Vote With Your Wallet. We Can’t Boycott the AMC Industry Twice

Vote With Your Wallet. We Can’t Boycott the AMC Industry Twice. Vote with your wallet. Vote with your feet. Vote with your time. Vote with your patronage. Vote with your clicks. Sorry to inform those who are seeking someone else to bail them out of this continued blatant abuse of power and ongoing racketeering enterprise known as Appraisal Management Companies (AMCs). We can’t boycott the AMC industry twice. It’s your turn now.

And that’s the rub, it’s our industry, not some other groups industry. Without appraisers, there is no valuation services industry. The appraisal management groups presence is irrelevant unless appraisers choose to make the AMCs relevant with patronage. Each appraisers individual actions and individual choices matter. When an appraiser works with an AMC, the appraiser becomes the customer of and willing patron of the AMC. On account of the appraiser providing primary income support, that is in fact what a customer who agrees with the business model of the product purveyor does. Love it or leave it.

I’m on lately with the GSE offering special discounts and first purchase opportunities to hedge funds and investment firms during this latest down cycle which is just getting started. You may not know it, but REO is raging, repossessions are scaling up swiftly, and treasurer default notices from local counties are at 2008-2012 levels in many locations. The regular appraiser and regular citizen does not see this, as a substantial proportion of properties which would be otherwise discounted for regular citizen opportunities are instead funneled via special interest groups benefit to first receivers. Fannie Mae & HUD promised to reduce this practice when Elizabeth Warren and other politicians called them out on this in 2015. At the time the GSEs promised to make a substantially higher volume of defaulted housing stock available to regular citizens via first look programs and such. This does not appear to be happening at this time, various realty agents specializing in REO told me they are busier than in years, but most inventory is not moving through default managers who return these properties to market, rather purchased upstream at auction in bulk by said investment firms and hedge funds.

Since when was it the responsibility or mantra of GSEs to give first purchase opportunities and special discounts to corporations when there is an ongoing shortage of housing stock, alongside an ongoing affordability and availability crisis? It’s quite ingenious really, they’re all artificially propping up the rental market and price of housing, without having to admit or reveal to the public how much damage their policies and actions have caused. There is no such thing as residential anymore under these special interest programs, it’s all commercial now. Like a triple win; the discount buy, the heightened sustained rental gain, the eventual high principal write off if they liquidate or artificially high resale price when the books need balanced. These actions are actively compromising market stability with a form of subsidized parity, withholding the effects of actual free market forces. Cumulatively these activities may be withholding trillions of dollars in property equity from regular citizens. Those accusing appraisers of withholding equity from certain groups out of perceived racial bias should take note.

One agent stated an eerily similar position as appraisers: “they won’t need us much longer, it’s all going automated.” This prompted a conversation about ongoing abuse of valuation services engagements, “these groups would have appraisers using remote services and completing desktops for $50 or less per order.” Agent responded: “yeah, we use those services too, that’s where the industry is heading.” The rebuttal however was that the difference is the sales agent flips BPOs with remote/discount inspections, to then turn around and get full listing commissions. Where as the appraisers full insurance is now tied to a tenth of the compensation or less, with no further compensation down the line, increased liability due to lack of inspection and increased volume, a type of liability the agents pass off down the line but the appraiser can not.

This is just one example of the extremely irresponsible mismanagement the appraisal management industry is responsible for, with their short sighted selfish advocacy for reduced fee discounted appraisal assignments and counter productive ‘appraisal modernization’ efforts. As these corrupt predatory non transparent AMC companies continue to pretend to speak on behalf of all appraisers, despite less than a quarter of all licensed appraisers being willing to engage with AMCs. But hey, who cares about consumers or small businesses anyways, we are old news and everyone is sick of hearing people complain about lack of competent service, data security, affordability, availability, unearned fee racking, collusion, racketeering, special interest group favors, etc… People need to understand how our new government works, and that’s just the way it is. The alternative is taking our own industry back, one appraiser, one direct lender solicitation, one important informational disclosure at a time.

