Law firms begin addressing AMC fraud

[Mejappz]

I wouldn't say the same, I can't imagine Trump's administration will continue PAVE and the DOJ probably won't lean in hard on phony appraisal bias cases in court.

The AMC has essentially taken on the role of a mortgage broker, and the situation is worse now for several reasons. For example, if you fail to meet their turnaround times and fee requirements, you risk being blacklisted from the AMC panel. They may not communicate this directly, but when your assignments suddenly decrease, the message is unmistakable.

We are in a situation reminiscent of the last real estate crash, when the collusion between mortgage brokers and appraisers went undetected for years, despite multiple warnings. Currently, we are facing a similar scenario, with alarms being ignored and some individuals still hoping for a different outcome, even in the face of overwhelming evidence.

At this point, it is challenging to differentiate between fraud and incompetence; what really matters is the "illusion" of compliance.

 

[Mejappz]

No one forcing appraiser to hit the number but if not, there will be "consequences" and pull back in future orders.

Right.

 

[George Hatch]

Can you show me the communication of some target value or the contingency by the AMC to the appraiser? If it's in that email chain then I must have missed it. Because that's where the violation would have occurred.

Not the only other way the appraiser could have become aware of the borrower's target value, but one *possibility* is if the appraiser asked the borrower or the borrower mentioned it to the appraiser. Both of which are pretty common in day-to-day appraisal practice.

Appraiser gets spooked, decides to avoid the ROV or the "biased appraiser" risk -as many of our members on this forum suggest - and decided on her own to withdraw from the assignment in order to reduce her exposure to getting sent into HUD.

I have no idea if that's happened or if the AMC included a contingency to their engagement or payment - either is possible. But someone knows what happened prior to this email chain. You might even know.

 

[Fernando]

The AMC has essentially taken on the role of a mortgage broker, and the situation is worse now for several reasons. For example, if you fail to meet their turnaround times and fee requirements, you risk being blacklisted from the AMC panel. They may not communicate this directly, but when your assignments suddenly decrease, the message is unmistakable.

We are in a situation reminiscent of the last real estate crash, when the collusion between mortgage brokers and appraisers went undetected for years, despite multiple warnings. Currently, we are facing a similar scenario, with alarms being ignored and some individuals still hoping for a different outcome, even in the face of overwhelming evidence.

At this point, it is challenging to differentiate between fraud and incompetence; what really matters is the "illusion" of compliance.

Appraisers who stay in the field for long run know how the game is played.
It's a balancing act in appeasing to the clients and staying true in coming up with "reasonable" appraised values.
Mortgage brokers could be reasoned with in that there's so much you can do with comps available.
With AMCs, they will find an abundant number of appraisers especially in tough times to get on their preferred list.
Last month, I got an order for an assignment 200 miles away. AMC said it knew it was far away from my area but the lender wanted more appraisers to consider the assignment. WTF.

 

[George Hatch]

For example, if you fail to meet their turnaround times and fee requirements, you risk being blacklisted from the AMC panel. They may not communicate this directly, but when your assignments suddenly decrease, the message is unmistakable.

The lenders do cut appraisers off for fee or service, but the message I get when that happens to me is that they don't like my fee or my service.

How about you? Surely even you are capable of making the distinction between a lender or AMC cutting an appraiser off for service or fee vs a lender or AMC cutting an appraiser off over not overvaluing properties. If they're just using fee/service as cover for "not lying for us" then that implies the appraiser's fees and service actually are in line with the rest of their panel and that the fee/service reason is blatantly untrue.

By definition, service or fee considerations are completely separate criteria than "not returning a desired value" in an appraisal. The former being just business but the latter of which is a serious violation of the ETHICS RULE.

 

[Mejappz]

Appraisers who stay in the field for long run know how the game is played.
It's a balancing act in appeasing to the clients and staying true in coming up with "reasonable" appraised values.
Mortgage brokers could be reasoned with in that there's so much you can do with comps available.
With AMCs, they will find an abundant number of appraisers especially in tough times to get on their preferred list.
Last month, I got an order for an assignment 200 miles away. AMC said it knew it was far away from my area but the lender wanted more appraisers to consider the assignment. WTF.

Mortgage brokers typically manage one or two clients at any given time. Larger Appraisal Management Companies (AMCs) have significant influence over orders from major national banks. If these AMCs decide to stop working with you due to not playing ball, the consequences can be quite severe. Remember, it's all about the illusion of compliance; everything else is secondary.

 

[Fernando]

Mortgage brokers typically manage one or two clients at any given time. Larger Appraisal Management Companies (AMCs) have significant influence over orders from major national banks. If these AMCs decide to stop working with you due to not playing ball, the consequences can be quite severe. Remember, it's all about the illusion of compliance; everything else is secondary.

Back in the old days, Mortgage Brokers were more loyal to appraisers.
If MB don't like appraisers, MB won't use them.
And if appraisers don't like sleazy MBs, they don't have to work with them. There were some honest MBs out there. I still have connections with them to this day.

 

[Mark K]

If the lawyers can find an angle then that's great. But whatever that angle is, it's been 15 years already and nobody has yet been able to identify it. And it hasn't been for lack of motivation to find that lever.

I'm more inclined to think that the shysters were simply waiting for the pool of 'victims' to get sufficiently large to make it worth their while.

 

[George Hatch]

Maybe

 

[Dublin ohio]

Mortgage brokers could be reasoned with in that there's so much you can do with comps available.

Wait...........What!