NAR Calls Out Unregulated Middlemen: A Wake-Up Call for FHFA
In a housing market that demands clarity, Appraisal Management Companies, or AMCs, continue to operate like the magician’s assistant, always present, rarely transparent, and somehow still part of the act. But the National Association of REALTORS® (NAR) just handed the Federal Housing Finance Agency (FHFA) a letter that reads less like a polite memo and more like a velvet-gloved slap. It’s a bold call to rein in AMC antics and restore dignity to the appraisers who keep the system honest.
Appraisers are the unsung heroes of home finance. They’re the ones who walk into a property, see past the granite countertops and Instagram staging, and deliver a valuation rooted in reality. Yet, despite their expertise, they’re often treated like interchangeable parts in a machine run by AMCs, companies that, according to NAR, operate with weak oversight, fuzzy fee structures, and a flair for quiet retaliation. The letter points to a disturbing trend: appraisers being dropped from AMC panels without notice, explanation, or even a courtesy ghost emoji. Some AMCs don’t bother with formal removal; they just stop sending assignments, letting silence do the dirty work. It’s not just unprofessional, it’s a regulatory violation dressed up as business as usual, enabled by unregulated middlemen who thrive on opacity.
And speaking of silence, whistleblowers in the appraisal world are often forced to whisper behind closed doors, fearing that speaking up will mean being shut out. NAR wants that to change. The letter calls for real protections, not just vague assurances, and a complaint process that doesn’t feel like shouting into the void. Because when appraisers are punished for pointing out bad behavior, the entire system suffers.
Then there’s the fee fiasco. Ever tried decoding the appraisal charge on a closing disclosure? It’s like trying to figure out how much of your restaurant bill went to the chef versus the guy who handed you the menu. AMCs bundle their cut with the appraiser’s fee, leaving consumers in the dark and appraisers underpaid. NAR wants those fees unbundled and tracked through the new UAD 3.6 system, which could finally shine a light on who’s getting paid and who’s getting played.
The letter doesn’t stop at finger-pointing. It urges FHFA and the GSEs to treat AMCs with the same scrutiny they apply to mortgage insurers and seller servicers. It’s a call for fairness, transparency, and a little common sense. Appraisers aren’t asking for a parade. They’re asking for clear communication, fair compensation, and the freedom to do their jobs without AMC interference. If AMCs can’t meet that standard, maybe it’s time regulators stopped treating them like essential middlemen and started treating them like the unregulated middlemen they’ve become.
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- NAR Calls Out Unregulated Middlemen: A Wake-Up Call for FHFA - October 2, 2025
Classless Valuation
https://appraisersblogs.com/uncovering-flaws-in-fha-appraisal-n-loan-review-process/#google_vignette
The AMC’s are sending out quotes for potential orders, which assures the cheapest appraiser (not the most competent) will receive the order. I appraise some of the highest real estate here in south Florida. A 20+ million dollar home would command a $1,200 to $2,000 fee from a independent appraiser. The AMC will send the order to a, appraiser who is willing to do the job for $600. The borrower will receive a report that reflects a low fee (not a comprehensive or well put together report). I have been able to circumvent the management company and start going directly to the lender and the borrower! I get paid directly and receive reasonable and customary fees, and the borrower gets comprehensive report that they paid for. No Need for AMC’s anymore, the are killing our industry.
The AMC model where homeowners pay $900 for an appraisal, the AMC keeps $500 to send a simple email. What a deal! However, Mr or Mrs Appraiser, do no include an invoice with the appraisal as the homeowner may actually see what the AMC is gouging them for.
Matthew Ellis State it in the body of the report and PDF lock the report. Some states have regs that they cannot make you remove it. Mine is one of them.
Kevin Hescock so is mine.
Kevin Hescock Lori Alexandra that is still insufficient. Invoice should be included in all lending appraisals as page 1. No one read the report. Appraisers also need to tell borrowers where in the report to look for the fee, and how to report it, and what lawsuits are taking place to fight this.
Donna Halfpenny people see mine. I put asterisks and larger font in my report.
Lori Alexandra how many borrowers actually read the report?? 1 in 100
Donna Halfpenny believe it or not I’ve had quite a few call or email me in the past wanting an explanation. I had to refer them back to the AMC. We stopped working with them some time ago but it was aggravating.
The only fee they see is the “Appraisal Fee” on their loan docs – and they are PO’d thinking that YOU got paid that much.
