Bye Bye AMC: A Script to Sideline Appraisal Middlemen
In the high-stakes arena of real estate appraisals, where precision tangoes with red tape, a sharp SQL script named “Bye Bye AMC” is poised to shake up the status quo. Crafted by Chase Pursley, founder of Appraisal Inbox, this code isn’t just a string of queries — it’s a potential death knell for Appraisal Management Companies (AMCs) that have long profited by squeezing appraisers, meddling in valuations, and padding their pockets at the expense of consumers. Let’s dive into why this script could change the game.
Appraisal Management Companies emerged post-2008 financial crisis, promising to keep lenders and appraisers at arm’s length to ensure unbiased valuations. Noble in theory, but in practice? Many AMCs have become the appraisal world’s equivalent of a tollbooth on a one-lane road. They’ve been accused of slashing appraiser fees to bare minimums, pressuring appraisers to rush or skew reports, and skimming hefty cuts from consumer-paid fees — sometimes pocketing up to 84% without adding clear value. All this happens behind a curtain of opacity, leaving borrowers and appraisers alike frustrated. Enter Chase Pursley, stage left, with a solution that’s as elegant as it is disruptive.
“Bye Bye AMC”: The Code That Could Change Everything
Pursley’s “Bye Bye AMC” SQL code is a masterclass in precision and fairness, designed to match appraisers to appraisal jobs without the AMC middleman. Picture it as a digital matchmaker for real estate valuations, but instead of swiping right, it uses geospatial calculations, workload analysis, and round-robin logic to pair properties with the best-suited appraisers. Here’s the magic in a nutshell:
- Smart Selection: The code evaluates appraisers based on certifications, proximity to the property (using geospatial data — White House coordinates, anyone?), and relevant experience with similar properties. It even calculates travel time and local expertise within a 5-mile radius.
- Fairness First: A balanced scoring system weighs workload (35%), availability (20%), local experience (25%), property-type expertise (15%), and distance (5%). Then, a round-robin twist prioritizes appraisers who haven’t been assigned recently, ensuring equitable work distribution.
- Transparency and Efficiency: By automating the process, it delivers a ranked list of appraisers — complete with contact info, experience, and scores — ready for direct assignment. No AMC to siphon fees or muddy the waters.
This isn’t just code; it’s a manifesto in SQL, saying, “We don’t need overpaid intermediaries when data can do it better.” The script could empower lenders and mortgage companies that rely on AMCs — often those without dedicated in-house appraisal teams — to bypass them entirely, keeping fees fair and valuations independent. Even for lenders with appraisal teams managing assignments internally, it offers a streamlined, data-driven tool to enhance efficiency.
The AMC Problem Exposed
The Appraisal Regulation Compliance Council (ARCC) has blown the lid off AMC predatory practices, revealing how these firms pocket up to 84% of appraisal fees while appraisers scrape by, undermining the impartiality they’re meant to protect. This fee skimming hits consumers hard, who often pay hundreds of dollars believing the appraisal fee compensates the appraiser for their expertise, unaware that most of it lines AMC pockets. A 2025 class action lawsuit against Rocket Mortgage and AMCs like Clear Capital echoes these concerns, alleging deceptive fee practices that shortchange appraisers and gouge homebuyers. “Bye Bye AMC” sidesteps this quagmire, offering a transparent alternative that could force AMCs to rethink their ways or face obsolescence.
The Bigger Picture: A Future Without AMC Overreach
The implications of “Bye Bye AMC” are seismic. For appraisers, it could mean fairer pay and less pressure to cut corners, as direct assignments eliminate the AMC’s fee-grabbing middleman. For consumers, it promises lower appraisal costs, higher quality appraisals and greater transparency — imagine your $500 appraisal fee going entirely to a skilled appraiser with local expertise who spent hours analyzing your home, rather than AMCs pocketing most of it to pay the cheapest bidder with little regard for quality or market knowledge. For lenders, it’s a streamlined, data-driven way to ensure compliance and quality without the AMC baggage. And for AMCs? Well, they might need to rethink their business model or risk becoming the Blockbuster of real estate.
This code also arrives at a pivotal moment. With ARCC’s findings and ongoing lawsuits spotlighting AMC overreach, Pursley’s solution offers a merit-based path forward. By automating fair, efficient appraiser assignments, “Bye Bye AMC” proves that technology can outsmart profiteering middlemen. If this script gains traction, it could spark a fairer, more transparent appraisal process, leaving AMCs scrambling to justify their tollbooth existence.
For those eager to peek under the hood, click here to see the script on GitHub
- UAD 3.6: The Appraisal Industry’s Shiny New Straightjacket - May 30, 2025
- Bye Bye AMC: A Script to Sideline Appraisal Middlemen - May 15, 2025
- Appraisal Institute’s Harassment, Tests, and Dance with AMCs - May 9, 2025
The AMC model was never about quality or consumer protection. It existed to siphon profits from the professionals doing the real work. This script lays out exactly why they need to be sidelined. Cutting out the middlemen means better fees, faster turn times, and a return to local market expertise. This is the shift appraisers have been waiting for.
Plus lower costs for borrowers for the appraisal. In our current interest rate and inflation environment, the consumer needs every break they can get.
I’ll believe it when I see it!
The end of AMC’s would without doubt rekindle and heal most of the issues we face in the appraisal world. But the proposed criteria of the system needs a major rehaul. The proposed criteria would also be detrimental to the profession by what appears to indicate cherry picking who pays extra for the most letters behind their name and some far too narrow criteria which will be the end of most appraiser careers. For example, a five mile radius. If we work only within five miles, those of us in ‘Suburbia’ and rural areas will be starved out quickly and be in the unemployment line. That will only work for those in large Cities. Big congrats on the idea but I hope they will be open to suggestions and criteria before fully launching things. Please, continue on the path of the idea, but expand and make it fair to all qualified appraisers, not just those in the Appraisal Institute or those who ‘pay yearly’ to random other organizations to buy letters after their names.
It’s just a proof of concept. The query has variables which could be changed based on scope. And if implemented with proper geodata, could be used to query appraisers in a particular zip or even geofencing. Thanks for the feedback!
