Category: AMC

Appraisal news for real estate appraisers and real estate professionals regarding Appraisal Management Companies (AMC) and how they affect the Appraisal Industry.

The Great Debate on Appraisal Fees 31

The Great Debate on Appraisal Fees

She included several different fee split examples indicating AMCs retained as much as 70 percent of the total appraisal fee paid by the borrower, which prompted her to stop working with AMCs because of the lack of transparency.  The appraisal industry is abuzz with a discussion about appraisal fees. The Consumer Financial Protection Bureau (CFPB) recently issued a Request for Information Regarding Fees Imposed in Residential Mortgage Transactions [Docket No. CFPB-2024-0021] in which it solicited feedback from the public and industry stakeholders on the fees charged to consumers by mortgage providers and related settlement services. The CFPB framed it as...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisal Organizations / Appraisers News

Appraisal Regulation Compliance Council Exposes Disturbing AMC Violations 95

Appraisal Regulation Compliance Council Exposes Disturbing AMC Violations

The Appraisal Regulation Compliance Council published a detailed breakdown to the CFPB, which showed the median average AMC fee being charged to borrowers amounted to a staggering 65% of the total appraisal fee, with one AMC extracting as much as 84% in pure profit. The Appraisal Regulation Compliance Council (ARCC) is a crucial non-profit organization that specializes in providing fact-based research and expertise on the complex web of appraisal regulations and compliance issues. Driven by a non-partisan mission, ARCC has spent the last two years diligently collecting, vetting, and organizing comprehensive data on lender appraisals conducted by Appraisal Management Companies...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / CFPB

Fight Unfair AMC Practices - Leverage State Authorities 30

Fight Unfair AMC Practices – Leverage State Authorities

Alarmed by predatory practices among AMCs, a peer has drafted letters urging appraisers to call on state authorities to address unfair AMC conduct and potential regulatory violations.  As appraisers, we have faced an ongoing challenge with Appraisal Management Companies (AMCs) offering fees that are well below the customary and reasonable rates for standard appraisal assignments. This practice has created a troubling trend of “bid wars” where AMCs pit appraisers against one another, driving down fees to unacceptably low levels. In response to this issue, a peer has provided two draft letters that can be easily modified and used by other...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / Customary & Reasonable Fees

Insights from CFPB's Public Comment Period 53

Insights from CFPB’s Public Comment Period

The comment period on the Consumer Financial Protection Bureau’s (CFPB) “Request for Information Regarding Fees Imposed in Residential Mortgage Transactions” concluded on August 2, 2024, with a total of 959 comments received. Upon reviewing some of these submissions, several noteworthy perspectives emerged regarding appraisal fees and the role of Appraisal Management Companies (AMCs). The National Association of REALTORS® (NAR) highlighted the lack of transparency surrounding AMC fees, which are often bundled together with the actual appraisal fee on the Closing Disclosure (CD). This opaque structure prevents consumers from understanding the true cost of the appraisal service and hinders their ability...

ACOW / AMC / American Society of Appraisers / American Society of Farm Managers and Rural Appraisers / Appraisal / Appraisal Institute

Lack of Fee Transparency: Exposing the AMC Exploitation 71

Lack of Fee Transparency: Exposing the AMC Exploitation

By keeping the borrower in the dark about the true cost of the appraisal, the AMCs are able to charge exorbitant prices and pocket the difference (as shown in Figures 1 through 10), exploiting the consumer’s lack of knowledge.  Thank you for the opportunity to comment on the Consumer Financial Protection Bureau’s Request for Information on Fees Imposed in Residential Mortgage Transactions. The growth of Appraisal Management Companies (AMCs) in the wake of the 2008 financial crisis was driven by a well-intentioned but ultimately misguided belief that they could help “ensure the integrity and independence” of property valuations. The reasoning...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / CFPB

Uncovering Flaws in FHA Appraisal & Loan Review Process 27

Uncovering Flaws in FHA Appraisal & Loan Review Process

The story of this single mother’s harrowing experience with a defective home purchase and HUD’s negligent oversight exposes deep flaws in the FHA appraisal and loan review process. After sacrificing for years to rebuild her credit and earn the right to become a homeowner, this borrower found her dream home in the country – or so she thought. During the home inspection, several issues were flagged. The seller, an investor who had purchased the home in an estate sale, was unaware of the septic system’s location. The seller agreed to have the tanks pumped so the location could be determined....

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / CFPB

Gov't-Indulged Middlemen Are Wrong RX for Battered Borrowers, The Infirm 14

Gov’t-Indulged Middlemen Are Wrong RX for Battered Borrowers, The Infirm

The U.S. government impoverishes homebuyers as it does the chronically ill – by promoting the use of middlemen who prey upon them. A cadre of such middlemen was created decades ago as a firewall between Big Pharma, the insurance companies and the pharmacy chains. Called “pharmacy benefit managers,” they were to negotiate drug prices, streamline distribution and manage lists of prescription drugs covered by insurance plans. But since the government has gone whole-hog into health care under the Affordable Care Act and into drug-price controls under the Inflation Reduction Act, things have gotten crazy at the slop trough. Today, according...

AMC / Appraisal / Appraisal Institute / Appraisal Management Companies / Appraisal News / Appraisal Organizations

Exposing Predatory AMCs 49

Exposing Predatory AMCs

Exposing the inner workings of these predatory AMCs and their corrosive influence on the housing market.  Cindy Chance’s recent comments about the concerning practices of some appraisal management companies (AMCs) have struck a chord with many in the real estate valuation industry. Chance is shedding light on the troubling ways in which certain AMCs have come to wield significant power and influence over the appraisal process, often to the detriment of both appraisers and the public. The growth of AMCs in the wake of the 2008 financial crisis was driven by the misguided belief that they could help “ensure the...

AI / AMC / Appraisal / Appraisal Institute / Appraisal Management Companies / Appraisal News

CFPB | Bureau Crackdown: Unfair Practices Hurting Consumers 23

CFPB Crackdown: Unfair Practices Hurting Consumers

Bureau is currently investigating various fees associated with obtaining a loan, with the goal of identifying any that may be particularly burdensome or concerning for borrowers. As we all know many AMCs are not paying Customary & Reasonable fee as required by TILA. They have consistently pushed down the pay of Appraisers while making undisclosed profit off consumers and prioritizing cheapest and fastest over quality and competency. The CFPB has been in communication with individuals behind the scenes and are concerned with what has been shown enough to include AMCs in their data collection process. Now is the time to...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / CFPB

Unresolved Complaints Filed with HUD 47

Unresolved Complaints Filed with HUD

The “unresolved complaints” may not be as clear-cut cases of discrimination as they are being portrayed. The lack of resolution in the fair housing complaints filed with HUD regarding alleged appraisal discrimination has become a pressing concern for all parties involved. As highlighted by Peter Christensen, HUD has received over 200 such complaints since 2020, yet has failed to make a determination on the merits of any of them, either way. This suggests that the complaints are not as straightforward as they may initially appear, and that there are significant challenges in distinguishing legitimate grievances from those driven by other...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / HUD

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