Unless it is a page 1 invoice NOBODY will ever see your disclosure
The problem is that the outstanding fee has already been paid and by the time the buyer or anyone who see’s the invoice after the report is finished doesn’t really care because they are about to close and they don’t want to have a speed bump at this point. The fee’s should be separated. The appraiser charges and collects his/her fee and the AMC charges and collect their fee. Then we don’t have to wait 30 days to get paid
Yes. What’s really going on is the amc industry has imposed parity pricing upon all appraisal costs which flow through their system. Because of improperly co mingled fees, what ends up happening is when an appraisal service costs less, the amc pockets the difference and the consumer never saves a dime. Then on the other side in more difficult to service or higher cost of service situations, when an appraiser charges more, often the amc does not bill that to the consumer but rather takes the difference from their group funds pool (from the excess of consumers whom did not save.)
So we end up with some people subsidizing the costs for other people’s appraisal service. There is a top heavy bureaucracy within the amc management structure. An imbalanced system. Such a situation is easily corrected by simply tying 100% of the consumers appraisal fee, to the same 100% compensation which flows directly to the appraiser completing the service.
This is the cost plus amc billing argument. The cost of the appraisal, directly charged to the consumer and directly paid to the appraiser in full. Amc servicing charges in addition to the actual appraisal service fee. Two distinctly separate charges, for two distinctly different services.
The heart of the issue is that lenders use amc’s as this causes the appraisers to end up paying for the lenders side processing and handling costs of dealing with the appraisal. Something similar as having an employee pay directly out of their own pocket, to fund their own manager and bosses weekly paycheck. The costs of dealing with appraisal handling are currently extremely excessive and unnecessary. Managing the process of sending appraisal orders to appraisers used to be an incorporated duty of the mortgage origination departments, and appraisal review used to be an incorporated duty of the lenders whom managed their own or partner origination departments.
Amc’s have turned into lender profit centers. Amc’s were supposed to function as separation from loan production. Instead amc’s have become loan production themselves. The $12 billion or more of unearned junk fee raking by the amc industry represents an excess profit taking from what otherwise should have been a relatively low cost process of simply ordering appraisals from appraisers, having the consumer pay for the appraisal, and the lender writing off the cost of processing appraisals with one of their standard pay scale in house employees.
There is simply no valid justification for amc executives to earn payscales which are among the top pay among the entire lending services industry. They’re not actually doing anything of substance or value which is not readily replaceable by a lenders own in house employees.
Kevin Hescock it should be on the invoice and not buried In reports
I find it interesting that NAR is blaming everything on AMCs and claiming they are unregulated. The reality is, Appraisers and AMCs are both highly regulated; it is the states that are failing to do the oversight. The Realtors are the ones who apply the pressure. For example, brokers get their business from realtors, so they market them and wine and dine them. When the realtor doesn’t get the value or is annoyed with the conditions outlined in the appraisal, they pressure the broker or originator by threatening to take their business elsewhere…hence where the pressure begins. They should be working on their client’s behalf, but they do not because they are commissioned, as is the originator or broker. Good luck reporting the bad behavior, because no one cares, and they have no oversight. Both appraisers and AMCs can be reported to the state board, generally right online. It is usually an easy process, but it depends on the state.
Am I saying the AMCs as a whole are not an issue, definitely not. The bigger they are, usually the worse the pay and they really do not add much value, if at all. However, there are a handful of really good AMCs that have appraisers on staff, and actually do add value. They are honest about their fees and clearly disclose their “management” fee on each assignment. They research the assignment before they send it to their appraisers and actually read the purchase agreement before they even assign an order.
The other issue that no one seems to want to address is tech fees. They have gotten absolutely out of control and in some cases can be as high as $60 per assignment, simply for pushing an order through. Some of these platforms even have monthly fees on top of the upload per file fee.
If real change is ever going to happen, all the good players need to actually come together and start talking about real change that has a positive impact on all of us.
I have been in the appraisal field for 28 years and we were getting along just fine before these scamming entities came around. Not they are “offering” fee’s that are less than what I was charging in 25 years ago. They have done NOTHING to help the industry only made it harder to communicate with the client. I could go on for miles about the crap they’ve caused!
Its outright price fixing.
REALTORS® believe that weak oversight and enforcement of AMCs’ requirement to provide rationale for an appraiser’s removal or reduced usage on a panel result in violations of appraisal independence and that appraisers should have a viable vehicle to lodge complaints with adequate whistle blower protections.
I think they’re referring to a critical component of HVCC regulation which was mysteriously left out of DF Reg Z Valuation Independence. / Lenders must notify appraisers in writing why they were removed from panel or effective rotation.