When you earn an MBA, PHD, and etc. these qualifications travel with you for life without paying a big yearly ransom to keep what you have earned. For many reasons I recently dropped my designation with the AI which I had for 30 years. While is doesn’t matter now because the AI is doomed, the designations should have been life long – non-ransomed qualifications. In hind sight I would have finished my MBA and pursued a PHD in finance or economics or similar – which would have likely opened other career doors. I wasted my time and money with the AI.
Your disagreement with designated appraisers is way off. As an MAI who received my designation in 1990 after 11 years in the field and doing commercial and residential appraisals and reviews now for 45 years, I have paid dues to an organization that has Board of Directors in bed with AMCs, and profiting on our dues to line their own pockets!
Please understand that just a license is not equivalent to a designation from a major appraisal organization. The education and training necessary to perform credible reports is more advanced than for non-çompllex properties. You come off as jealous.
Although I am not supporting the AI now for their corrupt and male dominated organization. I think the educational courses should be moved to college and university so we can earn our Degree rather than be held to high standards and ethics by crooks profiting and double dealing when it comes to secrecy clothed in privacy concerns. Go for quality! Throw out the opportunistic Board!
Deborah, how are the Board of Directors lining their pockets from our dues? What a crazy assertion to lob out here with no evidence to remotely support it!
While I’m no fan of AMCs and have never done any AMC work, I know several Board of Directors and can confirm it’s currently a thankless volunteer effort on their behalf. Yes, there are clearly executive leadership issues that need to be accounted for promptly, and that the board has done their best to uphold accountability as they did a few days ago.
While I’ve not been on the national board and from this recent board experience, have no desire to ever pursue now – I have volunteered extensively at chapter and regional levels, and can assure you that there is no pocket lining going on with the chapter or national board of directors. It’s pure volunteerism to promote our profession, promote us, and promote our colleagues and peers. From my personal experience at the chapter and regional levels, the only pocket lining going on is gaining great friends and peers to offset the lost time and missed income.
While its important to recognize and promptly account for past organization failures and shortcomings, let’s stay positive to promote solutions for our organization, including our current membership and forthcoming AI memberships. The Appraisal Institute will be around long after we are gone and as designated members let’s strive to give back to it, what it has given us. Onward and Upward!
Who’s going to clean up the primordial ooze the amc executives left behind?
There will be no ray of sunshine in this industry until the amc racket is reigned in and brought to heel.
That’s why I left the industry just wasn’t worth making $120 for appraisal’s the amcs were paying. Ya crooks.
Honestly speaking, if AMC’s are a vehicle for various parties and interests to make more money why would this be a solution? I’d imagine something like this could have already been implemented years ago if it was desired.
Marcus Knight many lenders are unaware that AMCs are NOT mandatory (unbelievable I know, but it is true). We need to keep educating. Giving them a better alternative with higher quality and less delays.
And the lenders that do know that AMCs are Not mandatory – most of them, also know that the alternative it is very expensive, to implement a compliant inhouse direct engagement platform and process. From my past management in two direct appraiser engagement platforms, I understand it’s much cheaper for a lender to outsource the appraisal to an AMC where it cost them nothing, versus implementing an appraisal dept and staff that meets required independent-firewall criteria.
That’s the point of my proof of concept. It’s not rocket science nor expensive to implement something like this in house. And it would allow the lender to charge the borrower much less for the appraisal as there’s no AMC stealing half the fee (and it is theft, make no mistake). And no reason to rip off the appraiser with the totally made up “tech fees” that are passed down the line.
About time!!! They are sleazy crooks.
The AMC is nothing but a leetch on the mortgage industry. It provides almost nothing of value.
The VA has had a solution for 16 years. Was it implemented to replace AMCs?
Fast forward to the year: 2035
Appraiser:
“Whatever happened to Chase Pursley?”
Appraisal Nation (Largest AMC in the US):
“He’s on vacation with Jimmy Hoffa”.
Both are wearing cement shoes and a Columbian necktie.
Much harder to give the concrete shoe treatment to something that’s just an open source query/data schema that any lender can use and modify.
Realistically, who is going to actually use it?
Banks with competent IT staff who don’t want to rip off borrowers and nor screw their appraisers.
We like this tech person. He keeps honestly trying to help. I suppose, run through one of the older arguments here. Appraisers talked at length about these issues in the early days of amc’s.
Round robin is the best. Faster one gets the assignment done, faster they get back in line for the next order. Amc’s and tech platforms turn time ratings is what led to systemic training deficiency, excess use of outsourced non licensed service help. Round robin nullifies time based grading, which is why amc’s use time grading and tiered ranking; to keep the constant pressure on the appraiser. Round robin combines with a maximum open order count which is mostly universally applied to all panel appraisers. Volume distribution would be much more consistent and fair.
Proximity assignment preference. Many appraisers prefer to work further away and this is an enriching experience. The concept of expertise by location is fundamentally flawed. When people move to different locations, or become competent in market segments, they take their competency with them where ever they practice.
Appraisers need a fair share of the basic work as a reliable income base in order to be able to have the flex time and flex resources to offer more time consuming challenging coverage. Even if they travel far distances to tap into this, that is preferable to travel, because that type of work is vital and beneficial for all appraisers. Rotating without attention to type or proximity was superior because there was a better order distribution balance. This fostered more comprehensive training opportunities and experience building, more stable income streams.
The consideration of credential and experience should not be baked into software, because that’s an administrative concern of a panel manager. The managers task is to attract and retain highly experienced people, and help provide training to newer panel members whom still made the list. If the manager puts them on panel, appraiser should receive a fair share of assignments. That’s a flat rate fee, standard turn time for everyone, rotating assignment.
Property type expertise. Somewhat of a misnomer. The appraisers expertise lies in the activity of; being currently competent or becoming competent in new places or with new challenges. Doing so using consistent and reliable appraisal developmental methods, to offer an increasingly broad service range. The primary variable is the time it takes the appraiser to complete the request, and time can vary substantially even with similar property types. This is the unpredictable factor, the primary variable. Which is why in a round robin setting, the laws of averages mitigates the impact, to provide more fair assignment volume to all panel appraisers uniformly.
