Low AMC Appraisal Fees? FDIC Wants to Hear from Appraisers
- Federal Valuation Agency Impact on Appraisers & the Public - July 22, 2022
- Is Georgia Going Rogue? - June 13, 2022
- Bias in Automated Valuation Models - February 28, 2022
AMCs paying low fees, Appraisers and Regulation Z of TILA
VaCAP recently learned of some encouraging news. The FDIC wants Regulation Z to be followed and will enforce it for appraisers. Here is what VaCAP received from an appraiser who reached out to the FDIC:
I just had a call from an extremely pleasant lady named Susan Welch from the FDIC Consumer Response Center (1-800-378-9581). I had sent a note over regarding an AMC attempting to get me to sign a “Base Fee Letter” agreeing to a drop of my base fee for full appraisals to $325 from $400-500. She said the FDIC is VERY interested in hearing from appraisers regarding AMCs paying low fees. As you know FDIC regulates the banks, who are responsible for third party oversight with AMCs they engage. FDIC wants Regulation Z to be followed and will enforce it for appraisers.
Incidentally I opted to have them proceed while keeping me anonymous, a la whistle blower status. Susan said she would be surprised if they had not investigated this within 90 days.
FDIC bank examiners will contact the bank involved and look at their procedures for engaging appraisers, look at fees appraisers are actually paid versus what is considered C&R based on things like the VA sheet and go from there.
Instead of appraisers complaining about AMCs paying low fees, it’s best for us all to take a little time and file an appropriate complaint.
The FDIC VERY much wants to hear from appraisers and is VERY INTERESTED in appraisers not being paid C&R. They cannot do anything about AMCs directly, but the banks sure can.
Federal Deposit Insurance Corporation
Consumer Response Center
1100 Walnut St, Box #11
Kansas City, MO 64106
FDIC’s Electronic Customer Assistance Form
Complaints against AMCs go to:
Regulatory Programs and Compliance Section
Department of Professional and Occupational Regulation
9960 Maryland Drive, Suite 400
Richmond, Virginia 23233-1463
Phone: (804) 367-8504
FAX: (866) 282-3932
Make sure to follow the proper procedures to file your complaint. There is nothing worse than having the complaint dismissed due to a technicality!
My first reaction is thanks for the information, however my 2nd reaction is why most appraisers don’t file complaints. Regardless, if you think it can be anonymously, the AMC and lender will figure out who the greasy wheel is as soon as they are given an address or loan number. THERE IS NO APPRAISER INPEDENDANCE AND THERES A GOOD CHANCE YOU WILL BE BLACKLISTED. This blacklisting does not have to be above board in the form of a removal letter, but simply you will remain on the panel but never receive work again. Here’s a suggestion, as the burden of proof is on the lender and their hired puppet AMC’s to pay C&R fees, lets make it a requirement in the engagement letter for them to show us how they determined the fee? Did they base it on an academic study, independent study, VA schedule? Did they use Joan Trice’s Allterra Group, LLCs National Appraisal Survey? Did they use Brian Coasters in the process of now trying to be patented automated customary and reasonable appraisal fee calculator? See AppraisalBuzz June 14 heading (CoesterVMS seeks patent for automated customary and reasonable appraisal fee calculator) and my comments. If the regulators are really concerned with C&R enforcement, and all lenders and AMC’s pay C&R as they say they do, then show me YOUR WORK. My 3rd reaction is…..
Excellent article. Thank you!
Bill, not necessarily. I just filed 3 complaints with FDIC for $275 AMC appraisals completed by other appraisers. These are not my appraisals. I don’t do AMC work.
This is our chance people. Let’s make ourselves heard!
It would be nice if appraisers would pick one week and just bury the FDIC with the info they claim to be interested in seeing. Call me an old curmudgeon but I suspect they could receive 200,000 complaints and you’d never see them take action on it.
After you’ve seen the government cry wolf a few hundred times you eventually learn to roll over and go back to sleep.
I quit appraisal when RELS wanted me to agree to a measly $210 an appraisal when the average appraised value I dealt with was close to $1M. What a scam, especially when owners were thinking I got the whole $500+ that RELS charged the client.
The scam goes beyond that. Lenders are supposed to be charging 1k+ for those, and they used to charge that much. Race to the bottom, and all of that.
A colleague forwarded this info to me a couple of hours ago. Apparently, StreetLinks is giving bonuses to appraisers accepting unreasonable turn around time. And I bet that even with the $100 bonus they are still not paying C&R fees!
They will be “assiging” files… This must have been written by one of their High School Review Appraisers.
