Fighting for Consumer Protection & the Appraisal Industry

Fighting for Consumer Protection and the Appraisal Industry. 

I’m just an Average Joe, surrounded by some really smart people, and we are fighting back. 

I often wonder if Certified General, MAI or SRA appraisers sitting in their ivory towers often chuckle to themselves and say HA, data collectors will never impact commercial. Who cares about the residential appraiser. Well, it looks like it’s time for you all to care.

Copied from a Real Estate Forum Post:

“Good morning,

My name is Kevin Graham, and I am with Beacon Property Data Collection Services. You had recently signed up to become a panel member and we have an assignment for the above referenced property noted to be inside your coverage area. It is for an Exterior only data collection assignment for a commercial building. We are looking to get something back by Friday, 07/21 for a fee of $35. The scope of work is only 5-10 minutes.

This assignment is from an ongoing pilot with a new client so anything you can do to help expedite the order could potentially mean more work in your market area moving forward.

Is this something you can work into your schedule? Thank you!”

Listen up folks. It is time to fight for the entire profession. They are trying to eliminate us all. Licensed to MAI. Think they are not? Think again.

I’m just an Average Joe, surrounded by some really smart people, and we are fighting back. We are fighting tooth and nail for consumer protection and the appraisal industry.

I do not want your money. You do not need to join any fancy groups. I am not a union even though one would come in handy right about now. I need ideas, suggestions, legislative solutions.

I am fighting because I love what I do. After all these years I still enjoy being an appraiser. It has become much harder but my passion to serve the community is still strong.

Be part of our think tank. A movement of individuals who are fighting for change.

Dr Martin Luther King said it best: The time is always right to do what is right.

I think that time is now.

By David Samnick, owner & chief appraiser at Blue Chip Appraisers. David proudly served in the United States Army and is a Desert Storm veteran.
Image credit flickr - Dirk Ehlen

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32 Responses

  1. Baggins Baggins says:

    Brought to you by the appraisal management industry. Axis in this instance. Yet another amc exec pet project. Beacons terms and agreements page for PDC’s was fun to read. Here you go.

    ‘PDCs must obtain express written approval from BEACON before using subcontractors.’ /
    ‘Orders assigned to a specific PDC, may be transferred to another BEACON-approved PDC with permission from a BEACON designee – transfer and approval must happen prior to inspection and be noted in the order log.’ /
    PDC shall hold harmless BEACON and its Representatives from and against any and all claims or legal actions ‘arising from any dispute between PDC and PDC’s employer or affiliated inspection company’ /
    ‘However, while performing services for BEACON PDC will not solicit customers to create business that is unrelated to services being provided for BEACON. (i.e., a licensed Realtor will not leave business card for realtor services while providing data collection for BEACON)’

    HO HO HO! Merry Christmas! A realtor not leaving his business card? OMG, in addition to wiping out an entire industry of quality certified appraisers, they know how to cut realty jokes too. Not a chance in hell the realtor will not leave his card, and nobody will police or monitor anything in this convoluted third and forth and fifth and sixth party services type outsourcing system. The orders will be subbed and subbed again, the vendors won’t even know who they’re working for. But you can trust this is just as good as a licensed appraiser, because, like, they have a voluntary trust self reporting system for PDC’s whom may run afoul of the law. It’s in the agreement, they have to notify Beacon if they are ever in trouble or lose other licenses. Additionally there is no clear definition weather this service would fall under licensing rules for home inspectors, of which roughly half the states in the USA require home inspector licensing. The Beacon application site has no integration into licensing databases and is easy to enter fictitious information. /

    ‘Trip fee: If PDC is unable to complete an order due to no fault of their own (i.e., occupant is not home or similar circumstance) a trip fee of $12 will be paid.’ /
    ‘PDC will not deliver photos to BEACON (whether within reports or otherwise) that display persons or display items such as photos, artwork, clothing, or other personal property that may suggest the race, color, national origin, religion, sex (including gender, gender identity or sexual orientation), familial status, age or disability of any property
    owner, borrower, seller or occupant. Nor will PDC discuss such items in any report.’ It’s an amc wet dream, because they could never have that much authority over a licensed appraiser, when the appraiser was acting as a licensed professional. Good luck to the first PDC to roll up on a rainbow flag and blm sign in the front lawn. /
    PDC represents and warrants that the Services shall comply all applicable state and federal laws (including, without limitation, FIRREA Title XI, the Equal Credit Opportunity Act, and the Fair Housing Act, Gramm Leach Bliley / Yeah, because you know all about those regulatory guidelins when you’re a photographer or home inspector, part timing with grub hub food delivery. Keep dreaming. I’m betting there will not be any qualification or knowledge testing, this entire agreement is worthless. /
    ‘PDC shall indemnify and hold harmless BEACON, and its affiliates, parents, subsidiaries, directors, officers, shareholders, employees, agents, and their respective heirs, successors, personal representatives, and assigns /

