The Biggest Snow Job of Your Life
Remember the saying “Pick two: fast, cheap or good. You can only have two of them?” Well you see, amcs got impatient and stopped reading after fast and cheap…
The concept is simple enough, a fire wall between the loan production staff and the appraiser to avoid any possible pressure, coercion or influence. It sounded like a good idea to many; hence the HVCC legislation passed and was enacted. This was a period of trial and error for so many and before anyone found their way, along came Mr. Dodd and Mr. Frank to give their official stamp of approval under the Dodd- Frank Legislation.
Are appraisal management companies fulfilling their intended purpose? Has the consumer benefited from their existence? What has been the impact on the appraisal profession? Is the appraiser still pressured to hit a number?
Let me be clear, the consumer has not benefited from appraisal management companies. In fact, due to the actions of the amcs, consumers are receiving a lower quality appraisal, delays and are paying more for appraisals. Order blasting, bid requests and shopping an assignment for days or a week to find the least expensive appraiser is the norm with amcs. The appraisal management company is not about competency, professionalism or qualifications. It is about fast and cheap. Remember the saying “Pick two: fast, cheap or good. You can only have two of them?” Well you see, amcs got impatient and stopped reading after fast and cheap.
Some appraisers will argue so and so amc is very good and I get my fee. I get it, you have bills to pay. But be honest with yourself, you have received the biggest snow job of your life. Amcs hire people, give them fancy titles and instruct them to con you into thinking you are important to them. It’s kind of like the pan handler that begs for loose change on the street corner and then gets into their expensive car to go to their million dollar home… It’s a con job people!
Recently there have been numerous posting of an inter-racial couple in Florida that has publically cried racism because the appraised value did not come in where expected. A second appraisal was ordered after removing all signs of race from the home and the value came in where anticipated. Now this story has been discredited as the women in the story is the VP, General Counsel for Black Knight and it was a publicity stunt to encourage automated values; but what if there was some truth to the story and the appraisal was ordered through an appraisal management company? Would the fast and cheap amc appraiser be a racist or just an unqualified appraiser? Has any appraisal management company ever asked an appraiser about their qualifications to appraise a certain property? Grant it, most amcs know absolutely nothing about a property. Many times they cannot even get the address or locality correct. Do the actions of the amc cause delays? Does this not snowball into buyers and sellers losing both time and money? How does the consumer benefit? They don’t.
What about appraisers? Have well qualified experienced appraisers embraced the con job of amcs? What about the newly licensed appraiser or trainee desperate to earn a living? Have amcs allowed those well qualified, experienced appraisers to bring on trainees to assist and train? That would be a big fat NO! Have amcs followed the Dodd Frank requirements of considering an appraisers experience in customary and reasonable fees? Again, that would be NO! According to the amcs whether you are licensed a day, a decade or century, your compensation is the same. That is in direct violation of Dodd Frank and most state statutes. What states have enforced this requirement?
The Fifth Circuit Court of Appeals just ruled they have no jurisdiction to intervene with the FTC fiasco against the Louisiana Real Estate Appraisers Board. The case with the FTC employed Administrative Law Judge presiding can continue. There is no way Louisiana can get a fair trial, but what has this strategic move initiated by REVAA done? It has put a stop to states enforcing customary and reasonable fee requirements. This angers me as the State Regulatory Boards are put in place to protect the public and by not enforcing the laws, consumers are harmed. My hat is off to Louisiana for doing right by its citizens. I am embarrassed and ashamed for the other 49 states for allowing themselves to be bullied by amcs and REVAA. Why has the National Association of Realtors not stepped up to the plate against the actions of amcs on behalf of Realtors and their clients? Agents are also negatively impacted by the actions of amcs.
It is a fact, appraisal management companies cannot exist without appraisers. We have already seen mergers, bankruptcies and appraisers being left unpaid. At what point do you say no more and take back your business, your profession and your integrity. Where is your “no more” point?
By By Milton P, Certified Residential Appraiser
amc’s are a joke like prostitues looking for a john …the larger question is who and what paid to propagate such perceptions of our profession?…
If you want to know what really happened to our profession, please read “Dispatches from the Cosmic Cobra Breeding Farm”, by Jeremy Bagott. It explains how USPAP got copyrighted by the Appraisal Foundation, and although it is government sanctioned, we have to pay for a copy of the law because TAF owns it. The Appraisal Institute wrote it as Standards of Professional Practice, and it morphed into USPAP, so now we pay to take this class and buy an electronic copy of the law every 2 years when we renew our licenses. They are a cobra breeding farm and you will learn all about that leach organization that was created to cheat a whole profession out of what we deserve as fair, professional fees for doing an unbiased valuation of property for what used to be a bank who kept the loan. Now that they sell loans in packages they don’t care about the quality of the appraisal and we are competing with realtors who think they are appraisers after a short course, and AVMs actually have credibility, thanks to the fake news by people who don’t appraise write. We lost control of our profession, and what makes me embarrassed and ashamed is that it took a British guy to research this problem and write this book. I haven’t seen anything this good about our profession, ever. Every day I think about the good old days when appraisers got respect for their education and experience. Licensing watered down the process. The AI is no longer serving its members and now we have AMC leeches all over our bodies, with the octopus TAF wrapping its tentacles all over that, and it is getting harder to just appraise, let alone follow the ugly politics that have crept into our profession. Of course they had to make up a story that was untrue to sully our reputations. We certify in each appraisal that we are non-biased and objective, and we carry insurance and pay for data that is crappy, and forms that suit the guys that generate the need for more mortgage securities. Well, they aren’t secure without our profession doing our jobs, and I would say most of the appraisers I have known were objective and not racially prejudiced. Yes, those were the old days. Now read this book and see what happened while you were appraising with handcuffs on your wrists, behind your back with USPAP on your neck! It is short and very well-written!
