The Shadowy AMC Fees Draining Billions from Homebuyers
The hidden costs of appraisal management companies (AMCs) in the real estate industry have faced growing scrutiny, as highlighted by a recent Business Insider article titled “The Hidden Middleman who cost homebuyers $12 billion dollars and counting.” The article examines the opaque practices of AMCs, which frequently charge exorbitant fees that can exceed the amount paid to the appraiser. As highlighted by former Appraisal Institute CEO Cindy Chance, this issue has faced significant resistance from entrenched interests, mirroring the challenges faced in other industries such as the pharmacy benefit manager (PBM) sector, which ultimately led to an FTC investigation.
The Appraisal Regulation Compliance Council (ARCC), co-founded by Josh Tucker, has meticulously collected evidence of this fee disparity, revealing instances where AMCs like Class Valuation, Clear Capital, Solidifi, and Nations Valuation Services have charged fees that match or exceed the appraiser’s compensation. In one striking example, an appraisal managed by Solidifi for a single-family home in California listed the appraiser’s fee as $375, while the AMC’s fee was a staggering $725. Estimates suggest that AMCs could have charged consumers approximately $12.3 billion over a five-year period, with Solidifi reporting margins of up to 28% after subtracting appraiser payments and other transaction costs. While AMCs argue that their fees are justified by the additional services they provide, such as quality control, a 2018 Federal Housing Finance Agency working paper found no clear evidence of systematic quality differences between AMC and non-AMC appraisals.
The solution seems simple: require lenders to disclose AMCs’ fees clearly to consumers, allowing them to make informed decisions about the fairness of the charges. Some states already mandate this disclosure, but there is no federal requirement in place. The Consumer Financial Protection Bureau has the authority to require this disclosure under the Dodd-Frank Act but decided against it in 2013, citing concerns about information overload for consumers. Industry leaders argue that this decision was a mistake and has allowed AMCs to abuse the system, reaping significant financial benefits at the expense of consumers and lenders. As Tucker aptly puts it, “We have a captured industry where these middlemen get to kind of do whatever they want.” It is time for regulators and industry stakeholders to take action and ensure that the appraisal process is transparent, fair, and serves the best interests of homebuyers.
- Appraisers Freed from DEI Propaganda - January 23, 2025
- The Shadowy AMC Fees Draining Billions from Homebuyers - January 9, 2025
- Appraisal Industry Outlook Under Trump Administration - January 6, 2025
Fraud
https://appraisersblogs.com/uncovering-flaws-in-fha-appraisal-n-loan-review-process/#comments
Thanks for giving this more light!
Thank you Josh Tucker for your efforts over the past few years, amazing effort! Hopefully the media will cover this with the same ‘appraisal bias’ rigor
And why would anyone with half a brain believe FHFA? They have an agenda. Everyone needs to see through the trash.
Why does the author seemed shocked that, “in California listed the appraiser’s fee as $375, while the AMC’s fee was a staggering $725”. THIS HAPPENS EVER DAY IN CALIFORNIA. Just yesterday (from NVS), an appraiser friend of mine received an order for $275 for a property located at 4055 Bermuda Dunes Pl, Bonita, CA 91902 (+/- 1.8 million / 6 Br, 5 Ba, 3,866 sf, etc.). I would bet a Coke that the appraisal fee paid by the borrower was at least $1,000 ($725 take for the AMC).
Considering CA has around 12% of the countries population, running the numbers at $725 per AMC take means huge undisclosed profits.
Seek the truth.
I do not answer any amc that offers me a ridiculous fee. If I do not get my fee i do not accept the engagement. I do not negotiate my fee. I wish that we could collect our fees at the door or in advance as I do on 98% of non amc orders.
Bill
Get ALL the information on that please!!
Pat, what mechanisms are available to force a complete audit of the amc industry and the lenders data, for their engagement with amcs? Does that fall under SEC? OCC? Just get some appraisers together and sign up with all the amc companies, if one is licensed and insured, they’ll put appraisers on panel. Watch the data come in on autopilot. If lawyers become involved, appraisers whom do not work with amc’s should also be included, as we have been denied right to work under ethically acceptable terms.
If a lender is requiring an AMC service than the lender needs to be paying for that service not the consumer. Period
This is how it USED to be until the amc’s started figuring you they could just skim the appraisal fee and tack on their whatever charge on to the borrower. Lender let them do it. We can thank HCVV and the like for this.
$Billions in overcharges ?? Seems that borrowers and Independent Appraisers may be owed some Reparations 😉 Just dreaming out loud…
Not only that think about the orders that went to the appraiser with the cheaper fee from another city or less competent. I can only imagine some cases where there is a case for disservice directly caused by the AMC
JW- This is the Colorado Front Range. From Ft Collins to Pueblo it’s still the wild west. I’ve reviewed appraisals with full 1004 fees for $240 – and be located 80+ miles away. VA still sends Denver metro area appraisers all over the state, which screws over local appraisers work volume.
The AMC model is broken, and the gold standard of appraisal (VA) is now typical inefficient gov’t bureaucratic bloat.
And that is just over the last 5 years! This has been going on (on a massive scale) for 16 years now.
We can call it whatever we want and it is sad that with all the in your face evidence that the management companies are allowed to continue on the path of screwing the consumer, everybodies ass is on fire to come after the appraiser for trumped up charges that have no substance. This is just additional evidence there is an agenda to take down the appraisal industry at any cost. When the government is tripping over the dollars to get to the pennies and worse, allowing Americans to knowingly be screwed over something is obviously going on behind closed doors.
I think “one striking example” is probably just a typo. Thousands of striking examples would be something that needs to be investigated though. Let’s move on to learning how to change the right fee.
We actually do have a list of over 1,000 examples. This isn’t a one off, this is a consistent practice of many AMCs.
Many AMC’s – or most ? I say most. Out of the 150+/- that are working in NC I know of exactly 1 that discloses the fee split on their LOE. 1 out of 150+/- The other 149 have explicit verbage on their order forms or LOE that state “DO NOT INCLULDE AN INVOICE”!!!! Why so obtuse 😉 It’s like they have a license to steal ?? Dudd-Fwank created this mess – they should fix it. REVISIONS NEEDED!!!
Previously I wrote the site owner here. I don’t understand the need to submit fifteen to twenty years of amc abuse of the system and outright fraud evidence. Because anyone whom signs up with these companies can see this first hand themselves. Any employee sent into the amc realm could easily document this too. Whistle blowers would not be hard to find, they’re basically reporting about problems full time on employee review sites of amc companies. It’s not a secret but in fact, the amc industry standard and status quo. You pay to play and get cut off if you don’t advocate. The workers are grossly unqualified if not outright cheating on a daily basis. The preferred appraiser and rating systems is nothing but a cover to break rules governing behavior and legal fair engagement. Amc’s, the long arm of predatory lenders.