    There it is, the indemnity agreement. In many states amc’s are prohibited from asking a licensed appraiser to sign such an agreement. Sign your life away for the privilege of completing discounted drive by’s. Now only Deleware law applies via arbitration rules. I remember the good old days before the corruption of the appraisal management industry. Appraisers would get $200 just for PIR’s, we had no special indemnity agreements to sign, were not subjected to restraint of trade practices, were held to the legal principals in the state we lived, and nobody pilfered half our fee and then kept that junk fee rake secret from borrowing customers and lenders. I’ve been telling you, the amc industry does not just want a piece, they want the whole thing. Amc’s, ‘managing’ licensed appraisers right out of the real estate industry. The PDC request distribution company basically is an amc, less any amc licensing requirements. They found a way to separate the inspection from licensing board oversight. Another successful regulatory work around by the amc industry! Who needs law and order, qualified professionals, fair compensation, transparent billing, or individual licensing anyways? Merry Christmas.
    But they passed our ‘background checks’. Take a special moment to review the very last link I posted there. To date, the amc industry has successfully convinced people the back ground check provides a sufficient replacement to the much more comprehensive and further reaching state licensing requirements. From an employers perspective, someone whom needs people to pass these checks, there are many options for providing tailored peramiters. Beacon went so far as to just leave an open data entry field, presumably allowing people to source their own back ground checks from whomever they so choose, and simply provide those to Beacon. I’ve been telling people to be aware, because their next ‘appraisal’ will be completed by the pizza delivery guy whom will 3d scan their entire home inside and out, that data will be handled by a dozen different tech companies, and nobody involved will even be required to have a license. At first they think I’m joking, until I inform them that the incompetent management at the GSE level really has gotten that bad, the amc influences in real estate have created insurmountable corruption, it’s a true story.

  2. Avatar Pat Turner says:

    Why cannot any sane person tell how insane Fannie, Freddie, and their partners in arms (AMCs) are NOW.

    Where the hell are the regulators and legislators??

    Y’all have responsibilities to bear.


  3. Avatar Dave says:

    Can you say LYLE RADKE. What is wrong with all of you – that is the point person for all of this nonsense. How many time do I have to remind you of this.

    • Baggins Baggins says:

      Lyle is the next point person, in a very long line of people with similar motivations to talk nice to appraisers, while simultaneously eliminating our positions. Let us not forget the captain of this ship is the head honcho at TAF, Bunton, whom earns $750k a year, and does not hold an appraisers license. Mr Bagott blew the lid of this entire industry. Suggest to subscribe to his news letters. I have adjusted the Andre Perry photo which will live in infamy, to these modern times. If you are an appraiser whom works mortgage lending, regrettably, bad news, you’re fired!

  4. Avatar Amy M. Cert Res says:

    Not just a little late to the party, but a lot late. Appraisers had their chance years ago, however they allowed themselves to do what they always do and that is think this “the appraiser profession will never go away. They need us. I lived through the crash and the crisis and this too shall pass”. Until it doesn’t. Then of course they bring in their political feelings and well we all know how that goes.

    I applaud all those still trying to fight the fight, however I also am very reasonable and know that this split profession is getting closer to extinction than a new day.

    There are too many organizations out there who are friends with others and will continue to supersede the independent appraisers. Just look at AI and NAA. Both only care about what’s best for them. NAA is made up of AMCS and appraisers. They play favorites and want people in charge that conform to their outside partner standards and well most of the leadership is AMC people. Just go to a conference by them and see just how they are buddies with FNMA/FREDDIE and others. I mean how many times can you have Lyle Radke at your events and have him babied? Then look at AI, who keeps pushing their own agenda and what’s best for their members who are amc owners and more.

    So now we add another organization or a THINK TANK and they expect to change the appraisal world by going to meetings and talking to government agencies. I say good for you, however you will need more than your words and lots of $$ to change things. I think I saw something from someone in another forum that said “this new think tank will end the divide amongst appraisers”. Hmmm. Really? I want to drink what you are drinking and I also see this as a new way for many to try and stay relevant. Past failures create new opportunities. Try try again.

    In the end. I wish things would and could change however, $$ and power will win. It will win even more so when the leadership is the same as in the past that has failed over and over.

    There have been many efforts to talk to the CFPB, congress and more. We have seen our very own appraisers testify and well, most if not all dropped that ball when they had a perfect chance to make the points.

    Here is the last point. No one cares about appraisers but appraisers.. It’s about the consumer and the public. When you make it about the appraiser and cry and whine, they don’t care. They aren’t here to protect us just like real estate appraisal boards.