Proximity approaches may help with some efficiency goals, but ultimately result in stagnation of appraisers development and disproportionate working potential which rewards some appraisers and penalizes others in a rather unfair manner. Enter virtual offices. None of it works, too complicated. Round robin is simple, straight forward, balanced, more fair. I’ll drive fifty miles, it does not bother me. I enjoy getting out and seeing new places. It’s one of the primary reasons why I became an appraiser, traveling around as a part of the working position. Many appraisers feel the same way. Before amc’s I would take orders far out, fish on the way home, stop by the hot springs, etc. Shop and eat in different areas, visit far away friends. Made the trip economically viable when otherwise it would not be. The industries preference to stick appraisers into one single location took away a substantial and meaningful benefit we’d like to have back. If I say I cover the area, that’s the end of it. Send me orders in that location. What does the company care if I drive more or not? It’s on my dollar not theirs. If they’d reign in the amc’s, there would be more appraisers and there would not be any shortages of vendors.
Per uspap as long as the appraiser discloses the lack of experience, explains what they’ve done to become competent, in order to provide credible assignment results, that’s meeting minimum standards. How appraisers become better and broaden their skill sets over time. Granting appraisers leeway to become experienced in new market segments. We can practice competently anywhere our skill sets are applicable.
There has to be work in the first place. Unless FHFA rolls back the automation, half of all appraisers whom relied on full service GSE work, soon to be gone. None of the software is going to matter soon. I’m getting a neuralink and am going to ask Mr Pursley to write me a special script, to forget that I was ever an appraiser.
I don’t particularly like to work in the city (closest to me), and love to work in the more rural areas – those which surround my immediate county. I have developed years of expertise in these areas and would hate to loose them for the local city work. I am one who is willing to drive 50+ miles to retain the peace of rural work, but do expect a reasonable fee for a rural area. I agree with Baggins – If I say I am competant in a county, that is what I mean. If I don’t cover it, I say so. I hope this model moves forward. Praying hard, lol.
Five mile radius, huh? I’m sure this will solve everything. Oh, how I miss the days of cocaine-crazed loan officers, working in a cubicle in a five-acre warehouse, screaming at me and threatening my life! Those were the days, huh?
Appraisers complained on rogue mb’s so much during the lead up to the last housing crisis, it sparked nationwide federal investigations, with some substantial penalties. The appraisers presence likely mitigated much of the additional potential damage that was never realized. Appraisers were sold the separation from loan production rule as a means to reign these people in, not for them to end up with more power than ever before. Amc’s, the long arm of predatory lending. If an appraiser makes one person anywhere in the organization upset, they don’t just lose one connection, they lose them all. ‘valuation independence’.
That’s just an example usage of the query (a 5 mile variable). As long as the geodata is implemented correctly, the locational portion could be employed based on a number of criteria.
Never happen; AMC’s are too embedded into the system. Our only hope is that they one by one fold up shop. We have to stop accepting the so called imroved appraisal process using PDC’s that fake as appraisers. I don’t sign anything I don’t personally look at.
Fabulous solution to AMC blight on the appraisal profession. We’ve got ARCC data showing AMCs have siphoned off $12.5 billion dollars of appraisers fees with no added value for their “services”. And now a brilliant solution to this decades long problem! Hooray!!
Why reinvent the wheel when the VA rotation panel is already proven to work. Federally mandate that each state set up a rotation panel and actually manage it and hold participants accountable for their work. The severe lack of regulation enforcement prior to Dodd Frank was a large part of the problem. Eliminate the middle man, Bring back the profession, give us back our business resources and turn times will not be your problem.
I’m not familier with how the VA rotation panel works. Do you know where I can read more about that? Thank you.
No, repeat NO “sql” or any other automated, or human interpreted “script” can ever do the things claimed in the article.
Why is it that no one actually reads FIRREA?
“The” AMC (or anyone else) ordering an assignment is to assure appraisal competency to perform the specific appraisal being ordered.
License level doesn’t ensure competency. Nor does physical proximity (contrary to a recurring meme/myth).
Experience with both the property type involved; & the exact ownership interest that exists determines competency.
Fee (minus impact of unpermitted additions, damage, external influences, CTC [if practical] and HBU, or understanding of Leased Fee with all the associated tenant rights, or owner obligations are huge factors AI or “SQL” can’t quantify or qualify in terms of an appraisers competence.
Licensing was supposed to assure competency.
It hasn’t.
USPAP was supposed to ensure uniformity of standards and principles.
It hasnt.
State enforcement was supposed was to make sure adequate compliance with USPAP is maintained.
It doesn’t.
30 years of Special Interest influence 100% undermined FIRREA, and Dodd Frank.
Political malfeasance & GSE fraud undermined what remained or performance standards.
Now another snake oil salesman has yet another substitute for NECESSARY, trained and we experienced appraiser screening.
I applaud the effort. But snake oil is still snake oil, no matter how carefully crafted, or honorable the intent is.
Eric Kennedy is right.
Though in truth unless banks & other lenders return to the costly practice of running their own appraisal departments, the abuses and performance shortfalls can’t be eliminated.
This may otherwise be interpreted as an essential homework or study requirement.
FIRREA
https://www.congress.gov/bill/101st-congress/house-bill/1278/text
https://www.fdic.gov/publications/financial-institutions-reform-recovery-and-enforcement-act-firrea
https://en.wikipedia.org/wiki/Financial_Institutions_Reform,_Recovery,_and_Enforcement_Act_of_1989
Wow that’s a lot. Will re read again soon. Thank you Mr Ford. FDIC. Taxpayer backing. The laymens term should ring up as a familiar reference most understand. Please advise if these links are not sufficient. Thank you. Research keyword; FIRREA
Okay then, if quantifiable data points like locational, property type, ownership, licensing and the others aren’t enough to qualify a competent appraiser – then what exactly are the “qualified screeners” using for their appraiser selection decision – voodoo? Speaking of snake oil…
And that’s my point, the AMCs aren’t actually providing any service that lenders can’t themselves with some basic database skills. Most of this data is in the public domain and the rest they could track internally with bog-standard SQL combined with a geospatial plugin like PostGIS.