What would a complete and total audit of the entire amc industry reveal? Are they kicking back to lenders or other parties? Do they have interested situations creating conflicts of interests now that their service menus have expanded well beyond appraisal? Are lenders compliant in effective oversight of their hired agent requirements? I think we all know quite clearly the answers. What the amc industry has raked in junk fees is just the tip of the iceberg. The modeling is the problem, as under the disguise of being an appraisal management company, they can effectively circumvent a myriad of regulation, oversight, and licensing requirements. The appraisal junk fee rake was used for aggressive expansion to capture far more than just the majority stream of appraisal work orders.
“The Consumer Financial Protection Bureau has the authority to require this disclosure under the Dodd-Frank Act but decided against it in 2013, citing concerns about information overload for consumers.”
I’ve heard some huge BS before, but that’s some of the biggest. Do they actually think that people believe these lies?
that’s rich!
This would be a bit more believable if the photo could spell “Homebuyer” properly.
Appraisers are so heavily scrutinized by all sorts of federal and state laws, committees, agencies and organizations. Why can’t the entire industry be so scrutinized ESPECIALLY AMCs?? We are the ones that work at the highest level of ethics. Yet we’re the ones that are accused, manipulated and cheated. It’s time for the legislators to legislate and do the work that’s required of them. What say you?
As an appraiser this is dishonest hysteria. This isn’t “costing” homebuyers billions. The appraisal fees are what the fees are. AMCs don’t have the power to increase the fees. You guys are bent out of shape about the fee split. Which is typically disclosed on transactions that I have seen. Do you guys lose your mind over the split you have with your appraisers in your appraisal office? Do you demand to disclose you pay your appraisers 45%? or 55%? By not doing that is it “hidden fees” screwing the consumer? Its the same thing. The fee is the fee. The split is the complaint. Its not an “added” cost and the consumer isn’t getting screwed. Some appraisers are that take the lowball assignments.
Interest rates and volume are the problem in our industry right now. New appraisal products will be the problem. How much time do we waste making AMCs the boogeyman when you don’t even have to work for them? Its a complete waste of time.
you are missing the point, and not really informed, rarely are the AMC fees disclosed, they are lumped in with the fee the Appraiser got for doing the work, AMCs don’t review, they are at best administrators in the process and are really only entitled to a small portion of any fee paid by a borrower – an appraisal that should cost $400-500 is commonly $800+
Laughing at “uninformed”. 20+ years in this industry. You are complaining about your fee split and that they don’t disclose it in some cases. How does that cost borrowers billions? It doesn’t. Not any more than you not disclosing what you pay your staff appraisers in your appraisal office costs them billions.
You should also brush up on what AMCs do if thats what you think. I’m not the guy to defend them but its not even close to what they do.
I don’t care for them but they aren’t my biggest problem and sure as heck don’t cost people billions of dollars. Nobody takes us seriously when we make those claims.
Nasty you are
If you’re being paid the fee that you want, then why do you waste your time worrying about what the AMC’s fee is? if it were truly that simple to run an AMC then we would all be in that business.
Because we don’t want to be complicit in defrauding consumers? The same people whom invite us into their homes and trust us to provide an honest ethical service?
Have you considered that maybe real estate appraisal, and all the ethical and honesty requirements involved, may not be a good fit for you? You’d probably do well at an amc, if you feel exploiting consumers and wrangling in vendors to be complicit in fraud is no big deal.
As an appraiser for over two decades, paralegal in real estate and litigation for four decades. In my opinion you are correct. Everyone will have an opinion on this matter with good points and bad points. I do not police other people businesses. I am responsible for what I do. I do what is ethical and morally right in my businesses. It is my reputation that is on the line for what I do. As consumers we should have protections against fraud. Yet, not all things we do not like, by law are not fraud. Many of us are too concerned about what we cannot control.
By including both the appraisal fee and the AMC fee in the loan disclosure as a single figure, it appears to the consumer that the disclosed fee all goes to the appraiser. Since that is not the case, it is a fraudulent disclosure. That is, it is specifically designed to hide the AMC’s take from the customer. It’s a pretty straightforward concept. Please understand what you are talking about before posting.
Sage advice.
The consumer pays the appraisal fee. That fee is then split and divided just like if it were in your office. Nobody but the appraiser cares how it is split, they only care about how much the fee was and how much it cost them. The fee disclosure is “Appraisal Fee”. Not Appraiser fee. Not AMC fee. That is all under “Appraisal Fee”. On every HUD and closing statement that I have seen. That includes all appraisal related costs, clearly, as the feds have shown despite our relentless whining about it that they don’t care and don’t feel it is a violation of anything.
There has not been a single legal ruling that has indicated otherwise, or else it would be changed or fined. It is apparent that the feds don’t care what the AMC take is. They care about the total fee.
Please learn the industry before commenting on it.
It’s not the same at all, JR. The appraisal office, and the appraiser (whether a split fee or employee) actually produces something: an appraisal. What does an AMC produce? Nothing. They exist between the appraiser and the client (mortgage lender) to provide the appearance of separation between church and state. Period.
The fact that you have never seen it disclosed any differently in a HUD 1 statement has no bearing. The reason you haven’t is because the regulator has not required it. AMC’s lobby heavily to prevent transparency on this issue. Why? Because it would reveal the fact that they provide nothing for the money they are paid. HVCC and its red-headed stepchild Dodd-Frank simply provided a method by which these blood suckers could insert themselves between us and our clients, under the guise of keeping an arm’s length between the two to avoid lenders using their pet appraisers who always hit the required number.
The new system simply shifts that to the appraisers with the lowest turn time and lowest fee getting the bulk of the work. It does not provide any mechanism for quality, indeed, it runs counter to that, since speed and low cost are the enemies of thoughtful analysis.
I am in the industry, 42 years and counting. Your logic is flawed, you are using a false equivalency (it’s the same as a fee split). You haven’t seen it on a HUD 1, therefore it must not be important. It must be legal, and acceptable, or there would already be fines. Ergo hoc, post propter hoc.
Swing and a miss, junior.
I’m not following your point.
If its not illegal. If there are no rules or requirements for it. If there are no regulations against it, then what exactly are we as appraisers whining about? We all know Dodd Frank and HVCC and why it came about. And some appraisers were complicit in this. But now we are where we are. Borrowers don’t give a damn how much the appraiser gets and how much the AMC gets. Neither does CFPB.
I agree AMCs aren’t necessary most of the time, but its foolish to think AMCs don’t add anything other than a firewall. They have regulations, they review work, they manage appraisers which is like herding cats, they chase down appraisers to fix reports, they take on liability often in place of and before appraisers. DId you see solidifi settle a lawsuit for millions because an appraiser said something that could be construed as discriminatory. A bad word? They are also needed to manage volume. You think Rocket mortgage could keep up with the appraisal process on 450,000 loans a year? Of course not. AMCs help manage that.