Has anyone checked out PAREA? This will drive down fees even further. The only way to stop this is a class-action lawsuit against all involved, including TAF. I would join the guild if they were able to get a Law Firm involved.
Agree 1000%! Great write-up Milton
Exactly what I have been saying.
“Recently there have been numerous posting of an inter-racial couple in Florida that has publically cried racism because the appraised value did not come in where expected. A second appraisal was ordered after removing all signs of race from the home and the value came in where anticipated. Now this story has been discredited as the women in the story is the VP, General Counsel for Black Knight and it was a publicity stunt to encourage automated values; but what if there was some truth to the story and the appraisal was ordered through an appraisal management company? Would the fast and cheap amc appraiser be a racist or just an unqualified appraiser?”
In all likelihood the second appraiser was pressured for value
Anybody have copies of both appraisals?
You also forgot to include how amcs take money, fail to pay appraisers and go out of business. How they have contracts with lenders so that they themselves collect the money from the borrower and since the lender didn’t touch the money the lender is off the hook when they go out of business. Along these lines the borrower is paying a premium to the AMC who they think is the actual appraisal company as well. Think of all the money not paid to appraisers from the likes of now out of business AMCS like appraisal loft, Coester and others. There are so many other things that are wrong with the current model the way it is especially when it comes to the fairy tale mythical being known as Customary and Reasonable fees etc.
But yet there are those amongst who coach the acceptance of the AMC model, and even more who drink the Kool-Aid of the same principle. As I’ve said many times before, AMC’s are like welfare, in that some may need them in the beginning, but when appraisers build a business off such an abusive structure, I have a real problem.
Question those who put profits before principle all while trying to point the finger away from themselves.
Go make up a value, change your password often, and remember to seek the truth.
The inter racial couple story crying racism is making rounds in different news outlets. It was covered on Good Morning America by Diane Sawyer’s report about Race in Real Estate. Because the louder the lie, the persistence of its dissemination, the more accepted the lie will be viewed as the (accepted) truth.
She says she is getting a refinance to pay off her loan sooner and get more equity out of her home. How is getting more equity out of her home going to help her pay off her loan sooner???
The only ‘perceived’ benefit of an amc is to the lender. The fee to the amc should be paid by the lender, not the consumer or taken from an appraisal fee. Does the consumer get charged if a lender uses a third party for escrow of taxes and insurance? No, they do not. The amc is no different. This would eliminate many of the issues there are now. Most lenders would bring back appraisal management in house.
It should be mentioned when the market tanks, these amcs will be history. They are going to be exposed to all the liability as they ordered, reviewed and paid the appraiser. Appraisers can easily redirect that attention.
At the end of the day there is an appraiser out there who will work for 100 bucks regardless of the fact that they could net more with less liability working at Amazon/Burger King. Just say no which, somehow always leads to the argument for AVM, part of which is that it results in higher fees to the consumer but they are paying the higher fee anyway, it is just not the appraiser who benefits. This train left the station in the 1990s and not one single trade organization to my knowledge has resisted. Another issue is the big shops who get the order, several a day, send out the trainee, or whoever, to do the inspection. They take the small fee, give some to the inspector, a little to the processor and pocket the rest. Pocket 100 a day x what maybe 10 deals and all good. My point here is that we have allowed this to go on and it will continue until the majority of appraisers just stop and demand just compensation for their work. Sadly my guess is that will not happen, all the old guard will retire and the AVM will become the norm. That my friends is exactly Corelogics business plan. Realtors, you are next, Corelogic/Zillow/Amazon or a new player will rollout a Nationwide MLS utilizing the UAD format, any licensed real estate agent/individual property owner can participate, and as have the appraisers, the RE agent will work for much lower fees but gladly accept the days pay. Good luck all, the business was fun and profitable while it lasted. P.S. when was your last order to Forms & Worms?
http://appraisersblogs.com/consolidated-analytics-amc-fined-4-appraisal-order-blast-violation#comment-30677
The coordinated abuse of appraisers by profiteering corporations continues. This is a fine example of well coordinated commercial scale racketeering and the infiltration of regulatory bodies by companies seeking biased judgments in their favor so they can continue the systematic dismantling and abuse of an entire industry consisting of over 80,000 actually licensed persons.
This effects everyone but there is adequate relief if appraisers simply refuse all amc orders and find better clients. The more appraisers that do that, the more lenders move back to direct assignment processes.
“What’s your fee and turn time?” Me: I don’t know. What’s YOURS?
It is irony that the appraiser, the person tasked with analyzing deals and sales, terms and conditions, to evaulate financial fairness, to stand up against some of the most aggressive sales persons in this country…. That that same appraiser person is unable to get around rinky dink nobody telecom based amc desk jockies who’s only sales pitch is what’s your fee and turn time. The amc industry has shaped up to be a safe haven for all the wash outs, remarkable. Amc appraisers should hang it up, they’re worthless from the beginning, never even made it out of the gate.