    I hope you all succeed and change things. Would be nice to see. I’m ready to retire and go enjoy my life.

    • Baggins Baggins says:

      I’ve spent twenty years promoting better consumer protection principals. Because in turn, solid consumer protection also helps appraisers have successful careers, as our service is an integral part of the checks and balances systems. Turns out, nobody actually cares about consumer protection. There is no protection from the government regulatory systems, those guys are all co opted and write all policies from a corporate friendly standpoint. Mortgage lending has become a captured industry where corporations self ask and write their own policies which ultimately just restrict competition to the market spaces. The supposed concern for consumers and financial security of citizens exists only on paper, because in the real world they will all do and say anything for their commissions or to get their organizations ahead of the competition.

      You know I loved being an appraiser too, the independence, the rich opportunities. Until one day those opportunities were restricted as all those thousands of appraisers continued to cross the picket line to work with amc’s, ignoring the obvious ethical challenges and blatant violations of fair dealing principals. Their efforts contributed to building the apparatus which is removing the remaining appraisers from the picture today.

      We always knew when the tipping point would be, when the low rate rush eventually subsided. Because that is when the appraisal management industry would not abide market forces others are subjected to, supply and demand, contracting rather than expanding. But rather they would aggressively expand into other sectors and capture a broader range of lending related working opportunities instead. The amc industry has never cared about the harm they caused the people in related industries, because aggressive tactics paid well, and nobody ever held them to account for unethical behaviors except in rare instances. They have been getting away with pay to play schemes, racketeering, collusion, what was supposed to be illegal fee raking which should have resulted in $10k/$20k daily fines per Dodd Frank Reg Z on C&R billing for every single amc order sent for well over a decade now, a series of false service claims and outright violations of the laundry list of regulatory structures they claim to uphold. For appraisers whom did not see this coming a mile down the tracks, they were blind.

      The amc industries end game is really quite brilliant. Now they’ve carved out a way to have the home inspection process for valuation services to become outside of the umbrella of regulatory oversight. They’re checking all their long term wish list goals off; discounted pricing, 24 hour turn times, everyone signs an indemnity agreement, individual amc worker licensing was never and apparently will never be required, no more worker shortage which the amc industry themselves caused by redirecting literal billions of income away from the appraisers doing the actual work, cherry on top is the $12 trip fee. These are terms most appraisers refused to abide in the first place, but some did. Indeed Amy, as they say; Welcome to the party.

      I’m a one man think tank and people will miss me when I’m gone from these boards, which hopefully will be soon. Everything you need to prove legal cases lies in the rich history and links posted on this website. Happy hunting and don’t stop reading. Like you’ll need to go several years back just for starters. I simply don’t have time or inclination to post everything over and over again in the hopes someone will finally get it. But in a nutshell when one is bound by legal principals, they are subsequently exposed to the risk of penalty if they do not abide those rules. There is no special exception for the appraisal management industry but because that industry came after the fact of so much regulatory development, the amc industry has never actually had to abide adequate regulatory oversight. If any licensed person in other industries engaged like amc’s, they would be clearly in violation of multiple statutes both local and federal. What holds the amc industry up is clever lobbyists and slick as hell legal teams, because the lists of provable offenses are indeed lengthy. Think RICO because if anyone successfully put a class action together on behalf of appraisers against amc’s, has the potential to be the biggest class action in American history. They siphoned billions and eliminated what appears to be 150,000 professional appraiser careers and counting, tag on another hundred thousand or more appraisers whom never materialized but rather became amc industry employees instead. Please advise when the CFPB’s fictitious safe harbor rule pertaining to C&R compensation will be rescinded.

    • Retired Appraiser Retired Appraiser says:

      “Here is the last point. No one cares about appraisers but appraisers.. It’s about the consumer and the public. When you make it about the appraiser and cry and whine, they don’t care.” ~ You hit the nail on the head there Amy.

      This is why I believe the only solution is to sign up homeowners in a class action against AMCs for engaging in fraudulent activity and theft by deception (see any HUD 1).

  5. Avatar WAD says:

    In the past, I always thought it would be great if 75% of all appraiser’s just stopped accepting assignments for about 3 months. That thought went away as I began to think of all the solutions for that problem. Now you can add AI as a solution I didn’t have back then. I know one state who has lumped in the appraisers with home inspectors under one umbrella. Someone knows what’s coming.

  6. Avatar Dave says:

    Little known FACT Mr Baggins – FIERREA exempted Fannie from USPAP – surprised that go past an old gouger like you – Go figure – Bunton is a pawn – Keep your eye on the ball – Radke! Speak up fellow appraisers! You always NEED Not know who the enemy is!

