Appraisers Not to Disclose AMC Fee?
An appraiser/reader sends me this text from an XOME appraisal request:
Good Morning, The state of NY requires the appraiser to include their invoice in the report. AMC fee does not need disclosed. Please include an invoice in your report when uploading. Thank you”
This is technically accurate. Here is an excerpt from the NYS AMC Law:
38 (e) Knowingly fail to separately state the fees paid to an appraiser
39 for appraisal services and the fees charged by the appraisal management
40 company for services associated with the management of the appraisal
41 process to the client, borrower and any other payer.
39 for appraisal services and the fees charged by the appraisal management
40 company for services associated with the management of the appraisal
41 process to the client, borrower and any other payer.
Why would XOME go out of its way to tell their appraisers not to disclose the AMC portion of the fee the applicant paid? This is not a regulatory requirement that I am aware of. My firm includes our invoice at the top of the pdf and the pdf is locked (we don’t work with the XOME platform).
President & CEO at Miller Samuel Inc.
Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.
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2 reasons: 1) they don’t want consumer to know how little appraisers get 2) they don’t want appraisers to know how much the AMC gets (which may be more than what the appraiser gets).
As its required to include an invoice in the report with the new law, I would absolutely disclose at the time of inspection what my invoice is going to say. I’m sure 99% percent of the time the borrower can do some real time math and discover what the AMC spread is. The point is, the borrower needs to know weeks in advance versus getting a copy of the appraisal 3 days prior to the close of escrow and discovering the truth. We want the borrower to know they were lied to (appraisal fee is not the appraisal fee), we want them to question lender tactics, we want them to file legal complaints, we want to arm them with knowledge.
A few dozen complaints turns into a few hundred, a few hundred turns into a few thousands, a few thousand turns into class action and hopefully industry change.
We can all dream.
Seek the truth.
When I refinanced, I insisted all the way to the mortgage department manager, that because my CU used an amc, I wanted the appraiser to get a C&R compensation rate. The lender told me they were powerless to effect the amc’s engagement with the appraisers. The discount runner using CG appraiser did not mind the lower number, he captured the majority of the work load. There is no solution to unnecessary middle men. You either work with them or you don’t and there is no solution to the self inflected problems created by acceptance of their presence. Regulating unlicensed middle management is synonymous with regulating greed, it can’t be done. You either are a regulated individual with a personal license, or you’re protected by the company and are free to do what you want with no personal license to restrict your activity. States appear to be only capable of effectively regulating individuals and have so far been incapable of real time problem correction with regulation of large corporations. The bias against appraiser independence was solidified with separation from loan production mandates. Now that effectively regulated individually licensed people are no longer allowed to communicate directly… Effective oversight on both sides is now much more difficult.
PUBLIC TRUST!!!
How can the public trust you, if you hide the overages they are being charged????
And since I’m on that vein,
How can the public trust you are following USPAP, when your USPAP classes and education consist of FAQs, which are not USPAP, do not interpret USPAP, and do not set new USPAP standards?
I had to add this because I foresee a new FAQ coming in the next USPAP renewal, that you don’t have to disclose AMC fees.
Proactive.
1. I would not do any work for XOME period, (if I were still looking to do AMC work a all).
2. I would not work for ANY AMC that has a policy of hiding the fee charged for services. It is NOT my job to assist them in defrauding customers, nor covering up when they simply gouge them. The AMC fee is only part of the picture. A borrower may well pay $750 to $1,000+- and the AMC ‘only gets’ $550 to $650 out of which they may the appraiser $300 to $450. The lender is still gouging and using the appraisal as an excuse to pile on garbage fees.
3. You know that upload or processing fee some charge? Want to bet the borrower is also paying a processing or upload fees?
4. I conduct my business honestly. Sometimes disputes will arise and then I try my best to handle them honestly and reasonably (fairly) as well, but I will not knowingly participate in either AMC or lender schemes to screw their clients while blaming it on “appraisals”.
