What Can You Do When AMC Does Not Pay?
What happens when an AMC does not pay or closes its doors & should funds collected for appraisals be kept in escrow?
54.1-2021.1 of the Code of Virginia requires AMCs to post a $100,000 bond or letter of credit. Appraisers may be able to file a claim against the bond or letter of credit and receive funds if they have not been paid.
Directly from the statute:
Ҥ 54.1-2021.1. Appraisal management companies; license required; posting of bond or letter of credit.
- In addition to the filing fee, each applicant for licensure shall post either a bond or a letter of credit as follows:
- Appraisers may be able to file a claim against the bond or letter of credit and receive funds if they have not been paid.If a bond is posted, the bond shall (i) be in the amount of $100,000 or any other amount as set by regulation of the Board, (ii) be in a form prescribed by regulation of the Board, and (iii) accrue to the Commonwealth for the benefit of (a) a claimant against the licensee to secure the faithful performance of the licensee’s obligations under this chapter or (b) an appraiser who has performed an appraisal for the licensee for which the appraiser has not been paid. The aggregate liability of the surety shall not exceed the principal sum of the bond. A party having a claim against the licensee may bring suit directly on the surety bond. When a claimant or an appraiser is awarded a final judgment in a court of competent jurisdiction against a licensee of this section for the licensee’s failure to faithfully perform its obligations under this chapter or failure to pay an appraiser who performed an appraisal, the claimant or the appraiser may file a claim with the Board for a directive ordering payment from the bond issuer of the amount of the judgment, court costs and reasonable attorney fees as awarded by the court. Such claim shall be filed with the Board no later than 12 months after the judgment becomes final. Upon receipt of the claim against the licensee, the Board may cause its own investigation to be conducted. The amount of the bond shall be restored by the licensee to the full amount required within 15 days after the payment of any claim on the bond. If the licensee fails to restore the full amount of the bond, the Board shall immediately revoke the license of the licensee whose conduct resulted in payment from the bond.
- If a letter of credit is posted, the letter of credit shall (i) be in the amount of $100,000 or any other amount as set by regulation of the Board, (ii) be irrevocable and in a form approved by the Board, payable to the Department of Professional Occupational Regulation, and (iii) be for the use and the benefit of (a) a claimant against the licensee to secure the faithful performance of the licensee’s obligations under this chapter or (b) an appraiser who has performed an appraisal for the licensee for which the appraiser has not been paid. The aggregate liability on the letter of credit shall not exceed the principal sum of the letter of credit. When a claimant or an appraiser is awarded a final judgment in a court of competent jurisdiction against a licensee of this section for the licensee’s failure to faithfully perform its obligations under this chapter or failure to pay an appraiser who performed an appraisal, the claimant or the appraiser may file a claim with the Board for a directive ordering payment from the issuer of the letter of credit of the amount of the judgment, court costs and reasonable attorney fees as awarded by the court. Such claim shall be filed with the Board no later than 12 months after the judgment becomes final. Upon receipt of the claim against the licensee, the Board may cause its own investigation to be conducted. Upon a draw against a letter of credit, the licensee shall provide a new letter of credit in the amount required by this subdivision within 15 days after payment of any claim on the letter of credit. If the licensee fails to restore the full amount of the letter of credit, the Board shall immediately revoke the license of the licensee whose conduct resulted in payment from the bond.”
Something to think about: Should funds collected from the consumer for appraisals by the lender or amc be held in a non-interest bearing escrow account? Would this eliminate appraisal funds from being used for other purposes? Where are the auditors on this?
Is another bailout in the works?
According to the FHFA, Fannie and Freddie both have failed the required stress test in Dodd-Frank again. The FHFA published an 8 page report on the $99.6 billion bailout they would need. This figure is 20% less than the 125 billion it needed last year, so there is some improvement, but what about those Property Inspection Waivers, and ignoring student loan debt? Those programs have not been in place long enough for any real reaction to have occurred. Lets wait and see what happens next year when Fannie and Freddie are tested again.
What would happen if Fannie and Freddie needed a bailout and did not receive it? Would a truly free enterprise system develop with private investors back in control?
57% of Americans Said Home Prices are Overvalued and Unsustainable
According to an article in HousingWire, a recent survey by ValueInsured concludes todays buyers are cautious and believe they must “time the market right” not to over pay at the peak of the market like many did a decade ago. See the very interesting article here.
Zillow opens Third Market for Instant Offers:
Mortgage Shots has an interesting analysis on what is happening. Agents and Brokers, you better be paying attention and take action.
See the 5 minute video below:
- VaCAP Supports Shane Lanham’s Legal Fight - September 10, 2024
- It’s Just Responsible Journalism! - February 21, 2024
- Limitations for Damages Against Appraisers - January 9, 2024
Simple Solution……Like the good old days………..COD!
There might be an informational disconnect for most. Today from drudge, on the fed.
“Inflation remains below target levels.” You know that old mantra; a dollar saved today is worth more than a dollar tomorrow?
https://blogs.wsj.com/moneybeat/2017/08/14/skepticism-mounts-again-about-the-next-fed-rate-hike/
Oh boy, for the video, instant offers, flat rate realty, one button mortgage, none of this is aligned with the system of checks and balances. These major companies are trying to reframe agency and expectations of consumers, as if we don’t need or want checks and balances, as if we’d all willingly trade away representative agency to save a point. Dang, just thinking of going into realty, already obviated by data brokers, go figure.
Hey! The regular link was better, who wants to see that lady in a blow up picture? Save us!
Unfortunately suing the lender the appraisal was prepared for doesn’t work We tried suing JP Morgan Chase when ES went belly up and lost, apparently the lenders have a lot of pull in court. 🙁 🙁