Law firms begin addressing AMC fraud

[Mejappz]

Should be an open and shut case. But you can’t underestimate the power of the unethical, stakeholders and other various low lifes of questionable character who have played a part in creating this mess. They will protect their scam at all costs.

The genie is out of the bottle now. The AMCs can work with regulators to find a fair and just solution, or they may face millions in damages in court; it’s up to them.

 

[George Hatch]

For the life of me I don't understand why you guys don't target the lenders who use AMCs.

They're the ones who choose to use AMCs in the first place, and they're the ones who negotiate their contracts with the AMCs - pursuant to their own internal interests, and they're the ones who decide which appraisals they will and won't use. And how much they will and won't pay for the bundle that the AMCs sell.

Alternately, you could also target the banking regulators and Congress which have allowed the lenders to conduct business in this manner. Speaking of, maybe you guys should sic DOGE on these regulatory agencies. And the ASC, of course.

 

[The Bob]

Investigation Launched into Appraisal Fees and Appraisal Management Companies​

The rising costs of appraisals have caught the attention of Morgan & Morgan, a prominent law firm known for representing consumer interests. The firm is currently delving into potential misconduct by appraisal management companies (AMCs), which act as intermediaries between lenders and appraisers. Analysts in the mortgage industry have voiced concerns that AMCs may contribute to inflated appraisal fees by imposing additional layers of cost without necessarily enhancing the quality or accuracy of appraisals. There is a growing belief that the AMC business model prioritizes profit over fair evaluation practices, leading to greater expenses for consumers seeking mortgage loans or refinancing options. This investigation could bring to light questionable practices prevalent in the appraisal industry and their subsequent effects on homebuyers and homeowners alike.

The implications of the Morgan & Morgan investigation are significant, particularly in an environment of increasing home prices and rising interest rates. If evidence substantiating the claim that AMCs are artificially inflating costs is unveiled, it could prompt regulatory scrutiny and potential reforms within the appraisal management sector. Stakeholders, including real estate professionals, lenders, and advocacy groups, are closely monitoring the situation, as changes in AMC operations might lead to more transparent and fair appraisal processes. Furthermore, this inquiry could empower consumers by advocating for their rights against excessive charges in the mortgage process. The ongoing developments could fundamentally reshape how appraisals are conducted and pave the way for a more equitable landscape in the housing market.

**Key Elements:**
– **Morgan & Morgan’s Investigation:** The law firm is scrutinizing AMCs for their potential role in inflating appraisal costs.
– **AMC Business Model:** Concerns are raised about AMCs prioritizing profit, impacting appraisal quality and consumer costs.
– **Impact on Consumers:** The investigation highlights potential adverse effects on homebuyers and homeowners regarding mortgage affordability.
– **Regulatory Implications:** Findings could trigger regulatory oversight and reform within the appraisal management industry.
– **Consumer Advocacy:** The inquiry aims to empower consumers and promote fair appraisal practices in the mortgage process.

Investigation Launched into Appraisal Fees and Appraisal Management Companies - Note Servicing Center

Morgan & Morgan explores how appraisal management companies (AMCs) may impact appraisal costs, raising concerns for private lenders in the mortgage industry.

noteservicingcenter.com

LOL, my Gawd, imagine if Dewey, Cheatem and Howe is successful in rolling back the fees AMC's charge. Now instead of getting 1/2 of the $500-$700 fee (actual market value of an appraisal), you will get 1/2 of a lower fee. Winning!!

 

[George Hatch]

If there is cause to change the rules/regs then enacting such is a legitimate function of govt. In an ideal world it shouldn't cost anything to persuade govt to impose/enforce additional restrictions on lender conduct. Then nobody needs to go after any individual entities to seek the changes they want.

 

[glenn walker]

The ship sailed years ago and this I'd like the buggy whip and wagon builders in 1910 talking about stopping Henry Ford and the assembly line. Yes there really were some old appraiser types trying to get lawyers and wagon wheel companies and others to shut down the manufacturers and dealers. The biggest problem is if anyone was to be challenged it was the banks not the AMCs ...the original large AMCs were owned by the banks. Then spun off as seperate corporations. The appraisers lost any chance once the AMCs became independent.

 

[George Hatch]

I think when the appraisers lost is when the govt issued their interpretation of C&R in contradiction of the intent of the D-F reference.

If lenders were prohibited from using appraisals wherein the appraiser was paid less than C&R that would create a level playing field among the AMCs for the fees they could pay. That would greatly expedite their search for the bigger/better deal by removing one leg of the [quality-service-price] upon which all businesses compete. Sometimes referred to as "The Iron Triangle".



Then the lenders and the AMCs could focus on service+quality without regard for the price. There would still be winners and losers but the losers wouldn't be in any position to blame anyone other than themselves for losing business to their competitors.

 

[chad hampton]

The fight isn’t for everyone. Not everybody has what it takes. It’s OK if a few of you sit this one out if you’re not up for it. We won’t think any less of you.

 

[George Hatch]

IMO you can win this fight (and I hope you do). But I predict that if you do win it won't be from the direction you attempting to take.

It's OK if you don't have what it takes to mount a more intelligent approach to solve this problem. You can sit out the obviously more effective alternative if you're not up for it. I won't think any less of your passion or intent - just your logic and reasoning.

 

[glenn walker]

I think when the appraisers lost is when the govt issued their interpretation of C&R in contradiction to the intent of the D-F reference.

There never was a win or loss. The attorneys and the FTC knew there was never a law called Customary and Reasonable and that government had already created a Federal Minimum Wage Law in effect for over 60 years. Appraisers who were employees were already covered by Minimum Wage Laws and Independent Contractors AKA Fee appraisers had told and filed income taxes both Federal and State as being declared self employed owner operators. Therefore C&R was legally nothing and just a suggestion to AMCs. The appraisers few legal representatives had been either punked or pretended to their clients that C & R was some new labor law that was enforceable. As we all know C&R can and is used by AMCs but it brings down or lowers fees because it's never short of willing appraisers to keep up at lower fees being paid. With less and less practicing appraisers the fees are not going up and stuck mostly to fees collected 10 or 15 years ago.

 

[George Hatch]

Disagree. I think there's still hope for C&R. I just think it's far more expedient and more effective to go after the actual cause instead of the effect.

My guess is that if the AMCs weren't so afraid of antagonizing their clients they'd team up with the appraisers to support the different interpretation of C&R. After all, true C&R for everyone would benefit them, too. Unfortunately I don't see how the AMCs could get away with lining up against the lenders so that's not going to happen.

Nobody wants to engage with the point that the ONLY REASON the VA fees are so much higher is because those lenders are legally prohibited from paying less. And that prohibition does not prevent those lenders from doing those deals, so the lenders can't even say a true C&R is unfeasible.