Its also foolish to think AMCs work goes to the lowest bidder and the quickest turn time as an industry. There are some that do for sure, but that’s a bad business practice that ends up with corrections, competency issues, new appraisals, loan buybacks, and all sorts of problems. Thats how they get fired. The good AMCs don’t have anything to do with that. Its naive to imply it is the standard business practice of all AMCs because of some bad actors out there. Its like saying all appraisers are simple and give bad service based on a small sampling. That is naive for someone in the business for 42 years but I know its the appraiser dog whistle.
The topic of this column is blaming AMCs for billions in charges to the consumer. That is flat out misleading and wrong. Which was my point. Hating AMCs is fine and we all do it. Blaming them for all the appraiser woes is tired and reflects badly on the industry and leaves us perceived as out of touch and complainers. There are AMCs that pay as much as my bank and mortgage lenders do directly. We don’t take work from the low ballers. Those are meant more for new licensees and grumpy appraisers who can’t get work elsewhere. Why else would anyone take them.
I’ve been appraising since ’83. I don’t go broadcasting the total years because I don’t want people thinking I’m old and have lost touch like someone 42 years in the business. 🙂 Your efforts to patronize have fallen short and your point other than we have Dodd Frank and that the bad AMCs are bad, isn’t very clear.
Best Regards,
Junior.
I’ve been appraising since 1985 and while I don’t pretend to be a Philidelphia lawyer (how’s that for aging myself) there may be multiple violations of lthe law taking place. This includes customary and reasonable fees being violated when they search for the lowest fee. That little nuggest was included to stop exactly what is happening. Look, it’s real simple, the system is being exploited pure and simple. One can try and argue that any way they want but it doesn’t make it any less true. This is as much about the industry being screwed as it is the consumer so let’s not lose sight of that.
Bottom line what difference does it makes what anyone charges? Our concern should be are we getting the fee we deserve? I set my fees and I do not give a care what anyone else charge. You are 100% correct every fee or costs are disclosed on the closing sheet, settlement sheet and estimated mortgage closing docs.
It should bother you that someone else is piggybacking their fee onto yours, and telling the consumer that all that money is going to you. Good Lord.
Why should it? Nothing says all the fee goes to me. My fee is disclosed.
Your fee is disclosed.. where ?
In my reports on the addendum page on the first line along with the AMC fee. Also, in the closing settlement sheet.
Your fee should be on page 1 – as an invoice for disclosure. If it’s buried in the addendum it will never be seen. If not an invoice there should be a standard place where we ALL put the fee for tracking purposes. The AMC’s have been playing this game of non-disclosure since 2009. You state you also add the AMC fee?? How do you know what they are being paid?? Closing settlement sheet?? I’ve never seen a closing sheet that disclosed the breakdown in fees – which appears to be a violation of Truth in Lending. Just my opinion, I could be wrong.
It is not buried. It is on page one addendum first line that starts my commentary.
Example: This appraisal is ordered by AMC XXXXX, State Lic. xxxxx, Exp. xxxxx, Appraiser Fee: XXXXX, AMC Fee: XXXX . The states I work in, any loan cost to the borrower must be listed on the settlement sheet. It has been that way for 45 years since i have personally purchased 17 properties. All costs are fully disclosed to the seller and buyer..
Do you shop at a grocery store? The markup is about 40% there, and they don’t do anything either.
Again, the appraisal fee is on the HUD statement as one fee. The borrower in most cases assumes the fee is paid to the ” appraiser ” For transparency purposes the HUD statement should separate the fee into two-AMC-and appraiser fee. When the borrower applies for a loan does the lender state to the customer, ” x amount is for the appraiser, x amount for the amc. LOL!!! Do some research and see you has interest in the large AMC.
I have argued this point countless times. Each time that a lender or an AMC faxes, emails, or mails a document stating these fees they have committed either wire fraud or mail fraud.
Correct. Yet, it continues to this day. Who says lobbying doesn’t work?
JR must be an AMC employee. Think about the old days when you collected the fee at the door, say $300 for the report. Now you go through a ” middleman” who tacks on another $175-$200. So your telling me the consumer isn’t losing many with this current setup. Why is it the lenders that keep their loans can order order directly with the appraiser? This has all to do with Fannie and Freddie , supposedly saving the integrity of the ” appraisal” I suggest appraiser on this forum try to build their non lender business. With AI coming on strong it wont be long until we go the route of tghe Dinosaurs.
Cindy Chance spoke for many appraisers and did so correctly regarding Appraisal Management Companies. Sadly, the Appraisal Institute fired her.
Ah, that’s Billions with a “B”. That pretty much sums up the situation in a very short explanation why nothing is being done.
I just bid two jobs at $25 less each than I was getting twenty five years ago for the same types of job. I pushed the due date two days out due to the snow/ice storm we’re having here. Will I get either of them? Nope.
And, I got another one of those compliance agreement requirement things as if an AMC has a right to ask me about moral turpitude or anything else, especially any AMC out of California!
Your comment is exactly the problem I have with AMC companies – we are “offered” less than what we made 15+ years ago as though appraisers are immune to inflation – the rising costs of everything from housing, auto insurance, software and MLS access, cameras/phones, food, and fuel. How would anyone else feel if they had not received a raise in over 15 years? I cannot speak for everyone, but myself and a few others I speak to are struggling everyday just to make ends meet for about $15-20/hour average AMC fee. What other professional that requires licensing and continuing education makes as much as a data entry clerk (a recent job opening I saw), yet the consumer pays a significantly higher price than what we receive. If one receives 2 appraisals at 275 per week, that is a whopping $2,200 approximately. per month. A machine operator makes more and can barely survive the high costs of living. We need to be paid a fair wage for what we do considering the responsibility and business costs that we have.IMO
Make more money mowing lawns part time. Meanwhile; the amc industry is worth a trillion dollars. / Anyone care to take a guess why there is a perceived lack of appraiser coverage as most appraisal companies could not afford to hire and train new people in the last two decades? / Maybe paying appraisers less with hybrid appraisals for a tenth the compensation will solve the problem. / Remember; because of ‘appraisal valuation bias’.
price fixers…
Catch phrase of the day: “Information Overload”
Homeowners sign off 30 to 50 documents at a closing but their brains will explode if they see 1 additional line on the HUD-1?
You have to applaud and laugh your ass off at their stupid excuses.
It’s so stupid it might be brilliant.
Do the math!
450,000 appraisals per year for ONE AMC x $200 (minimum) to the AMC equals $90,000,000.
There are at least 30 AMCs that belong to their trade group.
NOW
$90,000,000 x 30 members equals $2.7 BILLION per year.
Yup, thats a pretty big lobying group isnt it!
the amcs are like a virus…they need a host to survive…making the independent appraiser sicker by the day and no mask will save you
***edited***
https://www.federalreserve.gov/boarddocs/caletters/2011/1108/11-8-attachment.pdf
Pg 50 – Valuation Independence. / TILA pg 62 / pg 125 on loan originator compensation; 1. No loan originator receives compensation, directly or indirectly, from any person other than the consumer in connection with the transaction (§226.36(d)(2)(i)); and 2. No person who knows or has reason to know of the consumer-paid compensation to the loan originator (other than the consumer) pays any compensation to a loan originator, directly or indirectly, in connection with the transaction.