I’ll remain tied to the idea that licensed people with experience, are the best judges of competency, regarding other licensed peoples service, whom have at least loosely related experience. The problem with amc’s is they’re telecom operations, whom expanded into a wide range of lender supportive services. They’re agents of the lenders not partners to the appraiser. They advocate against appraisers best interests or create high pressure situations which result in constant blacklisting and imbalanced assignment patterns, and have done so consistently since the beginning. They are loan production. They are the tech. Mercury and Appraisal Port were among the first platforms to offer one stop technical and storage solutions and that’s really all anyone ever needed even to today. The rest should be considered business expenses of the lender. If they want to use ‘appraisal management companies’ to provide those services, that’s fine, but appraisers should stop having to pay for this. Improperly co mingled appraisal management and appraisal service fees needs to end. Distinctly different services require distinctly different bills.
That’s the argument. The amc’s hijacked workflow upstream, used their position to push appraisal pressure, and redirected twelve billion or more dollars from the appraisal community. Instead that twelve billion, a substantial portion of such went towards infrastructure and technology building of amc’s whom used the leverage to break into far more fields than the appraisal industry. In doing so they then also redirected a substantial volume of work which previously was appraiser specific work, sending that to other third party servicers and realty workers instead. Just all around a completely devastating situation for the vast majority of professionally licensed appraisers around the country.
PAVE was a ruse to finalize the long term goal of a new fully internally controlled system. Anyone with a pulse should have been able to recognize the lack of growth of the appraisal industry lied in the hands of the amc industry and lenders whom use them. They bait and switched everyone with the racist trigger, kept them pre occupied with activism rather than sound business management structures.
I do believe there is an old and popular meme regarding wisest choice for qualified assignment duties. Post this again. Thanks Chase, appreciated. I think what many here may be missing, and please do clarify, as the nature of the software is technical and not necessarily an appraisers specialty; An open source software means ready to go out of the box for lenders and they could simply install a new program with limited overhead and staff to run it, and could bypass the entire convoluted system of what we know as assignment platforms and appraisal management companies.
I can see the merit in such an approach. The counter suggestion is to keep this extra ordinarily simple following traditional assignment patterns pre amc disruption. Round robin, direct assignment, consistent market fees. Have you ever read the IVPI proposal? It sought to follow the VA model and implement that in the other GSE sectors. Why can’t they simply copy the VA model? Give them a new software call it the mlo appraiser connection.
Everything the public is told and all the complicated factors, smoke and mirrors to keep people focused on something other than the core issues. The evolution of all too many of these management systems is simply appraiser pressure and loss of independent positioning all over again. The GSE’s are too big, too consequential, the gate keepers for property value through this entire country, the situation can not be over looked. Their abuse of the system has led us straight into another housing crisis. This time a crisis of affordability and availability, never ending debt traps and unfunded liability.
Avm’s… Who’s actually still buying this that internally controlled black box tech systems are in any way more safe or reliable than simply structuring deals around appraisers reports? Really all that needed to happen for reform years ago was to keep the comp search, but prohibit mortgage lenders from shopping the comp search to hit peak numbers so people could treat their homes like atm’s. That’s all that’s needed, appraisers could be dealing with three week turn times instead of days, there would be far more appraisers over time, and there would be none of these third party outsourced appraisal completion services or talk of non licensed property data collectors.
In a perfect world GSE’s would not offer any cash out and people would have to get second liens for ancillary mortgage products. This is what happens when the government get’s into the business of anything, open doors for abuse are exploited nearly immediately and never end until the plunder reaches disastrous levels or the people say they’ve had enough, get the government out and let the market self correct. GSE’s are so far off their congressionally appointed charters. Self asking regulation once again serves as a liability shield rather than a constraining regulatory control. Twelve billion dollars of investment opportunity and this is the system we end up with? Incompetence and outright criminal abuse of the system. Racketeering. Restraint of trade. Interstate wire fraud. Labor practice violations. Free speech constitutional violations. Judicial and investigative malfeasance. ‘Appraisal modernization’. If all FHFA is doing is checking employees internal working habits and charity donations, they’re still asleep at the wheel to this day.
https://www.workingre.com/wp-content/uploads/2013/08/IVPI-Proposalfinal.pdf
How do they know if an appraiser is competent? Underwriter approval. The underwriter should have the authority to kick or add appraisers from approval lists at will. With a tie in for loan repurchase downstream if that happens, removal as well. Something that is not happening today. The panel managers absolutely must have superior appraisal experience themselves as formerly practicing independent appraisers to make such a quality determination, there is no substitute. Not coincidentally, there are entire organizations, many even sit in the top ten volume producing positions, whom hire non appraisers to be panel managers. It’s a rare organization these days that does hire qualified experienced licensed appraiser staff to complete the task of administrating an appraisal distribution program.
Because if they hired accountable licensed people, they could be held accountable. When they do not hire licensed accountable people, they’re free to pressure blacklist junk fee rake conceal evidence bury information redirect attention and bamboozle appraisers and borrowers alike with impunity. That’s in a nutshell how this works. Purposeful distortion of accountability. ‘Appraisal management.’ The controlling appraiser amc requirement needs to end, never once has a controlling appraiser lost their license, the system does not work. Every single person involved in appraisal distribution and panel management down to the phone workers should all be required to have an appraisers license.
Sorry, there is no technical solution for this particular aspect. Which is why licensing exists. Why avm’s will never work. Why applied artificial intelligence will result in epic failures and unimaginable harm through ways not yet anticipated or expected. It takes a qualified human. There is no substitute.
Respectfully, but strongly disagree. When you say UW, lenders hear Loan Officers. NEITHER should ever have the ability to remove an appraiser. THAT is the number one tool of coercion used against appraisers for decades.
Texas has an interesting way that they handle removals.(& additions). Every single appraiser on the list requires the lender pay TALCB a $25 registry fee. They ALSO have to pay a $25 REMOVAL fee when they dump an appraiser. Youd be surprised how effective it can be in terms of giving an appraiser recourse.