There is no solution, so long as there are improperly co mingled amc and appraiser fees. The fees must be wholly separated in order to remove the constant motivation for amc’s to drive consumers fees up, drive appraiser vendor fees down, and pocket the difference. Disclosure of fee distribution will mean nothing.
Furthermore this improperly co mingled fee is among the core reasons why amc’s pretend to ‘grade appraiser performance’. In doing so, the amc can always come up with some reason why one appraiser ‘performed’ at a variable lower level than the next, and in doing so has free reign to remove them from the panel, take them down ‘tier ratings’, or silently delist and blacklist the appraiser. Not surprisingly, the appraisers whom provide a greater thing of value to the amc, via the lower appraisal fee which increases amc’s profit, those appraisers are top tier top performers and are sent a disproportionate share of assignments. Clear violations of the USPAP management rule, ongoing for over two decades already. It’s a minor miracle the amc’s whom run TAF have not demanded the removal of that ethical provision during their continual and unnecessary bi annual rewrite of ‘ethics’ in order to secure another round of pay to play overpriced ethics book sales.
There is simply no way to make a classic approved panel of appraisers a staple and a stable consideration, unless there are several key criteria met; 1. Fairly distributed work volume to all appraisers on panel in a rotational basis (faster one completes the work, faster they’re back in line for the next order, but there is no penalty for taking longer or no fear of delisting, not receiving work in the future, if an appraiser is not as proficient as the next, etc.) 2. A stable constant base fee for all appraisers on panel in any given area. (eliminating the profitable reasoning to send disproportionate work to only the minority body of appraisers whom cut the most corners, outsource the most services, in order to reward the amc with a higher profit margin for handling those orders. Stops amc’s from sending disproportionate volume to only discount appraisers, an activity which has resulted in three out of four appraisers nationally refusing to work with amc’s.) 3. The appraiser panel must be managed by a licensed appraiser and non appraisers should be prohibited from influencing any panel decision. For far too long the purposeful use of non appraisers in these positions has shielded lenders and amc’s from appropriate two way accountability.
Wow, after fourty thousand appraiser licensees were driven out of the industry, another hundred thousand never materialized as the amc industry raked twelve billion dollars out of the hands of appraisers, and of the remaining seventy thousand appraisers left, over three quarters of them having boycotted the amc industry entirely; Someone at NAR paid attention and wrote a letter. Won’t do any good because they still don’t understand the issue and over half of the appraisers even still in the GSE servicing space are going to quit over the forced imposition of the 3.6 UAD form which appraisers never wanted and never asked for in the first place. / Meanwhile appraisers whom dared to stand up to the amc industry have long since been placed on permanent do not use blacklists which they share freely among each other through every major digital appraisal assignment platform in existence. Nobody will ever do anything about that. Except maybe demand a complete reset and make such use of lists or retention of historical performance data a felony. A substantial portion of the amc executives belong in federal prison anyways.
Missing the IVPI proposal yet?
https://www.workingre.com/wp-content/uploads/2013/08/IVPI-Proposalfinal.pdf
I always enjoy reading your comments and insight; they are invaluable.
Thanks. The wild part about that particular comment, I typed it up in ten minutes or less. Basically because it’s the same argument many appraisers have made for well over a decade.
We need knowledgeable and highly experienced appraisers like you and many others to spearhead a campaign that actually damages the AMC’s. The more solid appraisers can cooperate and form a bond, the more serious damage they may cause…More bandwidth, better results!
Thanks. As usual I firmly believe answers lie in better education. Join a new conversational area if you’d like, where the amc appraisers and amc people themselves hang out. It’s a mad house, but still an interesting mix of people.
https://www.reddit.com/r/appraisal/
I’ve worked with a local Credit Union which has 35 branches (in my county of coverage) for 10 years and every year they do so called “studies” to determine appraisal fees. Over these 10 years they have seen fit to raise the appraisal fee only $25. In their defense, I don’t blame them. Meaning, they are not comparing the cost of an appraisal as shown in the loan docs from their competition to determine a wage, but rather they are competing against the split offered to the appraiser post AMC which most of their competition uses.
The result as we all know means there is no free market, no competition, and as a result we operate in a broken system where 12 billion has been redistributed to a powerful few.
Sorry Dustin, you were wrong in Appraisersblog in 2018 https://appraisersblogs.com/zero-raise-appraisal-fees-unchanged/ and if I cared to give I guess today I think your answerer would still be the same.
Seek the truth.
Research, support, and join ARCC!
They are the ones with most of the research on fees and regulations.