  7. Avatar Honest Appraiser says:

    How’s theM bifurcations working out?? What’s the status?? i don’t think they are working soooo… now I’m supposed to take my car out and drive around for a $35 fee and then hope they pay me next month?? Meanwhile the AMC still gets $750 for providing an “appraisal”. I don’t see this ending well for the Radke crowd. I’m seeing a Bud Light / Jason Aldean reaction when this scam is exposed. NOT IN MY TOWN !!!

    • Baggins Baggins says:

      I just wrote a damned dissertation on the matter. But should I actually post it? Does anyone care and actually want to read another total recap of how the appraisal industry fell? I’ll post of anyone requests. I’d rather be fishing but it’s too dang hot, 100′ in CO today.

      • Avatar Pat Turner says:

        Damn right you post it.

        Call me when you can
        Pat Turner

        • Baggins Baggins says:

          Oh hey, thanks Pat. Or, well, let me re read this here today and perhaps tomorrow. It’s literally like 3 pages long in my email draft. I keep tinkering with it and adding subtracting, so it’s more like an article now rather than a post. Hang tough I’ll get it out there if you want to read, one person paying attention is enough for me. Thanks. Probably mod will want to post it as an article, so I’m sort of how to present this. Will re read again today first. Spent like almost nine hours writing that up a few days ago.

          • Baggins Baggins says:

            All right, here you go! I’m a lumberjack and I’m o.k., sleep all night and work all day.

            Oh, wait, that’s not it. I might as well write a book because this isn’t even the half of the story. Has to be some limit though. BRB.

            The following excessively long post started out in response to Dave’s above comment on regulatory exemption structures.

  8. Baggins Baggins says:

    In the updated video clip image I posted above, which shall live in infamy, when Mr Perry was the only one to raise his hand when asked if there was a problem with racism in the appraisal industry, which I cleverly now updated to include everyone with their hands raised. I also included Joans spaghetti map of appraisal related regulatory authority as a reference to this complicated topic matter. Additionally I mentioned how regulatory structure never actually encompassed the amc industry properly, the amc industry coming in after all other regulatory structure development.

    The persons whom wrote Dodd Frank included the C&R billing rule specifically for amc’s, with a $10k/$20k recurring daily fine provision, which was specifically meant to stop the expansion of the amc industry, to stop those companies from pilfering the appraisers fees and defrauding consumers in the process. After the CFPB’s safe harbor interpretation, references to the $10k/$20k daily recurring fines for amc’s was silently removed from Reg Z wording, as that became instantly irrelevant, since amc’s would no longer be subjected to rules which stated ‘they should compensate appraisers at a fee rate, as if no amc was involved.’ FTC vs Lousiana regulatory board which came years later illustrated the inadequacy of regulatory structure at hand, they actually ruled in favor of continued unrestricted unearned fee raking, unbeknownst to the consumer. The noble members of the Louisiana board were the only state agency to try and actually implement C&R rules, as they were originally intended to be implemented, exactly as first written, to correct the erroneous CFPB safe harbor interpretations.

    To reference Mr Retired Appraiser as well, the amc lobbyist actions of bullying in a CFPB ‘safe harbor’ provision which changed the definition of C&R compliance also coincided with the event of reformation of HUD 1 forms, where the industry heads selected a new consumer disclosure form, among several possible choices.

    Specifically the amc industry and partner lenders sent big deal lobbyists to persuade not to select the HUD 1 version which specifically included an amc billing line as it’s own unique line item, set apart from the appraisers compensation fee in a clearly separate disclosure line. That now abandoned form was developed under the notion that Reg Z C&R would be enforced and therefore amc’s would need to state upfront service charges which would be recorded on the new disclosure forms. Consumers nationally would have been made aware of the amc’s superfluous variable additional billing charges, and could have made better informed decisions. Instead we have an imbalanced state by state amc regulatory structure which is wholly inadequate, where in some states it’s legal for amc’s to silently tag on additional secretive fees, in other states they must disclose.

    Most state agencies took the position it was the lenders responsibility to provide oversight of the amc, as the amc companies activities fell under the purview of regulatory oversight for lenders. Most state based amc regulation was focused around timely compensation to appraisers rather than fair compensation. Nevermind the scale of david vs goliath, as it’s basically impossible for an individual appraiser whom was subjected to amc pressures to bring successful challenges to the lenders purposeful disregard of the harms their selected amc causes consumers and appraiser vendors alike.

    Instead we ended up with improperly co mingled billing, and the CFPB safe harbor interpretation which allowed the amc industries rapid proliferation and fee pilfering to continue. An activity which if engaged in by any number of other licensed individuals would clearly represent violations of ‘junk fee billing’ and ‘unearned fee raking’ provisions already present in existing guidance and regulation.