By BG, Certified Real Estate Appraiser

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17 Responses

  1. Avatar Melissa Trainor says:

    The sad part is that there are some really great AMC’s to work for and the “Good” banks have their own appraisal department in place as to avoid the ridiculous AMC’s. The unfortunate part is that the wretched AMC’s are now trying to lowball us at this time and offer us half or less than half of what we were getting paid a year ago. AND THE REALLY SAD PART IS THAT THE “DESPERATE” APPRAISER’S ARE TAKING THOSE RIDICULOUS FEES!!! I refuse to take the lowball offers. It’s a complete insult and this is when we know what AMC’s we need to stop working for. I counter with my standard fee for the scope of work and some other idiot always has snapped it up for less than half of what I would expect to get paid for the job. WE ARE THE PROBLEM!! You sub-standard appraisers that are desperate are ruining the entire industry for the well educated, highly respected appraisers. Go on and take the insulting fees that they offer, because you will lose you license soon enough. If you don’t put the proper amount of work in and the mortgage goes into foreclosure, you are going to be the one who is blamed. Go ahead and hang yourself and accept those insulting fees. I’ll never lower my standards regarding me fees or the work I put into a report. TO ALL THE RESPECTABLE APPRAISERS: LETS ALL STAND TOGETHER THROUGH THIS. DO NOT ACCEPT ANY LOW BALL OFFERS FOR OUR HARD WORK AND OUR YEARS OF EXPERIENCE AND EDUCATION!!!

  2. Baggins Baggins says:

    Oh what the heck, I’m going to market a few of them. It’s still got to be better than dealing with amc’s.

    Melissa, you’re preaching to the choir but if you want those other appraisers to get a clue, direct them over here with posted links. I mean talk about a night and day difference in industry approach and understanding. There is a person over there right now asking whom could sign off on their non qualifiable hours. Groups of them coordinate with fee reduction strategies specifically for amc’s right there on the online boards. Can’t make it up.

    Related reference;

  3. Avatar Realist says:

    Similar to banks covering the tracks of a rapidly disintegrating housing market by deceptive maneuvering,It is my understanding that a similar thing is happening in the automobile market. Banks are apparently manipulating the car market by withholding a massive repossessed used car inventory to conceal the devastating state of that industry. I am not sure how long they can keep that up – but maybe they have or will create a way to package these repos and sell at a discounted price to mega-dealers. Maybe this will allow them to keep car prices artificially propped up.

    What I am suspecting is that banks/lenders are massively in trouble between real estate, automobiles and who knows maybe credit cards and on and on. I would not be surprised if many/most banks have technically failed already but have been able to keep up a façade, at least for a while. So much for the supposed fiduciary requirements of banks/lenders that likely in effect expired decades ago. Maybe we are witnessing an evolved (toxic) Crony Capitalism. Way to much concentrated power. Hang on – I bet 2023 will consist of unimaginable events / traumas / unwanted changes.

    Very good and timely article!!

  4. Avatar Koma says:

    Dropped them all but one (after 12 yrs they pay my fees and revision request are almost non-existent) and will not look back! I still get emails from the others asking if I’m willing to come back…NOPE!

  5. Baggins Baggins says:

    On auto, interesting.
    Well that figures. You probably won’t find hedge funds and big firms mass buying repossessed autos though. The term; depreciating boxes, comes to mind.
    It’s all commercial now.
    Fed past two year activity recap. When I print a trillion dollars, I buy mortgage securities! It’s all so incredibly complicated and not quite as well managed as people think. Plunge protection team is tap dancing at an incredible speed, mind boggling. We came pretty close, pretty close. People would probably sleep better at night not actually knowing the inner workings of the mortgage lending markets. If you ever wondered where all your connections went, fyi.
    ‘Finding the “back doors” into deals, like buying the defaulted note before it goes into full-blown foreclosure, tax and tax lien sales, working with hedge funds that buy bank-owned properties in bulk (and at WAY bigger discounts than you ever could) and more’

    I wanted to present something better than this, but in the investor world, there are more seminars than news stories. Important take away here; It’s an open secret, Fannie offering wholesale and bulk property buys to hedge funds. I mean come on, this PAVE task force is just window dressing, bread for the masses. The real action happens on the auction block. The GSE’s could right now stop the auction activity and issue first look for everything or some other form of expanded 203k access program. How far do you suppose such an effort would go to correcting this generational wealth gap we keep hearing about? They choose not to allow market corrections to happen. They choose not to allow Americans to have a fair share of equitable market value. Because it’s an easier political maneuver to shout racism at the unrepresented appraiser and not upset their big money hedge funds and associated donors. Cause, you know, they, like, are, investors, themselves.

    I don’t know, way down on the ladder but I hear things now and then. Pick the reading topic most likely to get your attention, pocket foreclosures, the risk of deleveraging, shorts, jumping treasurer notices, exponential increases in institutional buyers at the residential level, and so on, and so forth. If PAVE actually wanted to help Amercian consumers, they’d put a stop to all of it, but they don’t. The political theater which is PAVE is just another conduit to distribute new grant and non profit money, buying favors and garnering kickbacks through one fashion or another.