NO APPRAISER SHOULD EVER BE ALLOWED TO BE BLACKLISTED without an SR3 compliant appraisal review and SR4 compliant review appraisal report. NOT EVER!
Same applies to those fraudsters at FNMA misleading state regulators by the vague statement “After Review, we determined (whatever lie they are pushing)”, WITHOUT ever actually doing an SR# compliant appraisal review.
Despite being a GSE engaged in buying, bundling and selling mortgage-backed securities (and lender buybacks) they believe they are categorically exempt from all aspects of FIRREA.
A system reset is needed.
Why doesn’t the AMC just assign the jobs out without collecting the Appraisal fee. Let them collect the Management fee for their services and let the appraisers collect our fee’s at the door like old times. This way there is a barrier between us
Because it’s far easier to hide their overblown fee by marking up appraisals 100% and calling it the appraisal fee on the settlement statement. The amount of their extortion fee also depends on the success of each reverse auction (aka the assignment process) so they never have a set fee. Sometimes they can mark up the appraisal fee 100%, other times they may mark it up 200%. The more sucker/bidders they have the more profit they can generate.
Sadly, too true.
You need help Chase? I’m on board. I did Java programming, I’m pretty good with computers, I learn fast. I’ll help for free. Let’s do this!!
I remember AMCs taking approx. 30-40% of the appraisal fee. I was not a part of that bc I was employed as a corporate review appraiser. Then Dodd Frank Act came out, making the AMCs pay “reasonable fees”. However, the AMCs continued to abuse the system. I suggest raising the AMCs license fees and systematically the AMC numbers will decrease :)!
Then ONLY the big AMCs will remain. THEY are the biggest part of the problem to begin with. Read the old articles in Appraisersblogs about Mark Skapinetz battles with Coester VMS, “creator” of the one-size-fits-all all national AMC fee.
Better yet, charge them a steep license fee plus force them to submit 85% of their net fees each month along with the names of appraisers they hired. The state board can then refund fees to the appraisers and keep more money for themselves. Think of state boards as AMC management companies (which was actually part of their job from the beginning). I would much rather pay my state a small kickback for protection than pay half of my fee to a skanky ask shakedown operation. States could also generate far more money than they currently generate from licensing fees.
The real issue is that the current system WITHOUT EXCEPTION is a matter of price fixing in violation o the Sherman Anti Trust Act.
Lenders have already ‘negotiated’ the maximum fee that they will permit their AMC to charge. Long before a specific borrower walks in the door. They have to give the borrower a GFE when the application is taken. Again, before they know who any appraiser will be, and before that appraiser can possibly know any specifics on the property involved, or complexities of issues involved.
Low appraisal fees are a competitive loan issue among lenders. Loan Officers need to be able to cite appraisal costs (contrary to Dodd Frank) when they take an application. They don’t want their borrower saying “your competitor down the street only charges xyz for appraisals,.”
Any solution to this price fixing has to start with a “Cost Plus” AMC fee; and Congress needs to remove appraisal fees from TRID (TILE/RESPA) ‘set in stone’ closing cost estimates.
NO AMC knows how much I will charge for a specific complex assignment. Hell, I don’t know what I am going to charge until I research it and understand all the issues involved.
I just bid $10,000 to $12,000 on “an SFR” last week. Half is because it requires spending days in the county it located in (12 counties away); the remainder because that “SFR” is also an acreage parcel with a historic 150+ year old sfr, various outbuildings and a HBU as a business venture involving emblements. The client didn’t dismiss it out of hand, because so far they hadn’t run into anyone that COULD and WOULD do it. Admittedly, this is an extreme outlier/exception.
MANY jobs are complex by their ownership rights; permits, other uses, unfinished construction, etc.. Jobs for which a predetermined fee of $650 is simply not adequate. Fees that should be in the $1,000 to $1,500 range wind up getting shopped until a desperate, starving appraiser will take for less than the job calls for.
Back east (midwest too), net fees to the appraisers as low as $225 are often found. Quality and credibility aren’t usually elements found in the scope of work for such lowball fees.
Old axiom in the restaurant business. “Never leave a starving man guarding the buffet table.”
Dodd-Frank realized how important this is when they mandated Reasonable and Customary fees for appraisals. Too bad no one other than Louisiana tried to enforce it. A dishonest and wholly corrupt FTC put an end to that!
I choose not to do GSE work, and most AMC work (One or two pay my fees on an exception basis). I urge as many other appraisers as possible to seek other sources of appraisal jobs than GSEs as much as possible.
Until the powers that be in Congress open their eyes to the corruption and rampant lender and GSE fraud, there will be no improvement in the appraiser profession. Just opportunism.
Yep, that’s it. In retrospect the comp search model with direct contact with an appraiser and mortgage broker was far better. There were better ways to stop lending fraud and appraiser pressure than injecting amc’s into the process. All they had to do was prohibit rampant value shopping and stop the abuse of the process where the appraiser with the highest estimate got the deal, and nobody else got any service fees for their time. A rotational panel with value estimates on the front end provided by a human appraiser would be far superior to what we have now.
Because when a borrower came to the MB, the MB would know their appraisers rather well from dedicated long term working relationships and personal conversations. They could better estimate service fees and turn times, readily adapt on the front end before all the other services were paid downstream of the appraisal, if necessary.
Also the mortgage terms would be structured around the general range of estimated value before hand. This would result in better more functional loans, much longer appraisal turn times (think three weeks instead of three days at the very end of the process), and far less pressure placed on appraisers. All of which is better conducive to an appraisers small business needs. We can’t run our businesses around a question mark of how much we’ll get paid or how often we’ll work, which is a key reason amc’s decimated the industry and three out of four appraisers refuse to work with them.
All this ROV nonsense is nothing but institutionalized value pressure brought about by a dysfunctional process where nobody bothers calling the appraiser until the very final tail end when the pressure is on everyone and all other fees are paid. Somehow then the appraisal must fit into place or else; blacklist the appraiser. It was a much more consumer safety orientated process to get value estimates from licensed appraisers rather than avm’s, and to get those up front with a direct and transparent fee quote.