Valuation Independence pg 126 / 3. No employee, officer or director in the creditor’s loan production function, as defined in §226.42 (d)(5)(i), is directly or indirectly involved in selecting, retaining, recommending or influencing the selection of the person to prepare a valuation or perform valuation management functions, or to be included in or excluded from a list of approved persons who prepare valuations or perform valuation management functions. / Customary and reasonable compensation. For any covered transaction, determine that the creditor and its agents compensated a fee appraiser for performing appraisal services at a rate that is customary and reasonable for comparable appraisal services performed in the geographic market of the property being appraised. (§226.42(f)(1)) (Note: For purposes of §226.42(f) “agents” of the creditor do not include any fee appraiser as defined in §226.42(f)(4)(i). In most cases the “agent” will be an appraisal management company to which the creditor has outsourced the valuation function / Define agency.
https://www.law.cornell.edu/cfr/text/12/226.42
(iii) In the case of information based on fee schedules, studies, and surveys, such fee schedules, studies, or surveys, or the information derived therefrom, excludes compensation paid to fee appraisers for appraisals ordered by appraisal management companies, as defined in paragraph (f)(4)(iii) of this section.
https://www.federalregister.gov/documents/2010/10/28/2010-26671/truth-in-lending
Prohibit appraisers and appraisal management companies from having a financial or other interest in the property or the credit transaction; / Mandate the payment of reasonable and customary compensation to a “fee appraiser” (e.g., an appraiser who is not the salaried employee of the creditor or the appraisal management company hired by the creditor); and / Conflicts of interest. The interim final rule provides that a person who prepares a valuation or who performs valuation management services may not have an interest, financial or otherwise, in the property or the transaction. The Dodd-Frank Act does not expressly ban the use of in-house appraisers or affiliates. However, because the Act prohibits appraisers from having an “indirect financial interest” in the transaction, it is possible to interpret the Act to prohibit creditors from using in-house staff appraisers and affiliated appraisal management companies (AMCs). /
Customary and reasonable rate of compensation for fee appraisers. Under the interim final rule, a creditor and its agent must pay a fee appraiser at a rate that is reasonable and customary in the geographic market where the property is located. The rule provides two presumptions of compliance. Under the first, a creditor and its agent is presumed to have paid a customary and reasonable fee if the fee is reasonably related to recent rates paid for appraisal services in the relevant geographic market, and, in setting the fee, the creditor or its agent has: Taken into account specific factors, which include, for example, the type of property and the scope of work; and Not engaged in any anticompetitive actions, in violation of state or federal law, that affect the appraisal fee, such as price-fixing or restricting others from entering the market. Second, a creditor or its agent would also be presumed to comply if it establishes a fee by relying on rates established by third party information, such as the appraisal fee schedule issued by the Veteran’s Administration, and/or fee surveys and reports that are performed by an independent third party (the Act provides that these surveys and reports must not include fees paid by AMCs).
Any questions?
Thank you Baggins, well said as usual.
Thanks. I actually sent in an edit request to keep all that copied reg, and drop some of the commentary.
At this point anyone who’s serious can and should be reading the rules rather than just opinion.
How many rules and departures from original intention of regulation need to be broken before someone pays attention?
Only in appraisal. Only in mortgage lending. The system has grown to the point it can no longer be effectively regulated, they’ve made everything too complex.
Good thing they don’t apply the same oversight standards and licensing requirements they do to appraisers to everyone else.
The AMC business model has abused our Independence since the inception of Dudd-Fwank. Their position in the model is nothing more than being a Pimp – and they play their role very well. Now get back to work you B*^$**s
We all know the deal: borrowers are being charged these “appraisal fees,” but a big chunk of that is going straight to the AMCs while appraisers are left underpaid. It’s ridiculous how this continues to happen, especially since it’s clearly against the spirit of customary and reasonable fees. And don’t even get me started on the lack of transparency……
I’ve always said this would be a non-issue if lenders were required to pay AMC fees themselves. Sure, that’s wishful thinking, but let’s not forget that lenders don’t have to use AMCs. They’re choosing to because it saves them money, plain and simple. And for some, it’s even more lucrative because they’ve created their own AMCs, milking the process for profit while cutting down what gets passed on to the appraiser. Meanwhile, borrowers are left in the dark, paying the full cost of an appraisal without knowing how little of that actually goes to the person doing the work.
The truth is, lenders could still order appraisals directly if they wanted to. There are no laws stopping them—they just need to follow the rules. But they’ve figured out that AMCs are the easier, more profitable route for them, and the rest of us are left to deal with the fallout.
That said, I think we’re starting to see some progress. It might not feel like much yet, but the conversations are getting louder, and we need to keep at it. If we stay persistent, we might actually see this change—not just for us as appraisers, but for the borrowers who deserve a fair shake in this process.
crooked coumo and fannie slithered into a dingy white room to model the hvcc after failed eappraiseit and landsafe…what a broken and corrupt system
Food for thought: from December 1 2024 to January 1 2025, the state of California saw 82 appraisal licenses evaporate. We just fell below 8000 total active licenses for the first time since the advent of state licensure. For you math majors, that’s a 1% drop in a single month. The snowball effect is growing. Think compensation might have something to do with it?
In San Diego County (City of San Diego, etc. / very isolated) where there is a population of 3.3 million there are currently 664 active licenses (1 per every 4,969 person) and only 17 trainees. Still way to many, but with next to no one coming in, the future of appraising (supply & demand) could be shifting in the coming years.
Seek the truth.
Truth. Not all active licensees are producing reports, so the totals are even more misleading.
Bags
Is there a way we can chat on the phone
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your clients are now your competition…i cant stop laughing
TKO!
Sad thing is any appraiser that was working before the 2007-08 housing crash knew HVCC and the AMC model that followed was a total rip-off to the appraisers, we all had to basically start over, client relationships that were in place for years, gone overnight. Sure Dodd-Frank replaced HVCC and we do get a little protection, but the rip-off part still lives on … I’ve been reading the same comments about AMCs for 15++ years, nothing is really going to change, the banks just make too much money from the AMCs they control. If the laws change again like they did when FIRREA came into existence Appraisers might see some relief, until then do as little lending work as possible.
