The Evil Octopus

MISMO Blueprint... The Evil Octopus - AppraisersBlogsAppraisers, it’s not paranoia when ‘the bastards’ really are out to get you (end us as a profession). …Find each octopus and how they relate to our jobs. Look at MISMO Directors list…

An Open Letter to Appraisers: Residential & Commercial

This started as a response to a blog post by a respected appraiser concerning the influence of AMCs. During drafting it was clear that trying to explain AMCs was only part of the bigger struggles we face today.

Picture a violent “all in” three-way gang fight among Octopi. Say a dozen on each side. That’s 36 Octopi x 8 tentacles each or 288 individual tentacles. Now amidst tentacles swinging in 288 different directions, find the single octopus that has a tentacle labeled “Appraisal Management Company.” Our problems are more complicated that just that one tentacle, but they can be hard to identify.

“It” (the AMC) started as major national appraisal intrusion by title Insurance companies. Pre-2009 it was largely LSI (Lenders Services) out of Coraopolis PA; and ATM out of San Diego, CA (Appraisal Title Management; as a rebellion against LSI by some of its original founders, and leaders). THIS is where AMC pricing wars started circa 1993.

There are other AMCs claiming to have been around since the 1970’s but they were not then as widely known. REL’s and Landsafe were considered ‘in-house divisions’ originally, rather than AMCs.

My point is most of these were NOT small, independent startups. They were extremely deep pocket national corporations with the ability to capture (sometimes dictate) receipt of all a major banks appraisal orders.

I was Chief Appraiser for one in the very early 1990’s (with only 5 years appraisal experience, so you get an idea of the limited expertise and background they typically hire).

The NUMBER ONE and overriding concern was net profitability. This was above ALL other considerations. Appraisal standards and accepted processes were something to be overcome or sidestepped whenever they impacted profitability or speed of service.

Most title companies became disenchanted with owning their own appraisal divisions (for HELOCS) due to high overhead and their own behind the scenes low-price-fixing. They started subcontracting to non-appraiser ‘appraisal coordinators’ that were only marginally encumbered by standards.

By 2009 Cuomo and (it is alleged) select title insurers, saw an opportunity to capture ALL appraisal business across America. Hence HVCC.

This is when and why all the ‘little guys’ like appraiser owned AMCs popped up. Initially in self-preservation appraisers formed them to capture otherwise lost work for themselves.

Then came the inevitable business opportunists. People with great organizational and sales skills; no appraisal experience, limited morals, and flexible integrity. Appraisal fees and quality plummeted.

“With reasonable profit, comes healthy competition. With excessive profit, comes ruinous competition.” Enter the software hucksters.

Software con artists had sniffed around the periphery of appraisal for years. The ONLY thing stopping them from taking over completely with faster and cheaper services were those pesky appraiser standards; and human imperfections that make real estate markets unique.

In this environment we also had the normal and natural desire of mortgage brokers to ‘get deals done.’ NAR also wanted to get deals done. NAHB wanted to get deals done. Title insurance companies (that now owned damn near all aspects of a transaction from home warranty companies, to realtors, to escrow, to loan origination and even servicing companies) also wanted to ‘get deals done.’

The only thing stopping them was FIRREA and to a limited extent, Dodd-Frank; coupled with damned uncooperative appraisers.

Go to the site and look up Opportunities for Collaboration 2018 or review embedded pdf below.

Thought UAD was only for SFRs? Think again. See below. Next, they want to demand reform to narratives to get rid of all those pesky graphs to facilitate data scraping. NOT my interpretation – it’s MISMO’s opportunities list.

Find each octopus and how they relate to our jobs. Look at MISMO Directors list; The Appraisal Foundation Sponsors, & FNMA participation. Don’t skip over the title insurance and service companies. Pay attention to Corelamode’s former partners ‘First American’ and all their subsidiaries. Despite FTC concerns, a systemic-monopoly was created by conspiracy & collusion, if not via formal corporate ownership.

Do you think changes in definitions of what appraisals are (were) was accidental or related to APPRAISER needs? Preservation of the public trust?

TAF HAD to show a way that “Evaluations” could be USPAP compliant; then definitions had to be modified or at least clouded so that HYBRIDS could be slipped in as variants of evaluations which already had exceptions for lenders… which brings us to today where the fraudsters are claiming “Hybrids ARE appraisals.”