Amc’s created havock with their improperly co mingled fees and combined billing pools which incentivize maximizing profit via fee shopping and subsequent fee skimming junk fee raking. The model of 100% of the consumers appraisers fee going 100% to the appraiser for each individual deal was far better. Nobody was subsidizing anyone elses service costs or making bone head incredibly risky appraiser selection decisions based on fee and turn time. And under that model guess what; Nobody was using outsourced services either, lenders and consumers alike were able to have more confidence and reliance in the appraisal process, and there was far better GLB data privacy compliance. These days a customers data and personal home photos go literally around the world to fill out a two page hybrid appraisal report. It’s pure chaos and totally unsafe. Half the companies providing these third party services come from areas known to have institutionalized data theft and scam rings as an accepted business model in their respective countries. ‘Appraisal modernization’.
Baggs, Traditionally, appraisals are not ordered by loan officers or processors until after ‘subject to’ approval has been granted by the actual lender (as opposed to their correspondent ‘lender’.
This isn’t the BS “pre-approval” letter that the L.O.s type up and issue themselves. It’s the actual funding lender approving the loan three days before the scheduled closing.
As for ROV’s it’s a double edged sword. A necessary one if borrowers are to be treated fairly at all. Appraisers DO make mistakes.
As practiced though, 75% of ROVs are either nitpicking info requests for items already in the appraisal. That in turn is often used as a ‘cover’ or excuse to make value related adjustments “since you have to correct xyz anyway”.
In its worst application ROVs ARE used to illegally pressure appraisers to raise a value. AMCs are purely advocates for lenders. There is no impartiality invovled.
Regarding AMC’s and the damage they have done locally consider the following. The county of San Diego has a population of 3.3 million and yet per the CA Bureau of Real Estate Appraisers there are only two trainees with a start date within the past 12 months.
Screw the AMC’s.
Seek the truth.
I remember the times before 2008 when the appraisers had to go beg realtors and the local banks for work. The realtors would only use appraisers that hit their mark, banks about the same. I would have these pens and cups with our names on them, and give them out liberally. Some local guys would throw big parties for the banks that gave them work. There were appraisers that would hang around real estate offices – and tell the realtors – I can hit that mark. I am glad the AMC model got rid of all that corruption. My partner and I would barely be doing any appraisals, and an older established appraiser down the road had 20-30 he was working on- he would do 2 sales for every refinance. – he just had the banks in his back pocket. Fees? – $225 for a full. We threw a party when we got our first $300 order.
I don’t know, our experience was a little different. Yeah we gladhanded for work but the underlying pressure or preference was easy to identify if present and just as easy to avoid. It’s those aggressive people whom ruined it for the rest of us and broke the model. The part most people whom continually want to correct the system do not understand; There was a valid and effective set of mechanisms to prevent and correct those types of problems. Up the ladder the underwriting department and GSE review process used to cut out the appraisers whom were there just to hit the number. They were dis approved, set on the do not use lists, eventually had to answer to repurchase or state boards, even civil claims.
There was always a continual stream of independent field reviews and if lenders were being honest regarding the process, they’d be required to reign in the aggressive actors. Then additional layers of similar activity of review tracking and scrutiny at the GSE levels with even higher federal level oversight to force them to be honest. Then even higher there were rolling task forces from the highest levels such as the doj and fbi whom would identify then penalize people for any and all forms of financial fraud. These days that’s not happening except for rather extreme circumstances and the industry has adopted this new status quo that the appraiser is to make deals work and pay to play in the amc realm or we’re gone. The moves towards automation have nullified the vast majority of previously implemented and effective safeguards. ‘Modernization’.
That’s the main point; Equally distributed round robin assignment for full service appraisal at consistent fees is the core mechanism to utilize the maximal utility and safeguards the independent appraiser provides. We kept them honest and prevented so much problem before it could materialize or spread. When these companies send disproportionate volume and skim off the top, that activity nullifies the very reason for appraisers to be there in the first place. For the past many years the ‘reperforming loan’ program aka fnma wholesale has swept up all the problems instead of utilizing the systems to identify and cull, cutting the appraisers and management companies out of rotation for being part of producing such disproportionate volumes of faulty over valued and eventually non performing loans.
Neverending red hot printing press and fiat money creation out of thin air also plays a part in masking the problems. When numbers continually fly upward so fast for so long, why should people care about the few percentage points of constant over pricing and over valuation? Everyone that gets paid looks the other way. Then again, the inevitable result many warned about is finally knocking on the door. A housing bubble, affordability crisis, availability crisis. Entire generations locked out. The pollsters now consistently report that general public sentiment for financial outlook continues to erode, that despite higher pricing, most people feel they have less economic potential and more financial instability than ever before. Current status of GSE managers; tap dancing on a bubble, cigar and whiskey in hand.
Post this again I suppose…
I would love to go to a house with my 12 year old car and not have borrowers looking at me like I’m insane because they think I make $1000 for 30 minutes of work. No, Dear Borrower, the appraiser does not get the money you pay, more like someone tries to get someone to do it for 1/3 or so, and the real time is put in at the office, not at your home. This would be so very helpful. Would also love to actually receive an order because I’m the one who should be doing it, not the one with the fastest fingers to press accept. I could do that all day and not be paid a dime. In addition, the AMCs have been using a checklist that just keeps growing and growing and has nothing to do with the appraisal. One lender, one time asked for a photo of the view across the street. Now they want it on every single one no matter the lender, no matter the situation. The AMC, not the lender, not FNMA, not USPAP is the one who insists on current date comparable photos. FNMA and USPAP don’t require them AT ALL. We drive by them, yes, but stopping in the middle of the street to take a photo? Not necessary. The AMC will shop around so long that they need a turn time of 2 days and then get mad when we think that is a rush. Or they will insist is due in 3 business days or less even if the closing is not for 3 weeks or more. Biggest point is that they impose their own random requirements and enforce them as if they are the boss. And then hold our money and gain interest on that for 60 to 90 days even though that is not legal. They know good an well it would cost more for us to try to enforce that than it is worth.
I would be a little concerned with how they are assessing the proper workload as they are not privy to all that I do. Interesting part of the idea presented. That said, not sure I see this gaining traction because they have a lot of money and a LOT of influence. Way more than we do since they have been taking our money for years. Am I the teensiest bit bitter? Yep.