they had a petition appraisers signed for value pressure before the financial crisis…but not one now even though 2009 looks like the floor of home prices i cant stop laughing
One of the problems I have with AMC’s is in their very name … “appraisal management companies”. Who decided that we needed to be managed? I’m an adult. I don’t need to be managed. Do any of you? In fact, I got much more work done when I wasn’t being incessantly interfered with by people trying to justify their unjustifiable jobs. It’s much like the P’nut the squirrel and raccoon story a few months ago out of New York, where some woman from Texas saw P’nut on the Internet and decided that he might have rabies, was being abused, etc. and complained to NY State wildlife officials numerous times over the Internet. It was absolutely none of her business, but she decided that it was. The guy was using P’nut’s videos to raise money to help wildlife, but now P’nut and the raccoon are dead and the guy has lost his resource for helping wildlife. Leftism ruins everything. I hope things get better under Trump, but I don’t have time or energy to hold my breath for that. Of course, the AMC thing was nothing but another financial extortion scam from the beginning. We’ve (not you and I) become a nation of meddlers in the business of others. Part of it is also about language. The phrase “appraisal management company” is just another lie that we’ve accepted like “appraiser pressure”. We took that illogical phrase on also. WE weren’t pressuring anybody or anything. Accurately, it would have been called “lender pressure on appraisers”. Note that “lender” is not even mentioned in “appraiser pressure” as if we were the ones doing it. Almost all of the language regarding us is newspeak, straight out of Orwell’s 1984. Here’s wishing all of you guys and gals a better new year …
Bet you if a squirrel picked up a lawn mower, they’d earn more than your average amc appraiser.
Just make sure you understand AMCs manage appraisals, not appraisers.
When did they stop over-managing Appraisers?? Fee bids, status requests, unrealistic turn times, overbearing reviews, scorecards etc etc etc. All of this paid for out of the Appraiser Fee – so they keep our resources and then demand an extra 30%+ of our time. I think we understand
I nearly choked on my burger while reading this ridiculous comment. That was the best laugh I have had all month.
value pressure, highest and best, customary and reasonable, appraiser independence…all of it is word smithing used to manipulate the masses
Fees will only go up for the appraisers if rates get back to the 5’s and there is a refinance and sales boom. The amcs paying $250 to the appraisers will have a tough time placing orders and be forced to raise their fees?however with more waivers not sure how much more volume there will be, also with new forms coming mid 2026 any appraisers near retirement age will likely call it a career and there will be less appraisers, that is one bright spot for increased fees with new and more complex forms coming. Just reading the tea leaves, what do others think?
Skip the long form data, use the powers of inference and psychic ability to stay well informed? The avm final rule may have the answers to your question.
https://www.consumerfinance.gov/about-us/blog/cfpb-approves-rule-to-ensure-accuracy-and-accountability-in-the-use-of-ai-and-algorithms-in-home-appraisals/
https://files.consumerfinance.gov/f/documents/cfpb_automated-valuation-models_final-rule_2024-06.pdf
pg 110 / 6. Any significant alternatives to the final rule that accomplish its stated objectives. As noted, the final rule implements a statutory mandate, thereby limiting the ability of covered agencies to consider alternatives. That said, agencies did exercise authority provided by section 1125 to include the nondiscrimination quality-control factor (given continued evidence of disparities in residential property lending terms along racial and ethnic lines)
If waivers are now extended to everything below 98% LTV’s or very high risk borrowers, and the final rule ‘implements a statutory mandate (to use avm systems), thereby limiting the ability of covered agencies to consider alternatives’, coupled with hybrid pdc alternatives to what work is ordered, how will that affect appraisal work volume?
I keep records on my business, since its 1989 inception. My average fee that year was $275.38 which was pretty reasonable at the time. But 1989 was 36 years ago, how the hell can anyone be accepting $250 appraisal fees in 2025? Gas was $1 a gallon back then. I can’t believe the garbage some people will accept.
Speaking only for myself, lending work has become a fraction of my total earnings; around 10% in 2024. I will not be learning the new system, it’s just not worth the agida in my opinion. I’m sure a lot of us old guys feel the same way about this. Best of luck to you all.
Any increased appraisal work demand and marginal fee increases will be very temporary – if at all. This will give THEM the excuse to further distance THEMselves from fee appraisers and use more and more automated “valuation” (non-valuation) methods. Appraisers are very disposable and are systematically being disposed of. Functionally Obsolete I believe is the correct label. We are an obstacle to their total control power grab.
Keep an eye on the housing (and car) market. The dems/banks/power brokers have somehow been able to sit on and delay an out and out devastating crash. Seeing that the dems are leaving all sorts of landmines for the new administration, one surprise could be that the housing market would be allowed to fall to unbelievable levels. Then I wouldn’t be surprised if THEY then swop down and buy up all of the vastly increased housing stock at ultra bargain basement prices, only to make more of us renters. Or maybe instead of renting you would have a subscription to use the house. (Side note: automobiles are in the early stages of having you to pay subscriptions to be able to use various functions of your car). But according to them “you would be happy”.
Investors in Fannie, Freddie Should Consider Depth of Deception
Realist, see Mr Bagotts article he just published today. Title above. He’s on X if you don’t subscribe to his news feed. Bargain basement prices is an understatement. Appraisers hopeful that volume and fair dealings will return under this system are dreaming. There will be no crash, as first purchase opportunities of discounted property moves directly into the hands of said investors, regular citizens never get a similar discounted purchase opportunity. Higher prices for everyone. Forever.
https://capitalmarkets.fanniemae.com/whole-loan-sales
The biased appraisers movement, and everyone whom played along, was an insider play to install a completely new system enabling central control of real estate markets now beholden to capital investors. Blame the appraisers, the lowest paid worker in the industry, for ‘denying generational wealth’ to entire communities. That was the IQ test part, it takes a very special kind of person to believe such a tale. So easily deceived by complex data. In a surprising twist, the bankers actually have the impoverished begging for higher prices, pitchforks out.
The Impoverished begging for higher prices 😉 So correct, the DC Swamp rats are pressuring Appraisers to overvalue the Impoverished in the name of “equality”. What happens to “affordable housing”?? You truly can’t have it both ways – unless you live inside your butt inside the DC beltline. Praying 2025 begins to DRAIN THIS SWAMP ! Peace.
Thank you for the comments/information Mr. Baggins. Always enjoy your insights.
There will be just one form and from what I have seen, Fannie says the new form is less time and less work. Can’t wait.
The change will be easy for some, and probably retirement for those who don’t like change.
Have you looked at the videos about the new form? Doesn’t seem at all like it will take less time.
I have no intention to change from a 6 page form to a 20 plus page form. Expect a fee charge increase for the extended more hours to complete the new form. 99 % of my work is Non Lender Estates, Divorce and Legal work.
Still waiting for the final version we can print out on paper before going to the inspection or developing the workfile. Appraiser fnma working group complaints included appraisers won’t know what data the form requires of them, until after they start filling out the form. Juggle filling out the form on a mobile device while you’re on site trying to complete an appraisal inspection in the borrowers limited time frame window? Calculate the cubic air volume of rooms and count every individual window? Ask for the home owners wifi password? New forms are a bust before they are even finalized. They forgot net/gross adjustment indicators and spread the grid across ten different pages.
