Fight Unfair AMC Practices – Leverage State Authorities
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 appraisers to put pressure on state authorities to act on the profession’s behalf against these unfair AMC practices.
The letters have been strategically crafted to be broadly applicable, allowing individual appraisers across different states to tailor them to their specific contexts and submit them to the relevant state authorities. This provides a simple yet powerful tool for appraisers to collectively voice their concerns and demand that action be taken. The low fees offered by AMCs are not only harmful to individual appraisers and their livelihoods, but they also undermine the integrity of the entire appraisal industry. When fees are driven down to unreasonable levels, it becomes increasingly difficult for appraisers to maintain the high standards of quality and professionalism that are essential for protecting consumers and ensuring the stability of the real estate market.
By utilizing these draft letters, appraisers can join a unified effort to push back against the AMCs’ exploitative practices. The letters can be revised to name additional AMCs engaged in these problematic behaviors, further strengthening the case for state intervention. This is an opportunity for appraisers to take a stand and fight for fair, customary compensation that reflects the expertise and diligence required to perform high-quality, unbiased property valuations. United in this cause, the appraisal community can leverage these carefully crafted letters to compel state authorities to address this longstanding issue and restore a more equitable, sustainable environment for the profession.
[Your Address]
[Email Address]
[Phone Number]
[Date]
[Your State] Real Estate Appraisers Commission
[Address]
Dear Members of the [Your State] Real Estate Appraisers Commission,
I am writing to formally express my concerns regarding the unfair business practices conducted by several Appraisal Management Companies (AMCs) operating within [Your State]. Specifically, I would like to bring to your attention the troubling actions of Class Valuation, Fast App AMC, and Nationwide Appraisal Network [add name of AMCs]. These companies have consistently engaged in practices that I believe are not only unethical but also harmful to the appraisal profession as a whole.
The issues I would like to highlight include:
- Unreasonably Low Fee Offers: These AMCs consistently offer fees that are significantly below the customary and reasonable rates established by independent studies and industry benchmarks. This practice devalues the profession and pressures appraisers to accept assignments under unfavorable conditions, potentially compromising the quality of appraisals.
- Inconsistent Fee Structures: There is a noticeable lack of transparency and consistency in how these AMCs determine fees. Similar assignments often come with varying fees without clear justification, raising concerns about the fairness and integrity of their fee-setting practices.
- Pressure to Complete Assignments Under Compressed Timelines: These AMCs have been known to impose unrealistic deadlines on appraisers, often without offering adequate compensation for the expedited service. This practice places undue stress on appraisers and increases the likelihood of errors in appraisal reports, which can have significant repercussions for all parties involved.
- Bid Wars and Their Impact on Fair Fees: I have also observed that these AMCs are inciting bid wars among appraisers for standard assignments with no obvious complexities. This practice is designed to maximize the AMCs’ profit margins while denying appraisers fair compensation. These bid war appraisal bids do not establish either customary or reasonable fees and should not be considered as such.
- Disregard for Appraiser Independence: There have been instances where these AMCs have subtly pressured appraisers to meet predetermined values or outcomes, undermining the impartiality and objectivity that are fundamental to our profession.
Recommendations:
To address these critical issues, I respectfully request that the [Your State] Real Estate Appraisers Commission take the following actions:
- Establish Minimum Customary and Reasonable Fees: I strongly recommend that the Commission establish minimum customary and reasonable fees through its own survey of appraisers statewide. These fees should serve as a baseline that AMCs are not permitted to offer below. This survey should be conducted annually to ensure that the fees reflect current market conditions and the evolving costs of doing business.
- Prevent Bid Wars for Standard Assignments: The Commission should implement regulations to prevent AMCs from inciting bid wars among appraisers for standard assignments. These assignments, particularly when they lack complexity, should be offered at the established customary and reasonable fees on a rotational basis to ensure fairness and equity in the distribution of work.
The True Cost of Professional Appraisal Services:
It is important to note that consummate appraisal professionals base their fees on the average time required to complete an assignment, multiplied by an hourly rate that accounts for the cost of doing business. This includes, but is not limited to:
- Appraisal software fees
- Fuel and vehicle expenses
- Professional memberships and associations
- Taxes
- Lockbox key access
- Data memberships and subscriptions
- Adjustment software costs
- Continuing education
- Office supplies and overhead
These expenses are integral to maintaining the high standards and quality of the appraisal profession. When AMCs offer fees that do not reflect these costs, they undermine the financial viability of appraisers and the quality of the services provided to clients.
I believe that by addressing these issues, the [Your State] Real Estate Appraisers Commission can help restore fairness and integrity to the appraisal industry in our state. I am more than willing to provide further details or participate in discussions to support this cause.
Thank you for your attention to this important matter.