They charge a $9.99 fee technology fee upfront and then take out an additional $13 off of the check they mail you. Why would anyone work for them?
AppraisalPort (which is not an AMC) charges $30 to send the report. How about a la mode, you pay for the software, you pay for the Mercury Network and they still charge you even before you send the report.
It’s mission impossible for Alamode to erase the natural association between Mercury and Alamode, being developed by the same people, despite splitting and selling. Especially now that Corelogic bought both of those companies. We all knew that once Corelogic bought the one, they’d eventually get the other. We all knew the separation of the Alamode companies was a pr stunt to distance themselves from the betrayal of trust as Mercury retooled to advocate primarily for amc’s. Alamode is no longer run by appraisers for appraisers, has not been for a long time. It’s sort of sad to think about how portal fees for a static non adjusted already finalized simple software generated such an incredibly higher profit compared to the appraisal software tech itself. Portal fees are a racket through and through. Can you imagine paying 15+ dollars to send an email? That’s what we deal with and it’s become so common place, people no longer even blink. Initial hopeful expectations of portal fees had been $50+. Get ready for it. Betcha a pepsi that all of alamode & corelogic portal systems have been cracked and sniffed multiple times over and are not secure. How much confidence are we supposed to have in these supposedly advanced tech systems when they can’t offer simple options like allowing members to automatically reject amc orders, off panel bid requests, and refuse to share direct assignment lender lists? The majority of man power goes into counting dollars and answering phones, the tech development phase is long over.
I’ve done work for several AMCs who have specifically written in the engagement letter that you are not to disclose your fee to the homeowner. Hard not to be cynical.
Discussing with owner can be prohibited. Disclosing in an appraisal report cannot be. You are right to be cynical.
I also use it as a client screening tool. If they are willing to cheat the borrower on their fee why would I think they won’t cheat me too somewhere down the line?
Order taken in. Order request printed on a piece of paper. Paper stapled to manilla folder. Folder put on clip board. My fee and address of property are highlighted over. Inspection time. “Hi, this is me, here is my card, here is the order request the lender sent me.” Am I a criminal or somehow unethical for being honest? It’s important to remember that in America we have constitutional rights on both sides of any engagement. Both the worker and the consumer should not just expect, but rather should demand that private contracts and private engagements do not accept any notion that our rights are acceptable to abridge. When I pay the dollars, I insist on knowing where the dollars go. When I earn the dollars, I never keep billing a secret from those whom paid me. “Hi I’m the appraiser, working with a middle management company. Please open up your wallet, close your eyes, and I’ll be done in a jiffy.”
That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.
I never talk about the fee with the home owner if they are not my client. We all know how it works, some AMCs look for the lowest fee and fastest turn time. If they can get someone to do it for $300, they will charge the lender $700. So, they do not want your invoice in the report because the borrower would know that they got ripped off. Most lenders will just hide it in the closing cost. The lenders that I work for detest AMCs, they have paid the approved appraisers more just so they do not have to deal with AMCs. I have a broker friend who called me almost in tears, the AMC for the lender never ordered the appraisal and now after several weeks all of the dates in the contract were about to expire. I had her send the loan to a lender that I work for, the appraisal was finished in a few days and the loan closed the next week.
Why are they concerned? lol
we know why.
I JUST RECEIVED THIS ONE FROM Mercury Network I TOLD THEM THAT I DO NOT BID FOR WORK MY FEES ARE POSTED! ALL OF THE CAPS ABOUT THE INVOICE ARE FROM THEM.
