for prior assignments. Take action quickly if any are past-due.

Don’t be the “Mr. Nice Guy”. Because in the long run, you will get the royal shaft from people who really don’t give one whit about you.

By the way, for the wordsmiths among you, I do know ‘when’ an autopsy is typically done. I used this term to capture your eyes! The AMC is not yet dead.

Dave Towne
Dave Towne

Dave Towne

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

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16 Responses

  1. Avatar Caterina Platt says:

    Thank you, Dave!!

  2. Avatar Diana N. says:

    Thanks Dave, let’s not forget how many appraisers across the country got screwed by ES when they closed their doors, myself included to the tune of $5k. And let’s not also forget who their prime client was, spelled CHASE.

  3. Avatar bill johnson says:

    The difficulty of monitoring slow pay as an appraiser is that unfortunately we are the ones who issue credit to our clients. If the client has a long term history of paying in 30 to 45 days, then the issue is only known after thousands of dollars are owed. As it relates to the big client residential lenders, long gone are the days where I can demand payment upfront.

    • Too true re up front fees (except odd ball properties). Factoring accounts receivables MAY be a solution. I don’t sign on with anyone that offers payment over 30 days. OK, sometimes even then THEIR method of counting the ‘start date; varies. Many will say it does not start until “acceptance” of the final report after any and all corrections are made. I NEVER accept those terms. Payment is due on submission of the report. They are not allowed to hold my fee hostage!

      Just a thought; better to have four separate $1,500 a month AMC clients, than to have one $6,000 a month client…unless you can afford to take a $6,000 hit.

  4. bubba jay / Retired Appraiser II bubba jay / Retired Appraiser II says:

    more than likely, this is a sign of that catastrophic “snowball” appraisers have predicted for many years that would start rolling downhill.

    fewer and fewer appraisers, fewer appraisers accepting AMC work, AMC’s antics finally starting to bite them in the asp, its all coming full circle. its only going to get worse, and its just the beginning.

    the implosion continues . . . . .

  5. Dave, in view of the specific comments being made I understand why the name is not divulged. I respect that.

    Absent all the itemized specific issues though, if just ONE issue affected me, I would shout their names from the rooftops!

    That issue is non payment in a timely manner.

    The borrower pays the AMC up front. The AMC HAS MY FEE FROM DAY ONE! If they do not have it on the date I complete the assignment, it is because they used MY MONEY for some other purpose. If they are too incompetent to operate a general ledger, then open a second checking account and make the fee deposits for the appraisers the same day they are received.

    Being a bad businessman is not an excuse for not paying me for work I do for you. Period. In all my relationships with past partners, employers, clients and other appraisers I have had ONE OVER RIDING rule: “Do NOT ‘mess’ with the money!” I actually use a slightly different word that conveys a much more forceful meaning. I make NO EXCEPTIONS to this rule for anybody. (Though I have knowingly up front worked for free when I felt circumstances warranted it).

    I use MY  fee money to pay my mortgage; and to buy gas for my car so I can go on assignments. I use it to feed my family and pay my utilities. If some ‘executive’ at an AMC thinks I am going to subordinate the needs of my family to their bad business practices, they are sadly mistaken. The LEAST they could expect would be for me to plaster their name allover the internet; file complaints with CFPB; FFIEC and anyone else I could think of, plus their state authorities. Not just the name of the company, but also the people I spoke with there.

    Having said that, hindsight is 20/20. Dave’s advice is well founded.

    1. IF you work for an AMC, the VERY FIRST time they do not pay as advertised, cut them off until they do pay. Let the circumstances of that payment dictate whether you do future work for them.

    2. NEVER build up more of a ‘bank’ or accounts receivable with one lender or AMC than you can afford to walk away from. New AMC clients should probably be from one to no  more than three assignments AND LET THEM KNOW! “Once we are used to working with each other and satisfied with each other’s performance, I’d be willing to accept more assignments but until we have some mutual history the most I can have outstanding is three assignments.” IF they are legit they will accept that with no hard feelings.

    3. For established clients its tougher. You don’t want to lose work, but neither do you want to leave yourself over exposed. I would not let more than $2,500 remain unpaid a any one time. Even then I’d be REAL sensitive to changes in payment practices. Especially when they say they have switched to a new accounting system or AP firm and that causes a late payment. When their payment pattern changes (takes longer) do not be afraid to cut them off!

    4. Consider using one of the “no charge back” Factor Services. Some advertise that they only charge 5% and never charge the appraiser back if the client does not pay. (Read the fine print!). Personally I’d give up 5% to get paid in less than 30 days.

    Right now I am being told that a company called “Valuation Partners” is paying appraisers in New York very late (over 60 days-120+-). I only have anecdotal evidence form three appraisers, and obviously have only heard one side of the story but it looks like something we (AGA) may become involved with.