What a very well written article. I hope it doesn’t fall on deaf ears. The AMC process is predatory and harms the consumer AND the appraiser. Their service is absolutely unnecessary and only adds fees, days to weeks of lost time in appraisal completion due to ‘made up to verify a reason for my existence’ so-called revision requests, and the obvious, millions of dollars a year out of consumers’ pockets.
I ask over and over why can’t the AMC’s be turned on their heads and let the states develop a system similar to the VA that pieces together a fair and honest rotation. These major players want the work done by second-hand hacks and rock bottom fees in record time, knowing that haste makes waste, while continuing to point towards UAD 3.6 as another step towards full AI and less humanity. So many AMCs just want money off the blood, sweat, and tears of the hard-working appraiser, and the silent killer has been happening for far too long ! You don’t have to be blackballed, banned, or officially removed from the panel/rotation…they just send you nothing and continue to tell you that they’ll keep you in mind or that they’re slow with assignments. To hell with all AMC’s!
See the IVPI proposal link above.
The whole idea behind the AMC was to have a middleman between the lender and the appraiser, however, now the lenders own the AMCs and you get the same pressires from the AMCs that you used to get from the lenders only with less pay!!
Does anyone imagine that Bill Pulte has any interest in the fees of appraisers? He’s a homebuilding and political hack. As a homebuilder, I imagine he’d like to eliminate any fees in the home buying process that he can. That means AVMs. As a political hack, he’s busy combing the mortgage records of everyone Trump tells him to.
The entire appraisal industry is in turmoil; AMC’s getting away with fee gouging, removal of appraisers, PDC’s posing as appraisers, hybrid appraisals, AVM’s, the list goes on and on. This is an attempt for Fannie/Freddie to get rid of the unbiased appraiser altogether; if the GSE’s don’t write a mortgage they don’t make any money, plain and simple. We as appraisers are standing in their way and they want us OUT…the realtors aren’t much better, they are strictly commission based so if we “kill” a deal they don’t get paid. I don’t see anything changing unless an “executive order” goes into effect stating that for each and every lending transaction an actual in-person appraisal is needed, no AVM’s, no PDC’s, no hybrids. Probably not going to happen, it’s a shame though as the housing/mortgage industry is one of the biggest in the country.
Yes. Lower the ‘demins’ lending standard back to original levels, I think that was $150k or less. Roll back waiver programs to previous or lower levels, per the previous FHFA directors advisement. Eliminate pdc service all together and promote the appraisal industry instead of diminishing the work load, bring back licensee required inspections only. Eliminate the recent ‘no live comps pictures’ required rule. Totally trash the 3.6 UAD program and just add a required page or two like they did with the MC form if they want additional information.
It’s already game over for gse appraisers in the consumer protection space. Most appraisers just have not gotten the memo yet. They’re living under this delusion there is going to be a refinance boom and the pending appraisal modernization act will mean business as usual.
I’m not looking forward to the “new and improved” sic 3.6 form, but I have to adapt. I specialize in very rural and oddball properties so the PDC’s can’t afford to do them, avm’s don’t work either, and I’m a member in 5 mls systems for comps as I cover a vast geographic market area. The rhetoric is over, this profession is dying slowly but surely, I’m hoping to last another 5 years until retirement… hopeful anyway.
I wish he did not harp on lodging complaints against AMCs or showing the AMC fee separate but instead discussed more about how they add no value to the transaction other than to slow the process and cost the consumer more money. Discuss how some of the AMCs are quite frankly getting too big and dominating the market, how they are hiring staff appraisers which defeats the whole purpose of the AMC model. Make sure lenders know they are not REQUIRED to use an AMC, many still they think they are to be compliant.
I remember the good old days in 1978 in small town Alaska. Lenders would take me to lunch occasionally and would only hire competent, honest appraisers. Back then, my $50k annual personal income was reported by the Wall Street Journal to be in the top 1% of all USA income earners. My have things changed for the worst.
How many appraisers will up their fees for 3.6? Many of the same people who
Complain here never upped their fees when MC form came out in 2009. I still get blasted at least 10 $275 orders a day, I don’t even respond since Im not working for that and paying taxes on that. McDonald’s sounds better. I love hearing about all the hard chargers who can’t wait for 3.6, but when you can’t get your report uploaded because the software is a mess with the QC, you’re going to be banging your head against the wall! Me I’m going to sit back and watch how this 💩 show plays out!
Took them long enough to defend us but glad they have. Fannie has helped with this toxic AMC culture
cash at the door…and send the amc a 25 dollar finders fee