Please try and keep updated with appointment time and date within 24 hours as well as daily status. Updated status as well as quality appraisals are considered for all future work with appraisers. Appraisals must be completed by the assigned appraiser, appraisals cannot be reassigned to other appraisers in your office. All appraisals require 3 closed sales, 1 pending and 1 listing. Minimum 3 interior photos required. 1004 MC forms required on all appraisals If you cannot accept the request, it must be declined. Appraiser must complete cost approach section Updated status for inspection dates or delayed status must be submitted to the website. If agreed due date is not met for any reason other then scheduling delays or client putting on hold a $75.00 late fee will be imposed to the appraiser. If carbon monoxide/smoke detectors or seismic straps for water heater are not present at the time of inspection and are required by the municipality, please make the report “subject to” and identify the deficiency. DO NOT INCLUDE AN INVOICE WITH THE REPORT – THIS DELAYS PROCESSING, YOU WILL BE REQUIRED TO REVISE THE REPORT AND REMOVE THE INVOICE, THIS DELAY WILL AFFECT YOUR OVERALL TURN TIME. At a minimum, the following items must be included in the final report: URAR (Form 1004 – UAD), 3 Subject Photos, 3 Comparable Sales, 3 Comparable Sale Photos, 2 Listings, 3 Listing Photos, Market Conditions Addendum (1004MC) Appraisal delivery format required (MISMO XML).
I wouldn’t even abbreviate for that one…
Dear XOME “KISS MY ASS!” Their asinine requirements warrant no other response-in my opinion. Not even for a $1,000 fee per job. $5,000? Nope. I could never trust a company that thinks they can penalize or charge-back for late delivery. CANNOT BE TRUSTED NOT TO CHEAT in other important aspects of an appraiser-AMC relationship.
I find their solicitation noted above so offensive, I went to their site to see what Asshats lead them. Once there I was sidetracked by THEIR AVM. See results here: https://www.xome.com/realestate/1956-fashion-ave-long-beach-ca-90810-131562580?hv=1
Now their low end of the range is only from 5% to 10% high; Their Xome value is one I could only achieve by using 1970’s style conniving and conning at about $100k above value – I know which comps would be used etc., but it would still be a high value. The high end of their range? Egregiously and recklessly wrong. IF it were ever done for a client that paid them money or depended on that result for any reason, then the egregiousness of their error is so bad I’d be thinking criminal prosecution rather than an honest mistake.
Confidence rating? An uproariously laughable 90%. I would be extremely hard-pressed to find a more incompetent company for anything having to do with real estate if their measure of quality and credibility is their own AVM!
Be sure to contact them and let them know how impressed any readers are with their service or their company. There is probably a good reason they aren’t listing principals names on their website. BTW WHERE exactly IS Chennai India anyway? https://www.xome.com/pages/about-us-1
Now Mercury allows amc’s or anyone for that matter to cold shotgun mail you bid requests labeled as order opportunities. The appraiser has no way of knowing how many other appraisers this is sent to. The only option to stop this behavior according to the pro amc advocates masquerading as customer service representatives at mercury, is to shut down all orders from companies not on your clients list. There is no way to simply deny non direct assignments or amc assignment requests. If you want to stop the abuse of the system by shotgun blasting amc’s, you have to shut the door for all lenders whom may send you random single direct assignment orders as well. Of course Mercury will share lists of amc’s with the appraisers but refuses to share lists of direct assignment lenders with appraisers. Mercury knows that if they published lists of direct assignment lenders whom use their system, they’d all be overwhelmed with appraiser applicants as the vast majority of appraisers would immediately seek the exits and market away from having to work with amc’s. Not like direct is that much better, we still have to work with abusive customer service reps whom seek to push the appraisers fee down for no good reason, pass lender pressure to us and we’re not allowed to answer that back, with the constant threat of being removed from active status or larger open order capacity if the appraiser even tries to stand up for themselves.
Separation from loan production has effectively crushed appraiser independence as we knew it.
XOME IS A PAIN IN THE ASS
“INVOICE: Amount paid by borrower $650. Amount paid to appraiser $400. Unaccounted funds paid by borrower $250.”
Xome can go screw themselves.
If every appraiser refused to work for any AMC for about six months they would become just a very fond memory. Do you think that mortgage brokers will forfeit their commission because they have to hire you directly? Do you think that Bank of the Galaxy will forfeit their commission because they have to hire you directly? THEY WILL NOT…they will hire you over and over and the AMC can suck a watermelon thru a water hose! The AMC is the pimp and you are the HO….just understand you went thru all of that bullshit just to work for an AMC clown! Stop it!