All you need to do is “submit the fully completed, deliverable report on time”. Fully completed AS DEFINED BY Street Apes…not by the appraiser. You can submit the report on time but after they’ve made their typical 5 separate requests for addenda and comments (that you included in the original report) they will tell you that your “complete report” was late. $5 says they beat at least 75% of the appraisers out of the extra fee in this manner.
We all know Street Apes by now and how they operate.
I have a dream where the SL logo is a row of little link sausages with tire marks on them, picture perfect on some long stretch of desolate Nevada highway or something like that. Great insight Retired grumpy appraiser, great insight.
You’d better believe they’ll beat that fee. You see they’ll on one hand hold the lender to the payment of the spiff, and will on the other hand pocket the spiff with the normal routine where they stip the appraiser to death and then note the appraiser as not having complied with the terms. You can’t make this stuff up. Great insight indeed.
They need to change their name to StreetPIMPS instead!
RA, you guessed it! Here is another AMC bonus for dummies explanation!
From: RV Management <ValueitManagement@rels.info>
Date: 6/28/16 11:55 AM (GMT-05:00)
Subject: From Rels Valuation Mgmt: New Bonus Program
The purpose of this email is to make you aware of a newly created bonus process. This new process is rolling out on a limited basis within the next few days. When implemented, it will provide the opportunity to earn a bonus on select orders when all of the required criteria have been met.
If an order in your pipeline is selected for this process, we will notify you via email. The email will reference the specific order number, the potential bonus amount and the date that the completed appraisal report must be delivered by Rels to the lender in order to qualify for the bonus.
Because the payment of the bonus is contingent upon Rels delivering the completed appraisal report to the lender by the specified bonus due date, this involves more than the appraiser simply delivering the appraisal to us by a particular date. As such, payment of the bonus is contingent upon all of the following required criteria being completed in their entirety prior to the stated bonus due date:
Understanding that there are many steps and individuals involved in this process, the appraiser needs to deliver the appraisal report to Rels at least one or more business days prior to the stated bonus due date. This is important as getting the appraisal to us as soon as possible will improve the likelihood of the remaining required criteria being completed by the bonus due date and you successfully receiving the bonus compensation. Similarly, if there are any revisions and/or corrections that need to be addressed, the appraiser must complete them ASAP so as to improve the likelihood of the review process and delivery to the Lender being completed by Rels prior to the stated bonus due date.
If all of the required criteria have been met and the appraisal is delivered by Rels to the lender by the stated bonus due date, the bonus payment will be paid out to the appraiser separately from the actual appraisal fee. It will be paid on a bi-monthly basis while the fee for the appraisal itself will continue to be paid out twice-weekly.
By working together on these orders, we will continue to improve the level of service being provided to the lenders that we support.
Yep, they’re copying Solidifi’s performance program. Solidifi tried that, but was only giving the spiff for actual sales. So $500 base fee + 100 amc hassle fee + 100 quick turn time spiff. Sounds sort of reasonable. Still not enough to afford any help, but looking better. Oh wait Street Links…. I take it all back, every word of it. HA! When they drain your time with incompetent process, just charge more to make it worth it. A higher standard fee increase would have been much more commendable.
Streetlinks and Chase…..WOW! Two of the worst companies to deal with in the appraisal industry.
So let me get this article straight…. The government institution whom essentially answers and is subservient to the FED, is going to take action against lenders in the interests of stronger checks and balances systems and revitalization of the appraisal industry? LOL! You’re cracking me up right now. I think you’re dealing with one thoughtful individual whom will get shut down once the wigs learn about this. Likely this individual has already been marched into the managers office and reprimanded, also being shown this article published online here. IF C&R was going to be enforced, it would have been enforced a long time ago. What ever happened to the appraisal hotline anyways? You can’t make this stuff up. 10k/20k a day fines retroactive per instance is so big, nobody dares enforce it.
Part of the problem is that too many appraisers accept the lower fees. I recently quoted a fee of $525 and got a response from the AMC that their fee sheet only allowed a fee of $350. They further stated that they would have to remove me from their list if I wouldn’t accept their fees. My response was I understand being removed from your list, keep me in mind when you have work in the area. Two days later the appraisal was ordered at my requested fee.