The amc’s don’t assess anything. They use automated process and malleable faux performance grading to mask and conceal the fact they’re violating a myriad of ethical and previously established federal registry guidelines for acceptable appraisal request distribution and management process. That’s due to improperly co mingled fees. By having a grouped pool of all borrowers appraisal service fees in one big pot, then utilizing shopping of fee to fulfill the appraisal development service, the primary priority for the amc is carving out a bigger profit margin. The entire amc model shifted to that of maximizing junk fee billing. Where as previously 100% of the consumers fee for the appraisal went to the appraiser, and there was no grouped funds pool for the appraisal service.
Drive the consumers cost up, drive the vendors charge down. Do not return cost savings to the consumers. The amc industry does not even bother hiding this anymore. Because there is no enforcement for clear as day violations of multiple federal rules. There are appraisers in the back pockets of powerful lending interests as Dave said, and they all work for amc’s as discount volume request full fillers or work at the management level of the appraisal management companies these days.
People looking from the outside in really don’t grasp the scale of the problem. There are amc’s whom prefer to send appraisal requests only to appraisers whom use that same amc company’s ‘appraisal typing services’. Basically this is signature sharing. Just about every appraisal assignment software platform out there has adopted a code and effective structure which integrates automatic features that allows for easy manipulation and alteration of assignment workflow volume based on (you guessed it) fee and turn time alone. There is no limit or effective logical restriction, however many the appraiser accepts, is how ever many the systems continue to send.
Then on the back side the same companies sell appraisers ‘acceptance management software’, which allows appraisers to violate many ethical rules as well for ‘instant acceptance’ of the maximum amount of orders. It’s marketed as a one stop place to manage assignment volume from multiple distributor outlets. In the real world they’re cleverly masking extremely disproportionate assignment volume based not on quality of service, but the appraisers violation of the management rule; providing a thing of value to the client in order to be the preferred appraiser for the appraisal assignment.
Then the appraiser has taken in far more than they can effectively fulfill. Not a problem. Enter the myriad of third party ‘appraisal typing services’, often third fourth or fifth party overseas services, requests farmed out again and again. GLB on consumer privacy and worry about repurchase or consumer harm be damned, each one of those is instant profit for the appraisers whom follow this model. They’re using third world fulfillment overseas quite often. They’re tying the appraisal development service into the same networks of people that the amc’s use for third party overseas discount appraisal management service. Think Ocwen, Corelogic, and the list goes on.
The majority of all amc’s out there are standing by enticing appraisers to use these models. That’s where performance grading comes in. Only the appraisers whom are cutting every available corner for the most minimal possible appraisal fee can climb up and stay on top of the tiered performance ranking ladders amc’s impose. It is how the amc’s sort away ethical appraisers and sort in and entice appraisers willing to play ball, advocate for clients, and provide the greatest thing of value to the amc; Expedient volume fulfillment at the lowest possible price. All the management software platforms code in the peramiters to make this easy and automated. What they do not do is protect consumers or demand compliance with appraiser independence by prohibiting the practice and forcing round robin assignment patterns.
Because in professionally developed appraisal, you can’t flip four or five a day even with a decent staff unless you have a fully functional system of active appraiser apprentices and administrative help under that appraisal firms own roof. We run across a constant stream of challenging orders that can take a week or more per individual order. At best even a simple appraisal request still takes six to eight hours to complete in most practical circumstances, factoring in drive time, etc. The time allotment varies by location and the type of real property at the local level, so variance is constant. But if you’re an appraiser using signature sharing, typing services, third party help, auto acceptance software, comps sharing, and a myriad of other technological sort of cheat the system tools, compartmentalizing every aspect of the appraisal process and diminishing the oversight and credibility of the process to the maximum extent possible, then you can provide a rock bottom discount rate in order to capture the lions share of the amc’s appraisal orders.
Being that lenders are also required to use these automated systems to facilitate compliance with the ‘separation from mortgage loan production rule’, the normalization of disproportionate assignment volume is the new status quo. The VA system serves as the last proof point that round robin distribution provides better protection for consumers, as the independent check and balance system of rotational assignment using full service appraisers does result in more re negotiations and less finalization at avm prescribed value peramiters. That’s one statistic you’ll never get to learn about; The over all closing ratio for the lenders whom are required to follow the VA model for some borrowers, and the even higher closing ratio those same lenders enjoy when using an amc assignment model outside of the VA systems.
Thank you Appraisal Coach Dustin Harris for being the pioneer in this field of how to capitalize applied restriction of trade on the appraisal industry to get truly rich taking everyone elses work availability out from under them, playing a part in destroying far more small businesses than the alternative model ever could build up, and selling the model far and wide. He’s really just an early adapter of what the amc trade groups TAVMA and REVVA both promoted.
Because lenders at the top of the ladder know very well amc’s compete for the lenders business. The amc has to provide ‘better service’ to lenders, if they want to keep their share of the appraisal assignment volume, and subsequent junk fee raking profit. They”ve all maximized the model to compete in this regard. ‘valuation security’, ‘appraisal independence’. Look at any given amc’s website, they pander and solicit to lenders, with various testimonials from commissioned agents they’ve kept satisfied and happy. ‘The appraisal process could not have gone smoother.’ Then take a look at MLS data for initial listed price vs final sold price and observe the remarkable and consistent variance in ratios. Price is not the same thing as value. But according to amc’s, best appraisal service is when price is indeed the same thing as value. Amc’s do not provide separation from loan production. Amc’s are loan production.
The amc’s all copy this language and rule making scope direction for appraiser vendors, then comply selectively except for the base minimum which does not matter anyways, because they’ve already circumvented the very reason for independent appraisers in the first place. That’s why the amc industry canned the previous TAVMA amc trade group lead person and top manager; Jeff Schurman with his cost plus full fee hypothesis white paper. Because that guy actually wanted the amc industry to fulfill it’s intended purpose of expanding appraisal independence and expanding insulation from lender pressure. He signed his own walking papers when he made serious proposals to follow the spirit of the DF Reg Z rule on Customary and Reasonable market rate compensation to appraisers ‘as if no amc is involved’, via a cost plus billing model where the amc charges a distinctly separate fee for a distinctly different service, rather than continue the improperly co mingled amc and appraiser fee structure.
