Inactive Shouldn’t Be the Only Option
The Appraiser is right, but “Inactive” shouldn’t be the only option on the table. The frustrations highlighted in “Locked Out of AMC Panels Over UAD 3.6: Going Inactive” show a massive breaking point.
I read the recent piece from an unpanelled certified residential appraiser who’s turning down UAD 3.6 assignments, and I recognized every word of it. After more than 30 years as an appraiser, I’ve watched this story play out more times than I can count. A fee survey asks what the work is worth, and then a “market rate” ignores the answer.
The author is right about the core problem. UAD 3.6 asks appraisers for more time, more data and more granular analysis, yet many are being offered the same fees, or less. When the fee split stays hidden from the borrower, nobody outside the transaction can see how little of the appraisal fee actually reaches the professional who inspected the property, pulled the comps and signed the report.
But I want to push back gently on one assumption in the piece: that the only choices are to accept the fee or go inactive.
The AMC model is a choice, not a requirement.
Somewhere along the way, much of the industry came to treat AMCs as mandatory. They aren’t. Appraiser independence rules require that lenders keep their loan production staff from influencing appraisers. They don’t require a third party to sit in the middle and take a cut of every fee.
Lenders can order appraisals directly, provided independence is protected. The VA has done exactly that for years, using rotating local fee panels with no AMC in between. The same principles work for conventional, non-QM and private loans:
- A lender-owned panel of local, geographically competent appraisers.
- Automatic rotation, so no loan officer ever chooses who gets the order.
- A transparent fee structure, so the borrower can see what the appraisal costs and where the money goes.
- The full appraisal fee paid to the appraiser, without a markup taken out first.
What changes when the middle layer comes out
When the intermediary’s markup goes away, the math changes for everyone. Appraisers can be paid for the hours UAD 3.6 actually takes. Borrowers can pay less at closing. Lenders get local appraisers they know and trust, and a process they control instead of rent.
Nothing about this is theoretical. The technology to manage orders, rotation and communication between lenders and appraisers has existed for decades. What’s been missing is lenders realizing they’re allowed to use it themselves.
A better model exists, and it’s ready today
This is exactly why I built PAM. The AMC model isn’t working well for lenders, who give up control of their own appraisal process, or for borrowers, who pay a markup that does nothing to improve the appraisal. And it clearly isn’t working for appraisers.
PAM is a platform lenders can use right now to run their own appraisal process, much like the approach the VA has used for years:
- Lenders build and own their panel of local, qualified appraisers, and our software rotates every order automatically to protect independence.
- Appraisers keep their full fee. Nothing is taken out first, there’s no cost to appraisers to receive or upload an order, and they’re paid the next day after upload.
- Borrowers pay less. Instead of a markup, there’s one flat, disclosed $99 platform fee, which typically lowers the borrower’s appraisal cost by 25–40%.
- Lenders pay nothing and sign no contract. They get control, local expertise and lower closing costs for their borrowers.
It values all three people the appraisal is supposed to serve: the lender, the borrower and the appraiser who does the work. If you’re a lender ready to stop renting your appraisal process, or an appraiser who wants to work with lenders who pay fairly, I’d welcome the conversation.
What appraisers can do now
Going inactive sends a message. Pairing it with action sends a stronger one:
- Talk to the lenders you already know. Many don’t realize they can order directly. You may be the one who tells them.
- Keep pushing for fee transparency. Borrowers deserve to see how their appraisal fee is split.
- Point lenders toward lender-direct platforms like PAM, where the fee you quote is the fee you’re paid.
The author closed by saying we need to stop having these conversations behind closed doors. I agree. So let’s have this one out loud: the AMC markup isn’t a law of nature. It’s a business model. And business models can change.