Can we pray that FNMA get’s DOGEd in the next 90 days ? I can dream can’t I 😉
I’m praying with you – contact the powers that be and get them to look into this
You can dream the FHFA get’s Doge’d, and they deserve it, but no such luck with fannie, as they’re private not government.
https://patents.google.com/patent/US8775300B2/en?oq=US8775300B2
There was a recent study that every single federal employee costs the general private workforce over forty jobs which never materialize or are destroyed by the federal employee’s presence and actions. If considering the FHFA, the limited amount of high paid employees, that only a portion of them have been involved with appraisal and have effectively destroyed the independent appraisal industry, the jobs loss vs FHFA employee for independent appraisers is likely to be nearly 500 independent appraiser jobs lost per each individual FHFA employee whom meddles in the appraisal industry.
https://www.zerohedge.com/personal-finance/these-are-us-government-agencies-highest-paid-employees
Wow… is FNMA really private? Quasi gubment at minimum. I would think DOGE would have some influence. Maybe.. I wish…
…i’m sure most taxpayers think the bailout babies are a gov agency
Another appraiser was explaining this to me. It’s complicated, link below. For all the problems, all the complexity, for them to claim removing full service human appraisers will solve every problem. A ruse.
https://www.fhfa.gov/
The Federal Housing Finance Agency (FHFA) is an independent agency established by the Housing and Economic Recovery Act of 2008 (HERA) and is responsible for the effective supervision, regulation, and housing mission oversight of the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Bank System, which includes the 11 Federal Home Loan Banks (FHLBanks) and the Office of Finance (OF). The Agency’s mission is to ensure that Fannie Mae and Freddie Mac (the Enterprises) and the FHLBanks (together, “the regulated entities”) fulfill their mission by operating in a safe and sound manner to serve as a reliable source of liquidity and funding for housing finance and community investment. Since 2008, FHFA has also served as conservator of Fannie Mae and Freddie Mac.
https://www.fhfa.gov/search/node?keys=appraisal
https://www.fhfa.gov/about/fannie-mae-freddie-mac
Fannie Mae was first chartered by the U.S. government in 1938 to help ensure a reliable and affordable supply of mortgage funds throughout the country. Today it is a shareholder-owned company that operates under a congressional charter.
FNMA charter / The charter also details audit requirements and transparency. That’s pg 13+
https://www.fhfa.gov/sites/default/files/2023-07/Fannie_Mae_charter_Act_N508_0.pdf
(j)(1) The programs, activities, receipts, expenditures, and financial transactions of the corporation shall be subject to audit by the Comptroller General of the United States under such rules and regulations as may be prescribed by the Comptroller General. The representatives of the General Accounting Office shall have access to such books, accounts, financial records, reports, files, and such other papers, things, or property belonging to or in use by the corporation and necessary to facilitate the audit,
(m)(1) The corporation shall collect, maintain, and provide to the Secretary, in a form determined by the Secretary, data relating to its mortgages on housing consisting of 1 to 4 dwelling units. Such data shall include? (A) the income, census tract location, race, and gender of mortgagors under such mortgages;
(K) describe the activities undertaken by the corporation with nonprofit and for-profit organizations and with State and local governments and housing finance agencies, including how the corporation’s activities support the objectives of comprehensive housing affordability strategies under section 105 of the Cranston-Gonzalez National
Affordable Housing Act; and
https://www.hud.gov/sites/documents/TITLEI_CRAN_GON.PDF
The question remains; Is the fast and loose handling of the valuation service industry acceptable practice according to the charter? Reading this again reminds me why the movement to simply eliminate the GSE’s was likely a better idea than conservatorship. If investors were not backed by the taxpayer, would they have gone this route?
https://www.sec.gov/ix?doc=/Archives/edgar/data/310522/000031052223000184/fnm-20221231.htm
Failure of our models to produce reliable results may adversely affect our ability to manage risk and make effective business decisions, as well as create regulatory and reputational risk. /
See image attached. They message one thing about reliability of avm and automated systems, third party participation being safe and sound, then disclose the exact opposite in securities filings, that these inclusions may create extreme investment risk.
https://www.fhfa.gov/policy/executive-compensation
Your tax dollars, hard at work.
I am not looking foward to the new forms – so many areas I work do not have wifi, and I’m often looking at preconstruction properties – no homeowners to ask about connections. I’m looking for another part time job – don’t get enough non-lending work. If I find something that replaces the pathetic income I’m earning – including all the business expenses, I’m probably going to be out of this business. I like appraising though, and hope to find enough to at least keep in business for a while longer
fannie guidelines, fannie forms, fannie jargon, fannie rating system, fannie certs, fannie CU review…and appraisers claim to be independent i cant stop laughing
It would’ve been a kind gesture if FNMA/Freddie would have consulted with appraisers in the development of the new URAR. This was all done behind closed doors by the end users, with not one appraiser providing input for the new form.
The exclusion of appraisers really puts things into perspective on many levels.
The GSE’s have moved on from traditional appraisers and rely on their algorithmic agenda tools to push loans through, and have made the ‘Appraisal Waiver’ the priority going forward. Another tell is the lack of TAF involvement. Where the hell have they been? Other than selling us useless USPAP classes, they are equally as worthless as AMC’s.
I’d love to be optimistic about the new form, but on the surface it sounds disastrous. How many more appraisers leave the profession when it rolls out?
Most, but that was coming anyway. 2/3 of us are over 60, this just accelerates the process. However, you are not obligated to perform lending appraisals.
They still need and want boots on the ground – they just don’t want to pay for them. The AMC’s have been busy lobbying FNMA and AARO in DC while keeping us Indpendent boots on the ground busy just tyring to pay our bills. IF we had been able to keep our time and resources for ourselves do you think we could have afforded some lobbyists of our own?? I do. REVISIONS TO DODD-FRANK TODAY!! Take back the AMC golden ticket, they have exploited it enough to retire to the Caymans where all their $Billions in profits have been deposited. Give us back our business and turn times will not be your problem.
there is no party like a 15th street party…
Its all for the purpose if UAD and data skimming to allow algorythms and AI to eventually be used to compile appraisals.
That is the goal, be assured.
Just wait till the new fmna appraisal format becomes mandatory, THEN we can maybe say P&$$ off to the AMC’s and their low ball insulting fee offers they try and get us to take. THe main problem is that the states individual laws are allowing this BS to happen. Most states ALLOW amc’s to useAMC “staff appraisers” to do appraisal work. This is a growing problem and can only be eradicated IF states legilatures enact or revise laws that specifically prohibit an State Registered AMC entity to hire staff appraisers for the sole purpose of completing an appraisal, and allowed to also operate as an appraisal provider.
you know what kills me the most about the forms… is that i got to pay for them to steal my intellectual property
Homeowners who now agree to accept an appraisal waiver instead of using an actual certified appraiser are now wondering if they will receive a copy of the appraisal?
This is the grey area now is the lenders don’t have to give a copy of the appraisal since the borrowers waived their right to full inspection appraisal. Yet there is a good chance a fee was added to the loan for an AI Valuation fee.