Listen to the Dustin Harris podcast below (you may want to skip the first 12 minutes intro). Ernie D. said he pioneered alternative appraisals back in 2006,… that were fully state and federal (USPAP) compliant which is odd, because most states old legal language didn’t allow non USPAP compliant appraisals in ’06. Carefully pay attention to his words and dates. They give a lot of insight into how the horrible-hybrid came into existence.

Note: Some hybrid-hucksters are the same fraudsters that used to tout ZAIO. Look them up.

Why are substandard appraisal hybrids being promoted so ‘enthusiastically, when MISMO eventually intends to kill them off too? Their stated goal is fully automated appraisal. This applies to residential AND commercial.

Our profession is being deliberately sacrificed so all meaningful human protections are eliminated & international and domestic investors will have no alternative other than to accept fully automated ‘valuations.’

Also on the MISMO ‘collaboration agenda’ is elimination of individual state mortgage, insurance and associated consumer protection laws. States rights and individual states perceptions of necessary consumer and investor laws will have to give way to a one size fits all process for the convenience of MISMO only.

To get an idea of how far the tentacles of huge title companies reach, investigate First American (of PACEPro infamy), that used to be sisters with Corelamode’s. One bought ACI and the other bought alamode.

Merely calling them ‘middle men’ isn’t enough. They are the bookends AND the middle.

Appraisers, it’s not paranoia when ‘the bastards’ really are out to get you (end us as a profession).

They want and need to keep appraisals; or at least something fully automated that can be called an appraisal.

It’s just the appraisers performing them that have become undesirable. Look to MISMO for the blueprint of how that will come about.

We are not going to overcome this at a state by state level folks. If your professional peer organization; society or institute is not fighting for you, then join the American Guild of Appraisers! We are the only national organization currently fighting for individual appraisers on a daily basis.

We cordially invite and encourage the older, well established professional associations to investigate the MISMO agendas and become more involved in preserving professional appraisers.

The same invitation is extended to the States Coalitions and their national association of coalitions.

Aside from the Appraisal Institute, we are the only national organization willing to call out The Appraisal Foundation; and individual state regulators misdeeds. Its time for all organizations to start holding them accountable for their actions!

Michael F. Ford
American Guild of Appraisers
Chairman NAPRC /V.P. Special Projects
9744 Wilshire Blvd. CCMB Suite #203
Beverly Hills, CA 90212

Mobile (714) 366-9404
AGA Office (301) 377-0099 or

For Membership information contact

Note: The National Appraiser Peer Review Committee is a duly authorized professional peer review committee of the American Guild of Appraisers.

Michael Ford
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Michael Ford

Michael Ford

Over 28 years appraising all property types and interests, in Southern California real estate. VP/Chairman National Appraiser Peer Review Committee, American Guild of Appraisers, #44OPEIU/AFL-CIO. - Michael Ford on e-AppraisersDirectory

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4 Responses

  1. Avatar Diana N. CREA,CRA,GRI says:

    Mike, excellent as always and what I have been saying ever since AMC’s came into being. It’s  a sad commentary on our profession which appears to be dying faster than I thought it would.

  2. Avatar Eric Kennedy says:

    Thanks Mike.  Hope you are feeling better.

  3. Rick Nielson on Facebook Rick Nielson on Facebook says:


  4. Baggins Baggins says:

    Is it too much to ask to want to maintain traditional checks and balances systems? As a consumer of any product, I always do my homework and never trust the company who’s selling me a product outright without additional independent research or comparative value information.

    Will appraisal turn into something akin to the windows operating systems? Appraisal avm 1.0, 2.0, 5.0 appraisal vista, appraisal wonder, and so on, and so forth. If the tech guys have anything to say about it, well it’s clear how they’ve mismanaged other systems with an infinite never ending stream of technical updates to keep themselves prioritized and in business. Always with a ‘new’ product, in slightly different packaging. “Never 10”

    Regulators are fooling themselves if they think tech companies are anywhere near as simple to regulate and provide oversight for as human appraisers are. Unless the regulators know the details of coding and could develop those systems themselves, they would be wise to support the traditional appraisal valuation model instead. We are an essential element in the lending world for a sensible application of checks and balances systems.


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The Evil Octopus

by Michael Ford time to read: 5 min