AMC purpose

[Dublin ohio]

Why would you think you cannot do that? I know multiple appraisers in Nashville who hold both individual appraiser credentials and AMC credentials. As noted many times, there are hundreds of AMCs and many of them are very small , operated by a single appraiser in a local market. One appraiser I have known for a very long time still does appraisals, but he also acts as an AMC for a local credit union.

I have a client that does just that and uses Mercury. He doesn't compete in my market. He is based in northern Ohio and I am in central Ohio. Only deals with a couple of lenders. Both of them are banks that happen to have branches in my market

 

[djd09]

They shouldn’t stop at being 2 of the 3 parties. Go for all 3.

they call that a waiver...

 

[chad hampton]

Just goes to show you how scam artists have taken over the profession. Failure of leadership at all levels to allow it.

 

[J Grant]

There is no argument as to what appraisers think the lenders "should" do. That was never in dispute. What is completely lacking in this running gunbattle are any suggestions or ideas on how coerce, force or otherwise manipulate these lenders into acting contrary to their own preferences. Contrary to what they perceive to be in their own best interests.

Speaking for myself (only) I freely admit that I have no idea how to force these lenders to do what we want them to do. After 15 years of this all of our complaints about their greed and avarice hasn't worked, leastwise not so far.

I wish I knew.
Since "doing the right thing" falls on deaf ears with the stakeholders... a lawsuit by a pitbull attorney wrt restraint of trade or a press release of how the lender's greed of their refusal to pay the AMC fee is decimating the profession wrt who is willing to work cheap which denies borrowers and investors the services of many competent appraisers. I imagine borrowers would be surprised to learn that their valuation is offered in a flea-market-style bid to the lowest-fee appraiser in order to kick back the maximum profit to an AMC.

I personally am AMC-free except for one lender-owned captive order AMC, but it cost me a lot to get there - and it always feels vulnerable. I am not social media savvy, so I am the wrong person for it, but the right person might be able to come up with an expose that goes viral. Only something attention-grabbing could change things at this point imo. The proof of it is that even with PAREA, they can barely attract people into the profession for the res lending side. Which is a shame.

Appraisers focus on the AMC's, but it is the lender's refusal to pay a cost for the AMC service that is at the heart of it. Lenders could pass the AMC cost on to the borrower, but they would rather not, as long as it can come off the backs of appraisers.

 

[George Hatch]

Since "doing the right thing" falls on deaf ears with the stakeholders... a lawsuit by a pitbull attorney wrt restraint of trade or a press release of how the lender's greed of their refusal to pay the AMC fee is decimating the profession wrt who is willing to work cheap which denies borrowers and investors the services of many competent appraisers. I imagine borrowers would be surprised to learn that their valuation is offered in a flea-market-style bid to the lowest-fee appraiser in order to kick back the maximum profit to an AMC.

You're supposed to click your heels together three times when you make a wish.

 

[Surf Cat]

One appraiser I have known for a very long time still does appraisals, but he also acts as an AMC for a local credit union.

I have a client that does just that and uses Mercury. He doesn't compete in my market. He is based in northern Ohio and I am in central Ohio. Only deals with a couple of lenders. Both of them are banks that happen to have branches in my market

The key distinction is that AMCs do not perform appraisals themselves; they manage the process through third-party appraisers.

 

[DWiley]

And you see no issues with that? How in the hell is that in the spirit and intent of AMC legislation?

But im not surprised you know guys like that.

You are the one who said it was fine to be both. You were the one who said it wasn't fair that you could not compete. I just pointed out that you can. There is nothing stopping you from competing as an AMC other than your choice not to.
And, using your owns words, how can you be against that?

Now you want to change the argument, after the error of your claim has been pointed out.

 

[chad hampton]

I said it was fine to be both? No, I believe in a three party system you have to have three parties. And you’re very much aware that what is going on now is not the intent of legislation. Or the wording of it for that matter.

If I ever said that it was perfectly fine for AMC to also be an appraisal company then I typed something wrong

So now for individual appraisers to compete in this market, we all have to go out and form our own AMC? That’s what you’re suggesting?

 

[DWiley]

I said it was fine to be both? No, I believe in a three party system you have to have three parties. And you’re very much aware that what is going on now is not the intent of legislation. Or the wording of it for that matter.

If I ever said that it was perfectly fine for AMC to also be an appraisal company then I typed something wrong

As has been pointed out several times, there is no requirement for three parties. A lender does not have to rely on any other party; they can just direct engage if they choose. The requirement is for separation from loan production, regardless of the number of parties.

As for what you said, I included what you said, and I did it with a screen grab to make sure it was exactly as posted.

 

[J Grant]

Chad, you walked into a trap. An appraiser can form an AMC and thus compete as an AMC and an appraiser, but that would entail great expense. And a small AMC struggles to successfully compete against large national foot print/connected politically AMC's.

The individual appraisers who work for an AMC are approved by the lender client. And there are cases where a lender uses both an AMC and a panel. But limting the discussion to lenders using an AMC, here is what it looks like :

Appraiser Chad is approved by lender X.
Lender X can accept an appraisal directly from appraiser Chad. It cost the lender nothing, since the appraisal fee is covered by the borrower

Lender X decides to switch to AMC called Zipfast. You sign up for the Zipfast panel. Now Zipfast offers your appraisal service to the lender, AND the review and admin service of Zipfast - at no additional cost to the lender, because your appraisal AND the Zipfast "payment" (their profit) is divided from the borrower covered fee ( the split ). In other words, when you worked directly for the lender, you made $600 from the $600 borroer covered fee. Today, when you accepted an order from that same lender through Zipfast, you made $300 from the borrower's covered fee, and Zipfast kept $300. It costs the lender nothing to get both you and the Zipfast service. (Even if the lender technically paid Zipfast, it did not cost the lender )

How can you compete with that? With extreme difficulty.

If the lender had to pay a separate hard cost to use Zipfast , then you could compete on a level playing field. If it costs the lender $100 additional per order to use the Zipfast AMC, the lender might decide to use you instead and do their own admin. This explains why the lenders and the AMC's fight tooth and nail to keep the fee split system because it offers the AMC's an unheard-of, unfair competitive advantage in other businesses. Every other professional service or business has to charge a cost to its customers.