Sincerely,
[Your Name]
Since the regulation of Appraisal Management Companies (AMCs) differs across states, appraisers will need to customize the attached draft letter to their District Attorney for each individual state.
- FHFA’s Appraisal Waivers Expansion - October 29, 2024
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- NFHA’s False Narrative Undermines the Appraisal Industry - October 18, 2024
Thanks for the work and let’s pass it around. I hope the surviving State Coalitions are getting very active at present and stirring the pot with State Boards with this issue. What we need is a target in DC to aim all of our spears, this is a federal problem. Maxine Waters and HUD pretend to be working to help their constituents but I’m convinced they have been accepting the REVAA cash flow and talking points. Who in DC is willing to take up this challenge and bring back Truth in Lending ??? We have been drowning in this “business model” for 15 years. Thank you
Does anyone have an update on the CFPB?
The three AMCs referenced in the letter are undoubtedly among the worst in the industry, There is an article on Fastapp AMC providing evidence of the AIR violation. If you are reporting Fastapp include a link to the article.
https://appraisersblogs.com/alleged-violations-of-appraiser-independence-at-fastapp-amc
Nicely done! I would add Solidfi, and Stweart Valuations to that list. Does anyone have a link to each state’s Real Estate Appraisers Commission?
Here is the link for MD
https://www.labor.maryland.gov/license/reahi/
Here is the list of state appraiser regulatory agencies:
https://www.appraisalfoundation.org/imis/TAF/About_Us/Appraiser_Regulatory_System/Regulatory_System_Structure/TAF/State_Regulatory_Agencies.aspx
Thank you!
Done.
Keep providing a list of AMC’s that should be added to this list.
ETA:
Opteon/Apex AMC, Bluebird Valuation, Ascribe/LRes AMC, Bay Equity.
Can you name one single amc that bills for it’s services separately, clearly itemizing this for everyone to see and know? / Name one single amc that consistently pays the VA fee rate for every appraisal they send out? (C&R compliance) / Can you name a single amc whom does not have a conceal the appraisers fee from the consumer provision? I can guarantee you there is not one single amc in the entire industry whom does all three. It is my personal belief that most appraisers in this country can’t find even a single amc whom meets one of those criteria.
There is no point in needing to name the amc’s individually. The entire amc industry is corrupt as the day is long. All they do is pressure appraisers and steal the fees. That’s their job. If appraisers were fortunate enough to run across an honest person working in the amc industry, they most likely came to eventually realize that amc staff turnover has been consistently so high, any relief was fleeting at best.
Let’s move up the ladder to the technical utilities which make the amc model possible; Scope, Mercury, Appraisal Port, Regorra, and so many other proprietary ones whom copy the model by individual amc’s and individual lenders. Although they can be used for good, most are not. The technical utilities have absolutely no safeguards for appraisers. When I’ve pushed back against amc’s at some of these companies, the company heads and managers themselves have blacklisted me out of their entire programs. For asking questions like how many other appraisers was this sent to, how can I avoid all amc communication across the board, how can appraisers have settings they do not bid and only accept direct assignment orders, to please publish median fee lists again which do not include amc service fees, to answer what was the consumer charged. All questions which get an appraiser instantly blacklisted from the very top. I posted a long list of all the unfair anti competitive practices the technical systems impose upon appraisers, maybe save that for another day. But if I write copy this letter above, I’ll be sure to add to it.
This is fun; Set your fees to $1 across the board for everything. No really, try that, insane. Short circuits any assignment company whom has low fee priority set. Your name will always come up first.
FRISCO Lender Services has both fees on their LOE and are very fair in their fees. The ONLY AMC I’ve seen doing this and I hear from most of them working a rural area.
The vast majority of AMC’s are horrible, but I pick and choose my assignments at this point in my career; if they don’t want to pay my reasonable fee they can move on. I cover 10 counties, mostly rural NY State and I am still able to make a living. I will be writing my Congress person as well as State Senator this letter, hope it helps.
Appraisal Nation is by far the biggest open offender of Federal law in my area. Their arrogance knows no bounds. Hopefully the chickens will be coming home to roost. Next is the false narrative of out of control, industry wide bias and racism being rampant needs to be addressed.
The bid wars wouldn’t be so insulting to if AMCs were actually transparent about the fee breakdown…
Triple dog dare you to ask the Mercury, Scope, Regorra, Appraisal Port or any likewise companies to tell you how many other appraisers any given bid request was also sent to. There is no faster way to upset those people. Because they know immediately your primary purpose is to get them to admit how unethical their own platforms are. They will literally do and say anything to avoid answering that question up to and including secretly changing your primary email to a no replay internal email so you’ll never get a new client again and would not find out about it until years later. They did that to me. I’ve been previously banned by two of the platforms above and down listed by others. Why confront only the amc when the tech platforms make what the amc’s does possible. They’re all in it together. Anyone whom speaks up in favor of appraisers is immediately replaced.
