Don’t buy into the cover story about why a firewall was implemented. The sponge firewall does precisly what it was designed to do (absorb appraisal fees); and with remarkable efficiency.

If only Trump could find a way to build his Mexican Wall so that generates billions every year.

And that ‘firewall’ is wholly inadequate.  The idea that there will be decreased risk, rather than more risk, in this new system is illogical at best.  It’s obvious to everyone who dares to look at this point, that an unlicensed amc or even non-amc distribution clerk, is not an equivalent substitute for an individually licensed person.  At least when the MB’s would pressure appraisers within the realms of direct distribution, the appraiser could make a complaint against that individuals license.  Such an action is no longer possible in the amc group business licensing realm.  Appraisers are individuals, and are subsequently inadequately positioned as a constant, and they dare not try to go against a corporation.  Only if Erin Brockovich herself were to serve each and every individual appraiser whom would seek to complain against corporate amc entities, would this system even have a remote chance of being sustainable and fair for the long haul.  An individual earnings stressed appraiser vs the corporate amc entity whom stressed the appraisers earnings in the first place….  David vs Goliath, and it’s no surprise the amc industry is boasting about great regulatory positioning and success.  Appraisers are definitely afraid to lodge complaints against them at the state level.  I know I am.  The one time I called and complained, I was sure that the amc rep, whom sat on the appraiser regulatory board, had probably called the amc manager whom I was considering filing a complaint against.  Even though the amc manager had already made a clear statement they would not pay for the report they had already received, and I had no further contact with them prior to calling someone at the state, a simple tentative call to the state, resulted in immediate payment….  Coincidence?  Maybe, but probably not.  And here is the chill factor many appraisers may be blissfully unaware of;  The amc rep on your state board, may coincidentally be employed by the same amc whom you may seek to complain against….  Food for thought.

An additional point to that regard to ‘anon 4 now’;  If borrowers pay the same cost for appraisal services, but the actual service cost is less than they actually paid, wouldn’t the surplus qualify as a junk fee, under existing regulatory stature?  It is supposed to be illegal to pump up loan service charges with variable scaling, while never returning any cost savings from reduced cost of appraisal services, back to the borrowing consumer.  aka;  unearned fees. /  For your personal comments, well, I’ll tell you like the rest of the appraisers;  Know Your Client.  Some clients use the systems you speak of, but others do not.  I roll with companies whom don’t cherry pick to staff, and instead run on limited sized, well vetted approved panels, with near rotational distribution, or it’s equivalent.  These days I’m the cherry picker, and I don’t even have to try.  The difference between me and staff is this; if a tough one comes around, I have to take it or risk losing the client relationship, and I get the full $450+ fee every time regardless.  So you win some, you lose some, but on the over all balance, because there is no corporate entity or owner whom capitalizes on any left over surplus, the compensation per order remains reasonable and fair, with a steady supply of work, to boot.  If you’re working with anyone other than that client type, it’s time to either diversify away from ML work, or market more to get better positioning.  You know what they say;  a drop in the bucket.  For every solicitation you put forth to lenders directly, for every amc order you upcharge for the additional bureaucratic overlay, and such, you have made a difference and planted the seed of change.  “The world is what we make of it, and the only thing necessary for injustice to triumph, is for good men and women to do nothing.”  Or something to that point….  You pick your poison in this industry, but you are never forced to consume what may be served to you that particular day or with that particular order.  The benefits of the free market principals and principals of substitution, is a principal which applies to all, not just to the privileged.

AVMs are a problem.

I agree it is basic. Wrong IS wrong.

That’s the whole point of having a firewall between loan production staff and administrative processing staff (including appraisal ordering). WHY would an AMC not be allowed to have their owns staff do an assignment? Are their appraisers more (or less) susceptible to pressure than you and I are?

Your second question is (I think) the real issue. National “Appraisal” Companies ARE marketing themselves as both AMCs and appraisers. Some are franchise shops; some are panel referrals in the true sense of an AMC and some are whatever they can pretend to be that enables them to enhance THEIR position in the “assembly line appraisal industry”.

These would be the same ones that are trying to get AQB to modify entry level requirements; and lenders to modify inspection requirements so trainees can inspect. Off how the AMC lobbyists support these specific appraiser factories proposals isn’t it? AMC lobby groups SUPPORTING traditionally sub par fee paying appraisal mills.

What could go wrong?

Benjamin, respectfully that isn’t the point. The fact that a state regulatory agency or association of regulators can be so wrong on such a basic issue is the point.

How many appraisers were pressured or coerced into signing consent settlements requiring either fines and or remedial education when it was the regulators themselves that needed the remedial education?

I think more importantly, these larger AMCs are controlling the work flow in local markets.  At least a majority of the largest lenders use AMC’s, and the majority of the larger AMC’s are currently using, have used, or are considering the use of staff appraisers.  I was one of these AMC staff appraisers many years ago, and have recently spoken with another AMC regarding their staff appraiser position.  This is how it works – incoming orders from lenders are first offered to the staff appraisers, who are “encouraged” to select the “straight forward/cookie cutter” assignments.  Those assignments not taken by staff appraisers due to complexity, time requirements, expanded scope of work…, are then offered to the independent panel appraisers.  When volume is lower, staff appraisers are “encouraged” to accept more complex assignments.

Basically, this creates the situation where an appraiser has to work for an AMC as an employee in order to get the majority of lender work, or scramble for table scraps/leftovers.  Is this not the very definition of Restraint of Trade?

Edited to Add: Turn Times ARE against Appraiser Independence.