    Even the Federal Register had special wording that amc companies were not to select appraisers by fee, but rather should select appraisers based on experience and best interests of consumers and such, issued in a similar time frame. However, the allure of unregulated junk fee billing was too great for the amc industry to resist, which is why the entire body of these companies all either kept their unearned fee raking model or finally switched to the unearned fee raking maximized profit model.

    You can not find a single amc company out there, nearly two decades after amc companies began proliferating, which clearly bills separately for their ‘management’ service. The primary goal of this improperly co mingled billing is to drive appraisers compensation down, drive consumers costs higher, and pocket the difference. In turn, the amc industry used this variable excess compensation to create a myriad of ancillary services and tools which places consumers in even more harm, also meant to substitute the appraisers presence entirely. Coming to fruition now in the form of ‘modernized forms’, ‘certifications for avm valuation estimates’, ‘property data collectors’, and PAREA programs which provide provisions to skip apprentice and field training in favor of inadequate virtual training to be an appraiser. In turn allowing rapid licensing of employees of amc companies to become appraisers, whom will not be subjected to similar rules as independent fee appraisers. Also special bonus, PAREA arguably has constitutional violations on selecting PAREA participants based on affirmative action type principals, which the supreme court just struck down in education specifically. The appraisal industry has remained frozen in time, most appraisal companies unable to expand, hire, or train, as all that potential energy went to the amc industry instead.

    For those appraisers whom did capture amc work, there is a long standing argument the reduced compensation did effect work quality, as well as creating systemic training deficiencies for new appraisers whom were brought up in the amc world. Mr Ford from the AGA group as seen to the left of this post, covered that topic, analyzing a GSE White Paper written on the matter, which was basically an industry cover up to shelter the amc industry from accountability. We were able to infer from the data there however, that only one out of four licensed appraisers submitted appraisals to the CU data base, while working with an amc company, and that half of all licensed appraisers no longer submit reports to the CU database. As the amc industry then continued to brag about record setting business growth to the appraiser community whom they took those opportunities away from in the first place.

    Several of the amc’s cleverly maintained consistent billing and consistent appraiser compensation with some of their major volume clients, so when audited, they could claim there was no such imbalanced compensation activity happening, even though it was beyond obvious the amc industry at large had moved to this bidding variable fee raking model. Every single licensed appraiser in America at some point dealt with amc bidding requests.

    Appraisers decried the unfair nature of this daily, and roughly half of all licensed appraisers left the field of mortgage lending as a direct result of the regulatory structures inability to reign in these corrupt amc business practices. Tens and tens of thousands of appraisers quit overnight, on repeated occasions. There was a letter writing request at the Federal Reserve over this matter and if I recall correctly, that publicly available body of appraiser objection letters numbered in the thousands of appraiser responses, nearly all containing similar pleas that the amc industry would decimate the best of the valuation services members and eventually cause a shortage of appraisers.

    Any appraiser having dealt with these pressures can relate to the end result of the amc industries applied pressures on appraisers; ‘What is your fee and turn time?’ They routinely call fifty or more appraisers for every single order request, in order to maximize their fee raking profits. Appraisers known to always provide the lowest fee (the most thing of value to the amc, to be the preferred selectee, aka the largest bribe) are gifted with direct assignment, and the lions share of work orders.

    The response which placed any given appraiser into immediate appraiser non grata status was simple (aka blacklisting); ‘ What did you charge the consumer for the appraisal service? Because that should be my appraisal fee.’ Hence my long standing rebuttal; ‘Distinctly different fees for distinctly different services’, separated billing. Or as they used to say, get the amc’s hands out of the cookie jar.

    This allowance for amc companies to take variable fee raking from the total appraisal fee resulted in an entire generation of appraisers receiving the upper hand with massively imbalanced work flow, incredible business expansion, as the rest of their otherwise worthy and equivalent peer appraisers lost fair access to those work flow opportunities. Those other appraisers whom lost out, the ones whom understood this ethical violation and departure from the management rule that we should not ‘provide a thing of value’ to be the preferred assignment selectee. Understanding this was an untenable and unethical engagement, which we should therefore refuse out of general principal and adherence to ethical standards.

    Despite the cosmic cobra effect and systematic bi annual re writing of the supposed ethics book for this industry, and continued pleas from tens of thousands of remaining appraisers, no powers that be were willing to face up to the idea that it was a violation of ‘the management rule’ for an appraiser to provide a discounted fee, in order to be the preferred selectee. ‘It’s only a discount, not a bribe.’ ‘Then why doesn’t the consumer save any money!?’ At a minimum, an indisputable fact that amc’s do not benefit consumers with any cost savings. Yet the amc industries apparent primary focus is carving out lower vendor fees. The lending community and GSE heads now parrots the cost savings line in unison as supposed justification to eliminate appraisers entirely, ignoring that the appraisal services fee is actually an improperly combined fee from multiple companies, an individual appraiser, and a corporate amc entity.