    If any other appraisers have experience (good OR bad) with this firm, please let us all know. If these are isolated instances or legitimate service disputes we don’t want to be unfair to the AMC. If they are NOT disputed debts, then we want our fellow appraisers paid…NOW!

    Appraisers need to learn to stop being doormats. Theft of service is still theft!

    If YOU are having the kind of payment trouble outlined in any of the above, you really need to join with us at AGA. While we can’t promise payment results, our experience has been that a letter or phone call is usually enough to generate payment. We are NOT a collection agent, but most AMCs we’ve contacted have preferred to pay their appraisers than to take on a Guild within the nations oldest union over something they know they are obligated to pay anyway.

    Contact Jan Bellas at (301) 220-4100 or write to Jan at

  6. Avatar Diana N. says:

    Mike, right on the money as always.

  7. Avatar Diana N. says:

    I never speak with forked tongue. LOL

  8. Baggins Baggins says:

    XML focused underwriting is the new nightmare.  Absolutely compromising appraiser independence and creating multiple rounds of illogical revision requests, to comply with XML warnings, regardless if they’re hard stops or not.  Dealing with XML focused underwriters makes amc’s look like bff’s whom I will miss in the end.  I’ve never been so infuriated with any client, like I have been recently, dealing with XML focused underwriting.  You can never do it right the first time.  XML focused underwriting = $550 fee minimums.  If I have to put up with something unpleasant, so do they, and the fees go up whenever I experience repeat and predictable stipulation demands for pointless considerations.   Underwriter demanded I include an additional comp from outside of my defined market area.  I do that to close this nightmare order out.  Underwriter issues a second stip that because I have used another active, yet my MC only has 1 active, that I expand the comparative area definition to solve this data anomaly.  Complete violation of appraiser independence.  This is the new normal for appraisers.  Dealing with absolute morons who don’t even bother to read the appraisal reports they’re reviewing.  Scrap the UCDP system immediately, it’s a complete disaster.  Amc’s could never have damaged the industry the way this XML focused underwriting approach will damage it.  Wait and see, because AIR is dead meat, if dealing with XML focused underwriting.

  9. Retired Appraiser Retired Appraiser says:

    Stick a fork in it (the BIG TOE).  The ONLY good AMC is the decaying carcass of an AMC.

  10. Baggins-again, you are right on the money.

    We have ALL (as far as I can tell) provided that extra comp once or twice in our careers just to shut these anonymous UWs up; but to do so now is an invitation to a state board complaint; unless you did it via an addendum rather than a reprint of the original appraisal (which is how MOST appraisers do these things).

    THAT (latter means) results in two appraisals being out there for the same property with two different sets of data (though the value may not have changed at all). I have SEEN state regulators come down on the appraiser for this already! How many disclose the “prior” appraisal done a few hour earlier? Redefining the competitive market area renders one of the two reports “misleading”. A ‘misleading’ report is automatically a violation of Ethics Rule. Anyway, you can see where I am going with this. Appraisers ‘attempts to do the right thing’ and ends up being sanctioned over technicalities CREATED by their compliance with what should have been prohibited influences in the first place!

    REFUSE to make non value related changes EXCEPT via separately dated but attached addendum that is made an integral part of the ORIGINAL appraisal; retaining the original report’s data intact.

    OR; Make sure you (1) disclose the “prior” appraisal even though performed hours or minutes earlier; and (2) Explain WHY the new version is being prepared up to and including comments that “The additional information was demanded by the underwriters according to the client AMC.”

    I absolutely applaud your $550 minimum fee! (I have proposed $515 for licensees and $585 for certified appraisers, and $550 is certainly close enough to be “Reasonable”. Kudos!!!

    • bubba jay / Retired Appraiser II bubba jay / Retired Appraiser II says:

      i would also like to add this Mike – DONT make unnecessary changes and stand your ground when you need to.

      last year i finished a report for a bank. very small town surrounded by other very small towns. i put in the report the three best comps i could find. later i got a revision request asking for two more sales. of course, i already had the best comps i could find in the report, so any additional comps i put in the report were only going to get worse. i added two more as requested, but cringed the entire time and knew they were junk.

      about nine months (?) later, i got that certified letter in the mail we all dread, scrutinizing my report . (not from the state). the letter basically gave me a very hard time for using junk comps like those last two in my report. i HAD IN THE REPORT an addendum page that copied the revision request word for word, and explained why i added those comps later. didnt matter one bit, and i still had to explain my life away as to why i had those two crappy comps in MY report. “i was told to and complied” seemed to work, because i never heard from anyone ever again about that, but it was still a scary PITA for awhile. (knock on wood).

      how many appraisers still comply to this day with every little request? i am guessing a lot, mostly in fear of getting turned into the state if they dont.

      damned if you do, and damned if you dont in our world, right?

      its simply absurd that it has to be this way.

      the bleeding continues . . . . .