I’d love to see the TILA and Settlement Statements of RE purchases without an appraisal (or PIW) to see if the borrower is charged an ‘appraisal fee’.
I’d bet money they’re being charged a valuation/tech fee of some sort. If they only knew….
Eric. When we refinanced several years back, they gave us a waiver. Our LTV is really good and the loan amount less than six digits. We did receive a fee basically equivalent to an appraisal fee, but that went to a realty agent doing PIR type drive by’s for an appraisal management company, with no clear disclosure of the fee breakdown. From what I could tell the sales agent got around $200 for a half dozen photos and really basic property research. (I remember that work used to go to appraisers, no value property inspection reports $150-$250 and we’d get a never ending stream of those requests.)
We didn’t save anything with our waiver, only gave work to a realty agent and an amc instead, paid an alternative fee. I’ve fought with our credit union for years about their use of an amc. Consumers are powerless to even request appraisals in these situations, I was denied such a request. My mb said why don’t you tap into that work? I explained to the mb the amc’s refuse to let appraisers have that work anymore, because then their discounted full appraisal fees could very well be less than their no value drive by fees, so the amc’s now only give that work to realty agents instead, to maintain the illusion. Can’t say what others go through, but that was our experience with a wavier several years back. We still paid roughly the same amount as an appraisal, but the disclosure did not say ‘appraisal fee’.
good appraisals don’t cost money…they save a whole lot of it
maybe if the ivpi established the appraiser hotline then their unethical behaviors would have been curtailed….i cant stop laughing
It was a different world in 2008 – the AMC’s had not been yet handed the golden ticket from Dudd-Fwank and there was only a few – vs the 150 or so skimming $Billions a year. There was some value pressure in 2008 – but it was manageable and at least we were able to earn a fair wage. The IVPI will seem very naive from what we know now – but the intentions were honorable.
honorable is very subjective…the ‘creators’ of the ivpi were praising crooked coumo unconstitutional hvcc so there is that..blaming appraisers for no doc loans is like blaming humans for climate change
At the time the HVCC seemed to be a step in the right direction – however it was corrupted with hidden agendas… as usual.
why the hvcc when we had uspap….TAF may be more corrupt then coumo
Independent Appraisers have been manipulated and abused at every level, especially since 2008. Reparations ? ;))
yes…i would donate for some good class action lawsuit against the unethical stakeholders who do the manipulating
I agree sort of, if you remember that’s when the 1004MC form was suddently required, as it turns out many appraisers weren’t doing any market analysis AT ALL, this at least forced appraisers to do the work – we aren’t without some blame.
My opinion.. Why are we supposed to be Economists? We are only performing a market analysis on a single subject property tasked with choosing relevant recent sales. Stop Scope Creeping the damn Appraisal for your Title Search and Economic Forecasting. They want fast and cheap – make up your mind!!! Stop stealing my time and resources and turn times will not be your problem. But that;s just my opinion, I could be wrong.
the median listing price…nobody cared about that…that form was misleading and i stated it as such…just like the 1004 can be misleading…uspap should outlaw all preprinted forms
oh, the 1004MC form was horrible, it made things worse, its better not to report anything than to use a form like the 1004MC, totally disagree about USPAP and forms … if the appraiser has any knowledge or skill, most are just fine
oh, the 1004MC form was horrible, it made things worse, its better not to report anything than to use a form like the 1004MC, totally disagree about USPAP and forms … if the appraiser has any knowledge or skill, most are just fine
they are stealing your intellectual property from their forms…and using it against you…anyways independent means not controlled by others i cant stop laughing
standardization is socialism…it is misery for the 99%…hello comrades
Why Report a State Board Investigation or Complaint?
by Isaac Peck, Senior Broker at OREP.org
To say there is a high volume of state board complaints filed against appraisers is an understatement. Fannie Mae has admitted to filing more than 1,000 complaints (they call them “tips”) with state boards and licensing commissions in a single calendar year. Even if we consider that Freddie Mac is filing slightly fewer complaints, the government-sponsored enterprises (GSEs) are easily filing over 2,000 complaints against appraisers per year.
they must of filled out their forms wrong…i cant stop laughing
All part of the plan.
The GSE’s leverage appraisers through endless regulation, waivers, AMC’s, and DEI, and then have state boards fine and administer sanctions on good appraisers on the other side. The perfect storm to apply endless pressure on a profession that cannot fight back. They want us gone.
Yes, I agree, they simply want us out of the mortgage business but of course they can’t come out and say that. They are nit-picking the slightest “perceived” thing to send out letters and or complaints to the licensing boards. I just hope the state regulators can see through the smoke and mirrors of what is really going on. I’ve said and continue to say they want us all gone from the mortgage industry. Not being political but if the government can undertake an all-out war against a presidential candidate, we are small potatoes in the whole scheme of things. Our own government officials joining forces with the lending industry players (including the regulators) to undermine the appraiser through threats, intimidation and prosecution is despicable. It’s all about the money folks regardless of what they say. The debacle that will result from the efforts being made today are going to undermine any advances our government is going to make and will dwarf the last real estate crash, but the players don’t mind because they made their money and the Amercian taxpayer will once again bail them out. Including FNMA. I only can hope that the DOGE recognizes the potential failure of this jerry-rigged system and the potential failure it faces as it will be catastrophic in proportions. I truly believe Musk has the wherewithal and intelligence to see what is coming in the future as that has the potential to be the most colossal waste of taxpayer money in the history of this country. Whether you agree with my insights or not, it is truth.
Appraiser at center of Rocket Mortgage lawsuit has license revoked
The Colorado Board of Real Estate Appraisers revoked the license of Maksym Mykhailyna after an investigation
January 22, 2025, 2:51 pm By Brooklee Han
The Colorado Board of Real Estate Appraisers executed a Stipulation and Final Agency Order for public censure, fines, and revocation of the license for Maksym Mykhailyna, according to an announcement in early January. Mykhailyna, who is based in Denver, had previously held both a Colorado certified residential appraiser license and a controlling appraiser license. In addition to the revocation of his license, Mykhailyna must pay a total fine of $97,500.
Mykhailyna was the appraiser at the center of legal action by the U.S. Department of Housing and Urban Development (HUD) and the Department of Justice (DOJ) back in June over an allegedly biased valuation of a home in Denver. HUD and the DOJ charged Mykhailyna, his company, Maverick Appraisal Group, appraisal management company Solidifi U.S. Inc., and Rocket Mortgage of discrimination under the Fair Housing Act. In December, Rocket sued HUD over the charge, saying it was not accountable for an appraiser’s actions given the arms-length requirement of the law.
The censure, fines and Mykhailyna’s license revocation happened after BOREA directed the state’s Division of Real Estate to conduct an investigation into Mykhailyna and his actions in response to a complaint received by the Division.
According to a release from the Colorado Department of Regulatory Agencies, the investigation revealed that Mykhailyna “ran an appraisal firm that improperly retained the services of unlicensed individuals located outside of the United States to complete appraisal assignments and then affixed the signatures of credentialled appraisers to the reports, often without their knowledge.”