I’m so glad I left this industry two years ago….what a joke having to deal with these pimps who still do nothing to add value to the system but suck away like leeches on the blood of ass busting appraisers. I left when I was 33 years old after fighting it out for 10 years. The leeches are now gone and the wounds have healed. I’m so much more happy now doing something that people value and look at me with envy. To the people who can get out, DO IT!!!…and don’t look back! Things will not change with Dodd Frank in place and with UAD here to stay the future is bleak for actual appraisers as the databases are being built, compliments of you and me, which will soon be used as the standard valuation tool to fund loans….mark my words!!!
Sure… But…. Those computers cannot compete with my logic. They are after all, still only computers. What are you doing now instead? I’m looking forward to some down time, and will probably get to roll some easy reo work for years to come if the market stalls again. Appraisers love to talk like this industry is driven by a slave master. Me, I’m currently sitting at home next to an open door, sun shining, fan blowing, coffee in hand, and you know what, I think I’ll take a break. Why? Because I’m independent and do what I want. Corruption is widespread although particularly apparent in real estate at times. None of us can escape the consequences of these issues, regardless of where you may work. Every individual action matters and the most important take away from real estate for most people, will be having learned about ethics in a much more detailed and complex way which will hopefully carry forward to new lines of work. Stay vigilant, and prioritize liberty and this country first, regardless of what line of work is chosen. Glad to hear you’re doing well.
Baggins….I understand what your saying however your “logic” will not compete with big bank lending institutions and their lobbying efforts going forward. Appraisers typically have that lone wolf mentality and can’t get together to save their lives, how do you expect them to get together and save their profession? I’ve always had a high ethics standard which has served me well in the appraisal profession and life in general, totally agree with you there. As of now, I’m currently a mobile marketing pro for one of the big auto manufacturers…..traveling the USA, meeting new people and getting to see all this beautiful country has to offer. The best part is I have over 20 weeks vacation per year…paid!!! So when I’m at home sitting on my porch sipping coffee for a three week break, I’m not worried when that next order will come through. And it affords me the time to do what I really want…trade stock market futures. It sounds like your one of the lucky few that doesn’t rely on Amc’s and volume work, good for you! However, 90% aren’t that lucky. If big lending can find a way to get rid of us, they will! Appraisers may be reduced to taking photos, commenting on condition, upgrades and taking measurements…that’s it. Enter that info in and valuation is automated from there. Does it really sound that far fetched?
AMCs use bidding process to gain the cheapest appraisals. Appraisers propagate the process by accepting low fees or participating in bidding.
WELLS FARGO GOES BIG AT VALUATION EXPO ~ Top story at AppraisalBuzz.com a.k.a AMCBuzzards
Hand you or I a $25,000,000,000 bailout check like they did Wells Fargo & Co. on 10/28/2008. Who couldn’t “go big” with that type of welfare check in hand?
Great response Finally Free, thank you. Per some of my other commentary, the mechanism by which lenders eliminate the need for checks and balances system, is the 98% LTV and reduced capitol reserve requirements. One has to have faith and confidence in the automated results and the ethics and motivations of the programmers and owners of the automated systems, to put any reasonable stock into those systems in the first place. There is constant conflict of interest with AVM modeling, and there is no effective solution as long as GSE’s continue to back the majority of all loans, repackage, and resell. Unlike the open trading market, the persons initiating the product to be traded in real estate, have no skin in the game.
Seeking update on this one. Were my predictions true that upper management would shut this down before it gained any traction?
Knew it, no update. Figures.
Calling all Appraisers,
The FDIC sincerely wants to hear from Appraisers!! I forgot to add in the Bank’s name on my complaint and below is the letter I received from the FDIC wanting the names.
They want to hear about everything that diminishes Appraiser Independence, Public Trust and Customary and Reasonable Fees. This includes but is not limited to low ball fees that the AMC forces you to sign their agreement letter stating that the $245.00 fee is Customary and Reasonable. Heavens forbid you try to negotiate a real contract or Fee due to complexity only to find out that the order has removed from your queue and now you don’t hear from the AMC for months.
The FDIC also wants to hear about Price Fixing by sending blast e-mails and text messages only to have the fastest trigger finger to get the assignment of a whopping $238, $240 or $245 fee.
The FDIC wants to hear about the AMC’s that blasts orders to a massive distribution list of Appraisers for BIDS, and you guessed it! The lowest bidder receives the order.
Labor Day is Sept. 5th, won’t you Please consider contacting FDIC’s either by website or telephone and report these violations!
Customer Assistance Form
FDIC Consumer Response Center
1100 Walnut Street, Box #11
Kansas City, MO 64106
(Monday – Friday 8:00 am to 8:00 pm EST)
703-812-1020 (Fax number)
I have corrected my omission and sent them a revision with the Banks Name, Address and phone number.