Final AMC Rules for Appraisers

Buzz: Thank you for taking the time to speak with us about your upcoming webinar AMC Final Rules and the Impact on AppraisersCan you tell our readers a little bit about your history in the industry? 

Alan:  I’m proud to be the son of an appraiser!  I started when I was knee-high to dad holding the “dumb-end” of the tape measure.  Appraising is the only “real” job I’ve ever had since graduating from college some 30+ years ago.  As SVP and chief appraiser at Forsythe Appraisals, LLC I help both our clients and our 250+ w-2 employee staff appraisers navigate the numerous rules, regulations and policies that are in place to protect the public and make certain appraisals are completed in a credible manner.  I continue to enjoy participating on Boards of industry organizations as well as speaking and teaching on appraisal standards and methodologies.

Buzz: Why should appraisers be concerned with the release of the AMC Final Rules?

Alan:  AMCs are utilized as service providers to lenders in almost 70% of all mortgage transactions.  As an appraiser, it is important to know what regulatory requirements (and sometimes restrictions) your clients have to abide by so that you don’t inadvertently become implicated if someone else is not following the rules.  We’ll also discuss the types of transactions that fall under the Rules – spoiler alert, the Rule does not cover all appraisals.

Buzz: What are some of the topics you will cover in this webinar that will assist appraisers?

Alan:  A big one is the regulatory differentiation between AMCs and Appraisal Firms and which entities are covered by the rules.  Equally as important are the definitions around independent contractors and how the use of them may impact an entities classification as an AMC, and how AMC panels are defined.

Buzz: What happens if a state elects not to establish minimum AMC requirements?

Alan:  This will be discussed in some depth during the webinar – but the short story is, it is doubtful appraisals or commerce will stop in a state that does not have a program that meets the minimum requirements. 

Buzz: When working with AMCs, how should appraisers decide whom to do business with?

Alan:  All client engagements are a business decision.  Not all AMCs have the same model, thus interaction with them can greatly differ from the appraiser’s standpoint.  With that said, working with an entity that is not in compliance with applicable rules and regulations is likely a time bomb that I would suggest everyone shy away from.

Buzz: When is the deadline for States to establish AMCs minimum requirements?

Alan:  From the Federal Rule perspective, in order to provide specific and defined appraisal services States will be until August of 2018 to establish the minimum requirements, though an extension of up to 12 months beyond that date may be granted under certain circumstances.

Have any comments or would you like to submit content of your own? Email comments@appraisalbuzz.com.

Comments

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9 comments

  1. Avatar
    Retired Appraiser

    If your number is correct (AMCs capturing 70% of the entire mortgage market) the following numbers are most likely correct as well:

    Assume there are 75,000 residential appraisers left in the business (once 90,000)
    Assume the average appraiser does 5 assignments per week (poverty level for appraisers)
    Assume the AMC captures $200 per appraisal order (a low assumption)
    Assume that bank owned AMCs capture 60% of the entire mortgage market.

    Based on those numbers it becomes clear that AMCs owned by banks rake in over 2.3 BILLION DOLLARS from appraiser slave labor EACH YEAR with all AMCs generating over 4 BILLION DOLLARS in extortion fees from appraisers annually. Keep in mind this is based on a mere 5 assignments per week and a conservative $200 fee going to the AMC for each order.

    If this doesn’t make you think twice about walking away from the business to kill the golden goose nothing will.

    • Avatar
      Retired Appraiser

      Let’s take it one step further. That comes to nearly 25 BILLION DOLLARS worth of food stolen from the mouths of families support by appraisers. I find it unimaginable that appraisers can live with that figure and not boycott AMCs until they are forced out of business.

    • Avatar

      I disagree that 5 assignments a week is poverty level. If you work directly for the banks, the average fee paid is $400/appraisal. That is still $2000/week or $104,000/year. This is why I refuse to work for AMC’s. I average 5-8 appraisals a week and I make great money.

      • Avatar
        Retired Appraiser

        5 assignments per week from an AMC is most definitely poverty level for an appraiser with even a small family to support. Keep in mind that appraisers have far more expenses than your average business.

        A new appraiser might be bragging about getting $400 per order for an appraisal order but anyone that’s been in the business over six years would be ashamed to make such a claim.

        *Your work load per order has more than doubled (1004MC, UAD crap, and the CU DIY embalming kit)

        *Your liability per order has increased at least ten fold.

        I’m glad someone is happy churning out those $400 orders; otherwise we would be in one L of a fix.

      • Avatar

        That is a high assumption to average $400/ appraisal. In my area, I can guarantee that we do not average $400 an appraisal. I am lucky if I get 2 appraisals per month at that rate and my average is around 50 appraisals per month. Then when you do the math, even at $104,000 per year, you have to take into account expenses: software, hardware, E&O, licensing, education, vehicle, rent, employees, repairs, marketing, insurance, etc., etc. Once you have the net income, divide that by the number of hours and compare it to other professions that have the same requirements and you will find that although it isn’t poverty level, it cannot compete.

        • Avatar

          I am just a one man company and I work for zero AMC’s. I don’t have many expenses. I get a couple for $350, however most are $430-530/appraisal. I cover MD, PA and WV. MD gives me the lowest fees because everything is free online for public data. I start at $480 in other two states. I make decent money. Well over $100,000 per year. And I don’t have any extra stipulations to add in which is required of most AMC’s. If appraisers would boycott AMC’s, everyone would get these fees.

  2. Avatar

    I think your numbers are light because you have not accounted for the separate delivery fees that we get charged as appraisers. A la Mode recently sold its Mercury Network platform and disclosed within the press release that it oversees 20,000 transactions per day. When I’ve used the system in the past I have paid $13.75 per transaction. For this single platform that represents $275,000 per day or $100,375,000 taken from the appraisers per year. Although they will say they are not an AMC, if it looks like an AMC, smells like an AMC, and steals like an AMC, then it is.

    • Avatar
      Retired Appraiser

      That’s a great observation Bill. I didn’t even take platforms like the Mercury Network into account. The bottom line being that BILLIONS are stolen from the bank accounts of appraisers every single year and they still refuse to fight back.

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