“This business model was not only misleading to the clients, but also to his credentialled appraisers on staff,” the release stated.
A second complaint investigation found that Mykhailyna also violated license law “by failing to supervise both licensed and unlicensed assistants and by submitting and aiding and abetting the submission of appraisals that contained signatures from appraisers who did not author the appraisals.”
Division Director Marcia Waters noted that federal agencies are aware of the allegations against Mykhailyna and she highlighted the lawsuits filed by the HUD and the DOJ.
When asked about the Division’s actions, Waters said “the Division of Real Estate treats all investigations with the utmost care and holds all licensees to account for violations of license law.”
https://www.housingwire.com/articles/appraiser-at-center-of-rocket-mortgage-lawsuit-has-license-revoked/
leave it to the State boards to police appraisers…well behind the curve
The pertinent question; Was this appraiser using the typing services and report filling services which have become so common? The companies that provide those appraisal typing services are often overseas. They know how to fill out the forms already. Some amc companies have their own internal report typing services and send the majority of order assignments to the appraisers whom subscribe to the amc typing the reports for them. Then the appraiser reviews the completed report, adjusts if wanted, and affixes the digital signature. This egregiously unethical practice became the new status quo due to the amc industries biased order distribution methods where the lions share of work orders is constantly sent to only the appraisers whom turn the reports the fastest, for the lowest cost. The question one is not allowed to ask; are there any volume limitations for order distribution to individual appraisers to prevent this abuse of assignment trends? Of course not. Because if there was fair distribution of assignment volume, that would need to come with fair upfront fees and the amc could not longer shop for the lowest bidder or entice appraisers in these manners.
The CU system can and should have been coded to identify redundant copied language which likely appears across a broad spectrum of appraisers whom use those services. It would be a logical conclusion that if matching pre typed language appeared across unrelated appraisers reports, they are likely using outsourced services which may indicate poorly or insufficiently supervised appraisal work product development. That and plagiarism.
But if they did that, every volume producing appraiser through the entire amc realm would be immediately flagged. Somewhere up to 85% of all appraisal submissions, which is the ratio of lenders whom use amc’s, vs those whom do not, would be likely identified as containing some form of irrelevant pretype or plagiarism.
Instead what we get is a new fannie requirement that appraisers are required to buy into systems which provide generic language explanations for calculation of time adjustments. As another appraiser stated; Now also requesting the appraiser to become a market forecaster and mass data analyst similar to a statistician or mass value appraiser such as would be a function of county assessors or commercial appraisers with CG licenses.
I found an old 2009 fannie document on quality appraisal submissions which I’ll post below in a minute. A total opposite contrast of the new avm, hybrid, and pdc faux-qualified persons approach.
i remember when coester said ‘we are not in the business of killing deals’…comprendre?
Ohio, you’re my new blogging hero. Sorry to everyone else, you’ve been demoted.
Read this; 2009 – fnma – Guidance For Lenders And Appraisers.
https://www.mdappraisers.org/file/Fannie_Mae_appraisalguidance-2009.pdf
With the avm final rule, waivers, pdc’s, and hybrid programs, these standards are no longer applicable to the vast majority of mortgage lending origination. Distinctly opposite of the lenders internal avm use allowance, property data collectors, hybrid reporting. The departure from previous rules and guidance is absolutely stunning. ‘Appraisal modernization’.
If you’ll recall the recent legal activity which claimed lenders and various amc’s can’t be held liable for the appraisers independent actions. I present to you these lines from the 2009 FNMA guidance for lenders and appraisers.
___________________
Lenders are solely accountable for the performance of the appraisers they select and must make all required
representations and warranties related to the appraisal and condition of the property
Fannie Mae recommends lenders require the appraiser or appraisal service that makes the selection to
assume full responsibility for the quality of the appraisal. (Note: Imposing this responsibility on the appraiser or
appraisal service does not relieve the lender of its warranties related to the appraisal or the condition of the
property.)
___________________________
If fannie, freddie, hud, amc’s, or lenders, want to file never ending complaints on appraisers, let them. They’re filing complaints against themselves. When a lender orders and approves an appraisal, they become inseparably tied through the life of the loan. It’s high time there was some further reaching accountability for the lending and amc community as well. If appraisers are subjected to these complaints, they should demand the lender and/or amc be included in the states investigation.
The volume of appraisal complaints filed over the past few years. That should be generating several thousand individual amc and lender accountability investigations alongside. They’ve already entered all of this into state board and public records which can be subject to FOIA requests. Now all someone needs to do is open case files to include lenders and amc companies with each and every unresolved or recently resolved appraiser complaint filing.
Complaints which are filed months and years after prior underwriting approval are admissions of guilt by the lender or if the complaint is filed filed by gse’s, creating a simultaneous complaint against the lender and the appraiser together. Creating defacto acceptance of the warranty liability by the lender. This is why traditionally the gse’s would push repurchase orders back to the lender, then the lender would drop the appraiser, rather than pushing appraisal complaints directly to state boards. They took a dangerous gamble and if anyone qualified with authority looks at this, there could be substantial accountability on the horizon.
The only time a valid complaint against an appraiser is filed and that complaint is not tied to the amc and/or lender, is when filed immediately and the lender drops the appraiser from panel. Otherwise they’re both in bed together and no take backs. This is why I say if you’re good enough to be on an approval panel, the appraiser should get a fair share of the assignments. The idea of stacking panels, then shopping service, engaging in disproportionate assignment, then filing state complaints after the fact when something goes wrong or a borrower defaults as a safeguard… Those whom accepted this method have opened themselves to incredible liability, lender, amc, and appraiser alike.
Enter the avm final rule, the expansion of the waiver allowance and hybrid programs. A last minute attempt to ditch the entire system and brush off all previously earned accountability. Now that default rates climb to double digits, more than one in ten borrowers stare down serious loan delinquency, loan mod allowances to 115% LTV, 40+ yr loan restructuring allowances w/ rate increase caps. Preferential biased treatment to some groups of citizens and not others. No big deal. If they don’t go for a lifetime debt trap, the FNMA wholesale program sweeps up the mess as investors get first purchase opportunities to claim housing for pennies on the dollar, regular citizens never see market pricing adjustment or affordability relief for the rest of their natural lives.
Take a bite outta that apple. Appraisers do not stand alone in isolation. Admonishment of the appraisal community is in turn an admonishment pointing directly to the lending community and GSE apparatuses for this entire country. If the citizens don’t need the human appraiser to protect consumers interests or housing valuation integrity any longer, then lenders don’t need the backing of the GSE’s and taxpayer money either. Then one can talk about crt’s, default swaps, concealed investor risk, how volume producing amc appraisers are complicit in consumer harm rather than victims. Never ends in this industry.
This whole black box thing reminds me of the movie “War Games”. “I think we ought to take the men out of the loop”. How’d that work out, WOPR?