Dallas Home Appraisals News and Information

A rare two blog day, but we're p****d.

So one of our clients let us know that a lender that they do a lot of business with has signed on with "AMC A" to order appraisals through.  If we want to continue to receive any of their work that goes to this lender, we will have to sign up with this AMC.

Yesterday we downloaded the application package and filled it out, signed it and returned it.  We need to keep our business going.  But the more we thought about it, the more we realized that this AMC is - even in the application process - applying subtle pressure to the appraiser to lower fees and commit to turn-times without ever seeing the assignment, and will be constantly under threat of being taken off the list for no reason and without warning. 

At the top of the services/fees page, it says that the "loan officer" will be presented with the list of approved appraisers and will select one based on "proximity to subject, bid and turn-time."  The page goes on to list each type of appraisal assignment and what the AMC believes is the "market rate" for each.  As an example, the "recommended" rate for a URAR is $240 - the same type of appraisal for which our fee is $350 (before any increase for adding the 1004MC).  The AMC does not reveal what fees they will charge the lender, and the appraiser is instructed not to include an invoice with the appraisal.  And isn't is against the rules for a "loan officer" to pick the appraiser?

Another page requires the appraiser to agree to certain provisions.  Among these is the statement that the "Provider may be removed from {AMC A'S}approved appraiser list at any time and for any reason without prior notification."

Now, just to review:  the HVCC came about as an agreement between the New York AG's office and Fannie Mae and Freddie Mac in which the AG would drop its' investigation into appraiser pressure by Washington Mutual on First American and eAppraiseIt loans going to Fannie and Freddie, with no findings of wrongdoing, if Fannie Mae and Freddie Mac would agree to the code.  Interestingly, First American and eAppraiseIt - who were shown in emails to have known that they were breaking the law by pressuring appraisers to inflate values or be taken off their list - have merged and are poised to benefit greatly as an AMC from the new regulations.

So our question is, how in the world can AMC A be deemed to be in compliance with the HVCC when they force the appraiser to bid for an assignment and agree to a turn-time before the appraiser has even seen the assignment, and when the appraiser is told that he/she can be removed from the list at any time for any reason without recourse.  Maybe there is no inherent pressure to "hit a number", that remains to be seen.  But there is certainly pressure in implying that the low bid that offers the fastest turn time without regard to the particulars of the assignment will get the job.  This AMC is taking over a third of the appraiser's normal fees, insisting on predetermined turn-times and expecting to receive quality reports?

We have also received emails from a couple of other AMC's asking appraiser's to do what are essentially "comp checks" for a slight fee.  Okay, we offer Restricted Use Desk Appraisals, no problem there.  We hope that this service will encourage lenders and brokers to use us for their appraisals, but we offer no guarantee as to the value that a full appraisal may reveal nor do we look for a guarantee that any particular appraisal will be subsequently ordered from us.  That is, in part, what keeps us USPAP compliant.  The AMC's however, very boldly offer in their emails that if we agree to provide these "comp checks" and the client then places an order, we will be first in line to receive the order.  What?  Isn't that exactly the kind of pressure the code was enacted to put a stop to? 

Last week we completed our first assignment for another AMC.  The fee was somewhat reasonable, maybe $50 less than we would normally charge.  The assignment was a field review for an appraisal in which, it turned out, the appraiser had omitted a number of prior sales that would have seriously reduced the value reached under the sales comparison analysis.  The research for the assignment took a full three days (the appraisal was over 2 years old).  On the plus side, the AMC was a pleasure to work with, always respectful in dealing with us, and seemed to understand when we had to ask for more time to complete the assignment (we'll see how understanding when we see if we're still on their list).  We'll see how respectful when we see how long it takes to receive payment.

We do not want to paint all AMC's with a broad brush.  But AMC A - referred to above - as well as the others who are dangling "comp checks" as a way to get more orders, do not seem to be very appraiser friendly, nor do they seem to be complying with the spirit of the HVCC.  But here is the real rub:  there is nobody to complain to.

The agreement calls for an agency, the Independent Valuation Protection Institute, to oversee implementation and compliance.  The funny thing is, the agency does not yet exist!  Oh wait, not so funny.  We contacted Fannie Mae to see who we could talk to about the practices of AMC A.  Talked to a really nice and sympathetic person who put us on hold and went to ask some questions.  Came back to let us know that Fannie Mae doesn't know who to direct complaints to, nobody in their office has oversight in this regard.  She suggested we contact the NY Attorney General's office, so we did.  Well, we tried.  After spending 15 minutes pushing buttons and still never getting to a live voice, or even a menu listing HVCC issues, we hung up.  We'll try again later, because we have not choice - this is our livelihood.

What a joke.