Excellent work here! Thanks! I will get on this ASAP!
Our appraisal board LOVES AMCs because it created another revenue stream for them after the state stole their reserve fund years ago. Why spank the hand that feeds you?
Most state boards are also highly influenced by the AMC $$ – and their attorneys. Our board had the president of an AMC as it’s chairperson. Fox and henhouse ?
Not a coincidence that when amc persons were put on valuation boards, all complaints against amc’s stopped dead in their tracks and never returned. Having amc persons on appraiser boards is like allowing a federal jury seeking to indite mobsters, populated every other person by the mobsters associates. Everyone is too intimidated to speak up or too easily bought off. The model is flawed as the day is long. A small board of seven or so volunteers, at least one of which whom has allegiance to financial corporations or would lose their paying job elsewhere if they voted in favor of investigations, can not successfully put together cases to go against billion dollar financial corporations.
Talk more about; ‘amc’s attorneys’… That would be interesting to explore. Who are they? Where? How are they communicating with board members? When do they step in and why? Records? References?
I’m sure REVAA has some high dollar firms on their retainer list. 1 letter to a state board will take care of 99.9% of any issues.
Dust in the wind …
Done
Thank you! This is a huge help!
I am contacting state and federal legislators already, and this is a huge help!!
Thank you!
Thank you. Will write and send that letter soon. Pre written letters are always helpful. Gets more people involved.
In my state (Texas) an AMC owner is on the Appraiser Commission. What will writing a letter do? They will just toss it for their own interests
Post the links.
Here is the CO board.
https://dre.colorado.gov/division-of-real-estate/about-the-division/division-boards-commission-and-programs
Two appraisers up against commercial banking, amc owner, and a government appraiser.
And look. If you play ball, you get slightly higher fees. Pushing bpo subs for appraisals.
https://www.ascendasg.com/appraisers
AMC reps on a State Board governing appraisers?
There will be push-back from these people to protect their own interests, if it’s heard and acknowledged at all.
I’ve mastered the art of being removed from amc approved panels.
Ask three simple questions and do so consistently;
1. What was the borrower charged for the appraisal fee?
2. How many other appraisers was this request sent to?
3. Why does your company use grading instead of equal round robin distribution of requests?
Works like a charm every single time.
Start filing conflict of interest complaints and openly cc every single news and government outlet in the letter. I have to believe when the secret is put there will be cya by the other members. That’s just how these appointed government types are.
You gave me an idea. What if every appraiser took the time to forward a copy of every AMC appraisal inquiry (not just orders) to the CFPB. It would only take a few days to flood their office and prove your point beyond doubt. It would clearly illustrate how they flood the market with inquiries to extract.the maximum profit for themselves. If that doesn’t work you could do the same thing once again for the union that wants appraisers to join. Very little time required from appraisers and it completely exposes the tactics of AMCs.
Retired Appraiser; Forward amc spam? When I did that with Regorra, they turned off my profile. Scope changed my primary email to a noreply internal corelogic email which meant I’d never pick up a new client again. My profile sat dark for years until I accidentally found out. When I did that with Mercury they added some options, but were still options which penalized appraisers for not being willing to work with amc’s. The question they all refuse to answer; How many other appraisers was this request sent to?
The amc industry attracts predatory persons. The amc’s exercise one of the most inefficient models on purpose; to find discount appraisers whom would be willing to participate in deceiving the consumer about appraisal fee distribution, and rewarding those appraisers with a redirection of the lions share of work orders. So much for equal opportunity. For the lender owned ones the amc also provides cover for a central control and advanced automated tools to delist and black list appraisers, without ever having to inform the appraisers or have any fair measure of equalized order distribution. Kill a deal, run late, don’t posture like a submissive employee, show one ounce of independence, upset anyone through their entire network for any reason, you’re out. You’ll still be on the amc’s panel and will have a profile, but there will mysteriously never be any more work for you. This is called ranking and grading as a cover for ongoing predatory or discriminatory practices.
Remember the most important amc industry tag lines; ‘To save time on appraisals’. ‘Provide more efficient process’. ‘Increase successful outcomes of the appraisal service to close more loans.’ The fact FHFA and the GSE’s now parrot the exact same lines. Appraisal modernization is synonymous with installing predatory lending programs as institutional norms.
Missing the IVPI proposal yet?
https://www.workingre.com/wp-content/uploads/2013/08/IVPI_Questions_and_Answers.pdf
https://www.workingre.com/wp-content/uploads/2013/08/IVPI-ENDORSEMENT.pdf
https://www.workingre.com/wp-content/uploads/2013/08/IVPI-Proposalfinal.pdf