    They know the problem has nothing to do with appraisal bias, how could they not? Well, don’t give them too much credit but still, anyone telling you with a straight face the problem with housing markets and generational wealth gaps being the appraiser valuators fault, is either incredibly ignorant or is outright lying. If we’re dealing with the fictitious representation of the appraisal management industry, go with ignorant. If we’re dealing with the politicians, their partner 501c’s, or our own side trade groups like TAF, just go with lying. And that’s why they want you and your mind tied up in a defensive posture, so you don’t actually behave like a well informed professional in the field of real property valuation. As if the details of an appraisers individual appraisal development have anything to do with this, because it does not.

  6. Avatar Frank Wilson says:

    This is why they want PAREA. Get people with no skin in the game to facilitate the unethical products for $25 a pop until they lose their license… then move onto the next crop. E&O Insurance will refuse to insure them, government will call the insurance companies racist since PAREA will be mostly minorities. And the politicians, big banks, and AMCs keep doing whatever is necessary to make money until they crash the market and taxpayers pick up the tab.

    • Baggins Baggins says:
      PAREA explanation page.

      Do Mentors need to be licensed in individual states?
      No. An open door for exploitation. A mere 5 week course.
      ‘Unlike in most states, which only allows a supervisor to take on two appraiser trainees at a given time, there is no required mentor to participant ratio in the PAREA program.’
      Realty agents are already lining up. New industry motto; Price IS the same thing as value.

      Conveniently, the CG’s get to maintain their elite status. The AI is going to sell a lot more books.

      Investigative challenge; Find the inside connection to the educational providers whom are going to make a fortune.
      They are rendering the appraiser license to be on par with a flight attendant or massage therapist.

      • Avatar Mary says:

        How much are they paying Mentors. ? This is a train wreck waiting to happen.

        • Baggins Baggins says:

          Yeah Mary, that was my first question too. Read the details, there is no limit to how many students can ‘train’ under one mentor. Because it’s going to be like a professor in front of a classroom with interactive tools sort of deal, limitless participation potential. So instead we ask an alternative question; What will educational providers charge and how many educational avenue approvals will materialize? Obviously someone is on the inside track here.

          I’m going to challenge the system and see if I can get my genius 12 year old daughter a certified license. I’m not reading any rules on age limitations here… Probably my wife should be an appraiser too, she already knows all about it. PAREA = pay to play. I’ll have to look more thoroughly but theoretically people on the other side of the world can become accredited appraisers in the US, without having ever set foot on these soils under this new program.

          You know all that’s going to happen right? Every realty agent will pick up an appraisers license, and demographic make up won’t actually change. The people whom dreamed up this program really did not think it through very well. Welcome to real estate.

          • Avatar Frank Wilson says:

            I think they thought it through well, they just have different incentives. They want an endless supply of cheap rubber stampers. When they lose their license you just get the next PAREA crop.

          • I love it, get your daughter on board! All I know is this…..without a strong mentor I would never have been able to go out on my own. She realized and told me she was training her competition, but I never crossed that line, I purposely got my own clients and would never think of taking her clients. Plus you can write up a non compete with your clients if you mentor someone I would think. The fact that dozens or more can sit in a virtual classroom and think that they can go out on their own and be successful or more importantly a RELIABLE Appraiser which intended users can rely on is scarry. Plus they will fail because they get no training (which only comes from true mentors) on how to set up and sucessfully run a business: Marketing, Accounts Payable, Receivable, Selection of the Appraisal Software and how to use it, file development and retention, client relations, on and on…..NO way I would have done all of this without my mentor. I agree with someone who said here the PAREA Appraisers are going to be rubber stampers until lending crashes and burns. I will long since have been retired by then…Thank GOD. I hate to see a profession that I truly loved and respected go down the tubes based upon false media stories and NO due process or investigations or transparency into what actually happened!

    • Baggins Baggins says:

      Frank the best case scenario may indeed be EO insurers refusing PAREA certificate holders the same insurance. In fact, that’s just an excellent inspired comment. We should form a group letter, and adamantly request to all appraiser industry insurers, to set up a new distinctly separated insurance program for appraisers whom attained licensing through PAREA. I can see it now, every single know nothing telecom worker employed at amc’s, title companies, brokerages, every major realty organization, just everywhere, they’re all going to get company funded appraiser licensing classes as a regular working benefit. ASB is going to throw licenses around like candy and it’s going to create investigative back logs a mile long. Great idea.

  7. Retired Appraiser Retired Appraiser says:

    Boycott AMC’s twice? LMFAO Appraisers as a group never came within 000000000000000000000001 of a yoctometer of boycotting AMCs the first time around. This was the best joke I’ve heard all month.

  8. Avatar Mat says:

    Most of my business is non-AMC. The AMC’s I do work with clearly want the cheapest appraiser. Great article.


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Vote With Your Wallet. We Can’t Boycott the AMC Industry Twice

by Guest Author time to read: 3 min