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.