    Clearly an appraisers fee reduction from the amc companies point of view, is nothing short of a bribe to receive ‘the lions share’ of work orders, ahead of otherwise equivalently if not better qualified peer appraisers. Evidence of this imbalance surfaces routinely, I believe it surfaced recently on this blog, with the story of the one appraiser company receiving millions in compensation from a single amc, and the next most compensated appraiser firm received only a fraction comparatively. That is not fair distribution and there was nothing that special about their service to warrant the imbalance, except those appraisers had the lowest fee, by which the amc profited more, and consumers never saved a dime. Tried to find the article, too far back, had an image disclosure of the one appraisers having been compensated millions of dollars via some court discovery.

    Or you could just look up ‘The Appraiser Coach’ for lessons on how to claim unfair advantage over more deserving appraisers in this industry and skate away scott free with their entire workload, drive your competition straight out of business, aka restraint of trade practices in a free market setting. Despite that activity being clearly illegal in many other unrelated industries. If a person in government called for biding on contracts in this manner, then selected the lowest cost vendor, then charged the maximum service charge amount to the budget as if vendors never provided lower cost services, and kept the difference as undisclosed personal profit, they’d be guilty of embezzlement and be hauled straight away in shackles and handcuffs to a federal prison.

    The appraisal industries general recognition of this became quite simple; Survive by refusing to work with mortgage lending and GSE’s, because amc companies dominate over 80% of all work in these fields. There is no shortage of appraisers, only a shortage of appraisers willing to play ball for amc’s.

    There was no need for appraisal modernization and industry retooling efforts in the first place. There would have been a near instant recovery of the appraiser vendor populace and their ability to serve the lender community, if not for the amc companies lasting presence. Roughly 40,000 appraisers would instantly return to mortgage lending, if Reg Z on C&R compensation was actually enforced as originally intended. Rather, when the CFPB safe harbor rule was implemented, the appraisal industry shed a hundred thousand licensees whom built their business solely around mortgage lending work. A substantial portion of a well qualified, experienced, and educated professional workforce, vanished in an instant. Over the next decade and a half, appraiser populace went from nearly 200,000, down to 80,000. Half of the 80,000 whom remain today refuse GSE work due to amcs. Of the half that are willing to complete GSE work, half of them refuse amc work.

    When a lender chooses to utilize an appraisal management company, they purposefully deny themselves access to three quarters of the licensed appraiser community. A lenders cries of inadequate appraiser servicing is a self imposed illusionary hardship. Because they only want to work with pliable appraisers. Amc’s, the long arm of predatory lending interests. However this assists appraisers in more easily identifying ethically adherent lenders; they do not use amc services.

    This is beyond a clear example of restraint of trade practices, that amc’s have caused 75% of all remaining active appraisers to boycott their services. This is industry racketeering as persons within government collude with persons within lending and the amc industry, to purposefully drive out qualified licensed professionals, with the intent of replacing us with automation which is absolutely inferior and will cause great consumer harm. As Jeremy Bagott wrote; ‘Exploiting gutted mortgage underwriting.’ Wizardry.

    Appraisers like myself are the last of a dying breed; focused solely on mortgage lending and default management, but refusing to work with amc companies. We maintain the position our goals are service to the public by way of regulated government institutions involved with mortgage lending. You know, in support of the American dream of home ownership?

    We held the line and shifted many a lender away from the amc model, but this was a moving target and difficult goal, as we continue to operate under systematically applied pay to play systems and are subjected to daily restraint of trade practices. Many of us have spent far more time dealing with amc harassment and demanding they stop contacting us, then we ever spent in our brief try outs with these companies. Hardly any of the amc employees understand regulatory structure. Except for one single appraiser, the entirety of any given amc company employee set is unregulated, and unlicensed. They routinely run roughshod over any appraiser they work with, and similar treatment for any unfortunate consumer the lender places in front of them. See Yelp reviews of any given amc company for proof of their service quality from a consumers point of view. The amc companies are unrestrained by regulation. Appraisers whom work with amc companies are disposable heros.

    This defies logic and normal reasoning to accept that regulations apply here, but not there, etc. That is in fact, a major part of the problem. For those not understanding why Dave’s post is so important here, it’s important to have a basic understanding that this exact reason of regulatory authority and the confusion there to, has allowed the appraisal management industry to basically branch out to limitless sectors within real estate and lending, and remain virtually unregulated. Reasons for these moves towards appraisal modernization is a mechanism to allow amc’s to operate without similar oversight as regulated licensed individuals. Total elimination of a very valid check and balance, the independent fee appraiser. This needs to end.