      • Baggins jr jr Baggins jr jr says:

        And that’s why lenders insist on the appraiser signing the AIR note.  LOL!  Wonders never cease in this industry, and you can’t make these things up.  Mike, I’m $450 minimum with friendly, and $550 minimum for those whom hassle me.  LOL, close, but no cigar just yet.  It’s a temporary fleeting deal though, amc’s already tested the water to try and drive these fees back down.  How does C & R work again?  Oh yeah, whatever yesterdays lowest fee from the group was, ignore the rest.  Take special care to ignore the permanent movement with lender direct orders, carrying at $450 now. Just pay no mind to that, because if you can trick an appraiser to setting the market fee lower, why not do so? As soon as the market strength dwindles, the amc’s will be back at their old discount tricks.  Most of them were unable to successfully renegotiate with lenders, despite the C&R in CO clearly having moved upward at least a hundred dollars, if not two hundred or more, depending on the appraiser whom you would inquire with.  Imagine the business model with fees like that, absent of an amc.  Lenders would sit waiting for a 350 appraiser, and none of the appraisers would take it.  The lender would have to fold.  Instead though under the current national amc model, the amc’s simply cover the spread difference by repressing another appraisers fee elsewhere in the country.  Hows that for substitutability in relation to going market fees.  Now with the illustrious bonus aspect where if some random appraiser, far far away from you gets a good fee, someone else pays for it.  Like that movie where if you press the button you get a million dollars, but a random person somewhere else dies because you pressed the button.  That’s a day in the life with amc distribution.  The solutions are so simply, nobody dares revisit the junk fee rules in relationship to amc operations these days.  It’s right there in front of everyone, but nobody dares looks.  Distinctly separate services deserve distinctly separate fees. All variables with earnings achieved through amc fee bidding, which fall in the amc’s favor (absent of cost plus of course), are in the end, direct evidence of junk fees being applied. There must be a million junk fee rule violations already, and nobody lifts a finger. I’ve lost all faith in the regulatory power of this industry, and I appraise with defensive measures in mind first and foremost. Permanent customer retention is a long distant memory. It’s musical chairs these days.

      • Mike Ford Mike Ford says:

        100% correct! My standard response is “I have already used the three MOST RELEVANT comparable sales. Anything else would necessarily be LESS RELEVANT and is therefore unwarranted. In the old days Id charge $100 more for each additional comparable which usually dissuaded them. Once AMCs got prolific, that ability went by the wayside, but I still refused UNLESS I agreed that I had missed something or possibly failed to adequately explain myself. More often than not they got an addendum outlining the request and explaining why it was not getting complied with.

        When my old partner (a super gentleman and salesman) & I had our business together, I made a rule that I was not allowed to answer the phones anymore and that the proper procedure was to have someone else tell me about the asinine ‘lender’ requests or ‘conditions’. Even our ‘host’ organization modified the receptionists duties to screen calls for me.

        That way I only “told the walls” where they could go; how to get there, and what to do to themselves once they arrived; and specifically how to perform those various and sundry acts of anatomical impossibilities. How or where they’d find a rolling doughnut to complete the performance was their problem, not mine.

        For the most part it worked until I forgot and  answered the phone before 3rd morning cup of coffee. I’m MUCH better now. Only takes ONE 20 oz cup of coffee now days.

  11. Mike Ford Mike Ford says:

    Baggins Jr Jr

    You are right concerning concerted efforts to suppress fees. Just read up on REVAA and the Louisiana C&R settlement. At least La and Virginia TRIED. In Virginia’s case it looks like the State AG or elected officials caved.

    The problem is this. Only 33 states have passed any kind of AMC regulations to begin with. Of those, not all have adopted any enforcement provisions for Dodd Frank compliance.

    My own state (CA) DOES have AMC regulation; and even some degree of enforcement efforts if they feel undue pressure has been exerted, BUT they have virtually NO INTEREST in C&R fees. None. The official website merely refers inquiries to the CFPB for C&R enforcement. The lack of uniformity is why the attorneys that won the huge tens of millions settlement with B of A on LandSafe were less than enthusiastic about a national class action suit.

    Unless you can show you are an employee rather than an independent IC, your recourse varies from state to state. Now if you CAN show that all the AMC / Lender specific requirements of how and when to do your job DOES make you an employee versus an IC, then maybe you’d have a case.

    Right now it looks like New York may be the next most prominent C&R violation state. We along with the NY AGA rep. are researching state AMC regs now. Who knows where it will go? New York COULD be different. Their AGs LIKE taking this kind of stuff on for their own political purposes.

    After all, it was former AG Cuomo that brought us HVCC in the first place.




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Autopsy of a Failing AMC

by Dave Towne time to read: 2 min