Instead what we have now is an amc system that panders to any and all forms of lender pressure and every appraiser who’s still in the amc system knows exactly how the game is played. With a rare few actual independent appraisers imagining there is some independence or credibility to amc systems, as they occasionally spin in and out of the amc network for complex side and challenging work the amc’s can not otherwise fulfill with their target 24/hr/48/hr, maximum discount play ball number hitter maximum assignment volume preferred top ranked amc appraisers.
So yes, amc’s do pay appraisers market rate fees in some instances, when they have to. Because paying those fees is a protective defensive measure which serves to protect the amc’s market position and existing client set. But the fee is not directly tied to the consumer anymore but rather a part of a group funds pool. When any appraiser wrestles a fair fee out of an amc, the amc in turns applies additional pressure elsewhere to recapture the profit margin. Even appraisers whom get fair fees out of amc’s cause a sort of indirect harm even if they’ve done nothing wrong themselves and only accepted the orders to stay afloat and working for another day.
It’s those same appraisers whom perpetuate the amc model, because if the amc’s could not fulfill all the tough work, they’d lose access to their market share of the majority of easy work. Three out of four appraisers refuse to work with amc’s due to these unethical exploitative processes. They may not always be able to clearly elaborate why, but they understand from basic life experience, this is not how fair or ethical business modeling is supposed to work.
Amc’s have strategized with lenders, they’ve all seen this coming down the line and have co opted appraisal trade groups and other institutions, up to the gse managers in anticipation of installing a new model where the amc no longer even needs to pretend, and instead utilizes fully automated or fully controllable process to capture even more market share with less long term liability exposure. ‘Stake holders interests.’
There is no longer any distinction between amc’s and lenders, as amc’s are legally defined as agents of the lenders. Their true form and purpose now materialized and apparent. The urgent need for all amc’s to be regulated independent of appraisers is also apparent. There is undeniable conflicts of interest and oversight shortcomings with amc’s being regulated merely as appraisal management companies by state appraisal oversight boards, with an amc member on appraisal oversight boards, when the amc’s business reach and coverage extends so far beyond just appraisal management. Also being in a constantly antagonistic and opposing state regarding appraisal ethical rule compliance and appraiser independence guidelines.
Tie the entire picture together. How a long series of steady regulatory changes has compromised the system and nullified the intent of far reaching previously established regulatory guidelines. That’s where the avm final rule, automated valuation modeling subbing out human appraisers, expanded appraisal waivers, a risen lending demins at $400k up from previous $100k levels, so full service appraisal demand and practical consumer protections applied via the traditional appraisal process is a fraction of what it used to be, hybrid appraisals, third party property data collectors, convoluted difficult to understand and use interactive new appraisal forms being developed, and the PAREA alternative pathways to appraiser licensing without real world hands on ethical experience training comes into play.
All work arounds to diminish or eliminate independent checks and balances and effective oversight, aka; requiring independent appraisers presence to prevent fraud and maintain the stability and safety of gse based mortgage origination and access systems for the benefit of the public, aka the gse’s congressional charter mandates. The steady regulatory work arounds are also known as; ‘Appraisal modernization.’ The lenders don’t want amc’s to control just a piece of the pie, they want it all. They’ve made a play for the VA panel before and by a stroke of luck did not capture that market as well. Military service members still get some measure of reasonable consumer protection, if one ignores the fact VA appraisers are already using polluted sales data generated by the other gse systems. The general public; good luck, they’re going to need it.
It’s such a shame because there are many good people in the system in all sectors, but they simply don’t steer these policies or find themselves able to effectively navigate or effect the continual policy alterations. Directing safe and sound ethically compliant process regarding appraisal practice is supposed to be under the purview of appraisal trade groups. Unfortunately as we have recently learned, but always knew was happening anyways, the people in the top chairs are adamantly pro amc in their positioning and business interests.
That or they simply don’t care and would never rock the gravy train, being financially compensated at levels far greater than other bureaucratic positions throughout government. Wrangling the cosmic cobra to the stars and beyond. Who knew that the simple act of overlooking state based administrative procedural rules to generate continued book sales could be so profitable or gain select groups of people such astounding levels of influence on public policy that effects peoples housing and financial positions through the entire country? Sometimes truth is stranger than fiction and we often wonder if they’re resolute secret geniuses, or just got lucky, benefited from dumb luck and inadequate oversight.
They’re coming for all your guys and gals legal and government work next. What happens next is a new status quo as people acclimate and accept a non negotiable mandatory new approach where avm’s become commonly accepted as core lending utilities to fully replace appraisers. The industry long since already accepted the mid way point where avm’s provide target estimates for lending deal structuring and TRID form filling compliance, as the appraiser is no longer used for comp searches or basic acceptable market value range estimates which used to be the most common approach on the front end for lenders to structure deals around.
It won’t be long now until this new process will extend far beyond gse origination. People won’t even question why they’re not using full service human appraisers anymore. For those whom are still in demand somewhere, most likely legal, the value of their service will be diminished by the illusionary belief artificial intelligence is a reasonable substitute because the systems use advanced mathematical principals. People will not understand the concept of data cancer, that the use of automation for gse sectors has already led to manipulated markets and unreliable base data the AI systems are analyzing. AI systems after all, their core utility is; training the model via existing data. And guess who is going to provide the proprietary avm utilities to lenders, eventually reaching to other sectors, using unlicensed property data collectors for the basic property inspection needs…
Seeing how this works yet?
Many senior appraisers when I was newer used to talk about these things. They got together and made a serious effort to implement a system similar to the VA model for Fannie, Freddie, and I think also HUD. It was called the IVPI proposal. It was not perfect, somewhat overly complex, being a proposal referencing major disruption at the time. Still far better than the exploitative amc system that effects the entire country today. They’re only ‘managing appraisals’, where is the actual problem?
https://www.workingre.com/wp-content/uploads/2013/08/IVPI-Proposalfinal.pdf