    What was the point of even writing all these various regulatory guidance documents, if a new company type can simply move in and ignore every last rule and operate outside the scope of regulatory oversight? But that’s what the amc’s have done, and is exactly why these companies have a consistent predictable motivation to systematically replace the duties of all licensed individuals, claiming that market share for themselves instead. They will not stop with appraisal related items. They’ve already branched into inspection, sketching, software development, forms development, order management systems, data retention systems, now commercial, etc, etc.

    One of these days we’ll have to sit down and have a heart to heart conversation about how most appraisers feel about appraisal management companies, and specifically why we feel that way. Personally, at the end, nothing happening, my lenders went under, the end is near. But if I were to apply to amc’s, I could still be completing one appraisal or more every single day. All that would take is for me to play ball and steal that work away from the other amc appraisers, by way of providing a greater incentive to the amc to send me the work order, by way of a lower fee. I would simply have to abide the amc companies requested terms that I keep my compensation secret from the consumer. Some may call that a predatory engagement strategy, to take from others rather than earning the position through merit, so we therefore prioritize fair dealings and ethic first. Human decisions which are subsequently driving another 20,000 appraisers out of business soon as ‘appraisal modernization’ becomes broadly implemented. Modernization! Equity!
    (control +F) to bring up the find tool. Search; ‘Customary’. then Appraisal. then Inspection.
    Regulation Z seeks to ensure that real estate appraisers, and others preparing valuations, are free to use their independent professional judgment in assigning home values without influence or pressure from those with interests in the transactions. Regulation Z also seeks to ensure that appraisers receive customary and reasonable payments for their services. Regulation Z’s valuation rules apply to creditors and settlement services providers for consumer credit /
    My question is are amc’s still in compliance with these rules, having so much stake in all these ancillary services they now provide in addition to just managing appraisers out of the picture? Are those exemptions noted still applicable if basically the amc company now provides the valuation service themselves through avm’s, partner affiliates, and employee appraisers?

    More specifically, Regulation Z:
    Prohibits appraisers and appraisal management companies hired by lenders from having financial or other interests in the properties or the credit transactions;
    Requires the payment of customary and reasonable compensation to appraisers who are not employees of the creditors or of the appraisal management companies hired by the creditors.
    The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended TILA to include several provisions that protect the integrity of the appraisal process when a consumer’s home is securing the loan. The rule also requires that appraisers receive customary and reasonable payments for their services. The appraiser and loan originator compensation requirements had a mandatory compliance date of April 6, 2011.

    They gutted the original spirit of the C&R rule. I’ve scoured the data bases for the $10k/$20k amc fine language but can no longer find references to this. Biggers wrote a piece before this happened which mentioned the fines, and appraisers still maintained hope to reign in the amc industry. Attached. If you were an Alamode subscriber, search for Dave Biggers emails in your 2010 emails for the full letter. I posted several waybackmachine Alamode articles as well in previous posts from earlier this year, and you can also find those quite easily and look through them yourself if desired.

    Thanks David Samnick for posting this brief, but inspiring article. At this point we’re just rehashing the same regulatory shortcomings, the same appraisal management racketeering evidence. Unless some miracle client shows up or more companies turn course and go back to ordering full appraisals, the end is near for every single independent fee appraiser whom has thus far relied on GSE work. There would be enough GSE requests to go around and sustain all of us right now, benefit consumers with our services, if not for all the changes. By imperial decree, GSE heads in coordination with a corrupted co opted group of appraisal organizations whom are managed by everyone except working appraisers, have retired our positions. Retired Appraiser and the other hundred thousand appraisers who walked away were right, there is no saving this industry. American consumers will ultimately pay a much dearer price than we have. But at least we tried to hold on to traditional checks and balances and consumer protection principals. Who knows, maybe these interests will defeat themselves, having finally achieved their goals. Perhaps one day we could look forward to a total abolishment of the GSE programs and see a return to sensible lending where risk management is not shouldered by the taxpayers. Thanks for reading on The Appraisers Blogs. Cheers.

    • Avatar Honest Appraiser says:

      You can move to any town in the USA and take ALL the business from the “locals” just by cutting the fee by $5. The AMC business model will never be satisfied until the Independent Appraiser is paying THEM for the privilege to do the work. What a scam they have had since 2009. Infuriating, cruel and a violation of TILA in every respect.

  9. Avatar David says:

    Shrinking professional numbers, impossible to get license and free market system hurts – well that’s America!

    • Avatar Honest Appraiser says:

      It’s not really a free market when AMC’s contol 80% of GSE work and treat the Appraiser as their chattel. In 2007 they raising requirements because there were too many Appraisers. Since the AMC’s stole our business model in 2009 now…. not so much reason to go into this “business”.

      • Avatar Maria says:

        Where is FTC?