Applause, Applause and a standing ovation for Wayne.
Been a decade old song, that very few ever listened too.
But chose to whine about being stuck without work, instead.
So Xome doesn’t want you to include the invoice with the report. Instead they want you to attach it to the order profile. Talk about sneaking around the issue.
Can anyone in the NY area or knowing of this new law please point it out to me or show me where it states that the new law requires the invoice to be attached directly to the report that is being submitted?And if the invoice has to state that the appraiser get paid $ and the AMC gets paid $.
Tom you will never memorize the applicability of the law to you better than if you look it up for yourself. Heres a start:
https://www.millersamuel.com/breaking-the-new-york-state-amc-law-is-now-in-effect/ On this link you will find the exact language you are looking for. Also keep a copy of New York’s SB9080 (signed into law 12/28/2018) in your computer for future references and check all the wording out for yourself. Best, Mike Ford
NO ONE may legally prohibit you from indicating inside the report itself what you were paid for the appraisal. I’d argue that the no invoice requirement is a violation but they would counter it is for accounting purposes, SO just write on first line of appraisal report addendum in boldface type:
FEE: The appraiser fee for this assignment is $xxx.00 which has not yet been paid as of this submission date. They may NOT tell you what to put in or take out of an appraisal other than USPAP and special guideline requirements (unrelated to fee).
Then, of course, the next obvious question is why anyone would do any work for Xome in the first place? WHY do we as appraisers keep making excuses for bad behavior by flakey AMCs? Every AMC that seeks to deceive the borrowers by prohibiting fee disclosure to them is inherently dishonest. There are no exceptions to this.
Update April 2020: I was talking to an appraiser who is required to upload appraisal reports through Mercury network.
Not long ago, the upload fee was $16.50.
Now she tells me it’s $36. Client won’t permit appraiser to raise fees to cover increased cost. This is a direct lender, not an AMC.
It would make more sense for the lender-client to “pay” this upload fee as they can negotiate a lower fee, based on volume. A win-win for everybody. Except maybe Corelogic.
Glad not to be doing these myself. Nor, using Alamode.
My prediction: the upload fee will soon be $49.99. This sounds more like $40 than $50.
I just received one from MN the fee is $15.50. However I have to pay $30.00 with Appraisal Port. Both of the companies are owned by Core logic. With Alamode I pay for the software, I pay for MN and I pay to deliver the report. Now the Vault (Titan) fee has really gone up. Every time I turn around they want more.
Craig, are you looking for things to do? This OP is a year old already.
After today, I know we are able to collect unemployment, or get an SBA loan so why in the world would any appraiser not do that and then refuse any work from AMCs? I propose a complete strike and we will let them use zillow or whatever, because realtors are advertising they can tell you what your house is worth. They do a few clicks in the MLS and magically, they are an appraiser! What do they need experts for when these people will do it for free, and we know banks and FNMA and Freddie and the VA have forced us to use their antiquated forms and not given the appraiser the professional respect we deserve to do it on any format we want, as long as we adhere to USPAP. Well, they are going to water down USPAP, and they have increased appraisal licensing fees, and there are idiots out there teaching courses, all making a cut of what we used to make, just doing our jobs. Well, let them alone, don’t even respond to any bid requests because you can now make more on unemployment than you can being a whore for a pimp AMC. Why squander our collective power and then be responsible for the many lawsuits that will take your profession away from you if you don’t know what your are doing in a market that will: 1) not be open and competitive 2) prices are dropping 3) escrows are failing 4) nobody is going to open houses 6) nobody wants to inspect a property 7) investors are the only ones who will buy without seeing the property because they plan to rent it out, and if we can’t say the definition of market value statements are reflected in the transactions, well, we don’t know what the value is. period. let’s strike people!
Good luck with that strike thingy!
As a union organizer I can only say strikes are not usually the best way to solve disputes.