        • Baggins Baggins says:

          In our family we say; The very last place we turn to for safety advisement is the government. Every single regulatory agency has been captured by the corporations they pretend to police. Every last one of them. The FTC, FCC, FDA, and the long list of others, are exactly where we left them. Just one problem, half of their staff has already been or will soon be employed by the corporations they portend to regulate. Lobbying as a career choice for monetary compensation should be illegal.

          • Avatar Maria says:

            I am from another continent, and after living in the US for over 25 years, I still cannot understand why lobbying is not illegal? Why people are OK with that? let being taken the power from their hands? I do not recall that would be the goal of the Founding Fathers. I feel I am from another planet…

  10. Avatar Dave says:

    supply and demand – free money is gone which provided huge appraisal fees, 6-7% money is called huge slow down and the rush is OVER. I’m sure I am not the only one who realizes this. Hope you put some of those huge profits away.

  11. Baggins Baggins says:

    Attention. I have the cherry on top.

    Holy smokes!

    And you know, anyone with an ounce of pc and photoshop related skills can and do create similar documents at home for themselves, unbeknownst to anyone else, unless they are identified individually.

    The business advertised its products as theatrical props, educational tools and good material for playing a joke.

    Consumer protection investigators and state prosecutors branded the offerings as fraudulent, devastating, and even dangerous.

    “The false documents this company sold, including those used by criminals to victimize Coloradans and to fool law enforcement and other officials, were not harmless props,” stated Colorado Attorney General Phil Weiser in a press release.

    Prosecutors claim the business has filled tens of thousands of orders over the past two years and expanded its offerings to more than 70 types of false documents.

    Coming soon out of the basement and to an actual store front near you. In fact, a darn miracle if this is not already prevalent in your state as well right now today.


    Beacon Property Data Collection services allows applicants to source their own and submit their own records checks to their company. Can’t make it up. All I was doing is routine news reading, and come across that piece.

  12. Avatar Maria says:

    I am getting surveys from AMCs if I am willing to do hybrids. I tried, did 5 reports. It was a mistake. I will not do more. WE ALL NEED TO SAY NO. It is the way our fees will be locked on minimum wage level, while we take all the responsibility and everything comes with.

    • Baggins Baggins says:

      Welcome to the party. A few years late but welcome none the less. As far as responsibility goes, talked about that many times. Exponential increased liability burden via increased volume, the full weight of uspap and specific sow still applies, no meaningful relief via assumptive theory in appraisal disclosure disclaimer language games can save you. Amc’s win again. Get your mind around the concept that appraisal management companies purposefully game the system and treat appraisers as disposable hero’s, while remaining unaccountable themselves. My vote remains for individual licensing requirements for every single amc employee, right down to the janitor. If they are ‘managing’ appraisers, every one involved in that process should be required to hold an appraisers license themselves. The point of the amc industry from the very beginning has been to pressure and intimidate appraisers, while simultaneously shifting liability to appraisers while finding clever work arounds to escape traditional conventional regulatory oversight. Mission accomplished. Appraisal modernization! If you are serious about discovery and industry change, send your real world contemporaneous examples of these products faults and engagement terms to Mike Ford with the Appraisers Guild, or the administrator of this website. The end is near.

  13. Avatar DAVE says:

    What on earth possessed you to do that work for $100 or LESS? Five reports, really!
    We are not homeless yet – LOL!

    • Avatar Maria says:

      First fee was $300, last one $410. Every time I ended up working more than if I would do the inspection. (I guess they are desperate, but one less victim on the market.) One property was 5 min walk from the office. I tried. I learned first hand what is it about.

      The idea is, that they take the inspection from our hands and everything they can, except do the, truly the appraisal work, the analysis. With every step reducing our fee. The problem with that is that I can diversify and delegate the inspection to someone I trained, and let others do the administrative work hired by me. Still all is in my hand, so I can do a throughout analysis. AMC is a fancy name, but their presence is a cancer.

      We have the responsibility to educate both the public and representatives. Oh, also mortgage companies, as they do not know what is the law. All mortgage officers I talked with thought they cannot hire directly a contractual appraiser.

  14. Avatar Dave says:

    Maria, I applaud you for your honesty and specificity. While you were able to charge on average $350, to your point this is half of what you should be charging for a traditional appraisal, doing the same work, assuming far more risk exposure and in the end they win and we lose. They got the product for half price today with the goal of paying 25% as time goes on. Without Lyle Radke, Fannie would not be pushing this dumb down approach in the financial services industry. I hope our colleagues would jump in and point out that current work is heavily loaded with refinance and 97% loans often with high seller kickback to closing costs. With an increase in risk, comes an increase in mortgage failures, The lender’s client (NOT OURS) are no longer “I can pay cash and roll it later”. Current economic news clearly reports issues with banks stability NOW not tomorrow. Be vigilant and continue your quality work and all will be fine!


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Fighting for Consumer Protection & the Appraisal Industry

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