Law firms begin addressing AMC fraud

[Mejappz]

How is the borrower being fleeced? They are told upfront what the appraisal fee will be. Then, it is reported on the settlement statement. Is there a crime here?

The argument that borrowers aren’t being fleeced just because they’re told the appraisal fee upfront misses the bigger picture. Sure, the fee is disclosed, but that doesn’t mean it’s fair or reasonable. Many borrowers end up paying inflated fees because appraisal management companies) often pocket a large chunk of the fee while the actual appraiser receives a fraction. This isn’t just about the upfront disclosure—it’s about whether the borrower is being overcharged for a service that might not even be performed properly.

The lack of transparency around how fees are split is a huge problem. Borrowers often have no idea what portion is actually going to the appraiser and what’s being kept by the AMC, and this kind of opacity is a breeding ground for exploitation.

Add in the fact that some AMCs could be pushing borrowers toward specific appraisers or inflating fees for kickbacks, and you’re looking at unethical practices, if not outright predatory behavior. So, while it may not always be a crime, it’s still a shady business practice that leaves borrowers paying more than they should for questionable services.

Just because something’s disclosed doesn’t mean it’s fair or right.

 

[shrubberyvaluation]

The argument that borrowers aren’t being fleeced just because they’re told the appraisal fee upfront misses the bigger picture. Sure, the fee is disclosed, but that doesn’t mean it’s fair or reasonable. Many borrowers end up paying inflated fees because appraisal management companies) often pocket a large chunk of the fee while the actual appraiser receives a fraction. This isn’t just about the upfront disclosure—it’s about whether the borrower is being overcharged for a service that might not even be performed properly.

The lack of transparency around how fees are split is a huge problem. Borrowers often have no idea what portion is actually going to the appraiser and what’s being kept by the AMC, and this kind of opacity is a breeding ground for exploitation.

Add in the fact that some AMCs could be pushing borrowers toward specific appraisers or inflating fees for kickbacks, and you’re looking at unethical practices, if not outright predatory behavior. So, while it may not always be a crime, it’s still a shady business practice that leaves borrowers paying more than they should for questionable services.

Just because something’s disclosed doesn’t mean it’s fair or right.

There is a reason AMCs don't want appraisers to tell what fee they are getting.

The big swindle is when they are getting a hybrid, do they tell the borrower this? Oh and hybrid doesn't come in at value, so now you, the borrower, gotta pay more for the real appraisal.

And the AMC saying they can't find an appraiser because they have been shopping it for 2 weeks so they can keep over 50% of the fee.

How many times have you heard that the appraiser is taking forever when the AMC requires 24 hr turntime?

Whose interest is it in to delay the appraisal for weeks and then get a rushed report?

 

[Mejappz]

How is the borrower being fleeced? They are told upfront what the appraisal fee will be. Then, it is reported on the settlement statement. Is there a crime here?

Moreover If it's really not that big of a deal, then why do AMCs include clauses in their engagement letters specifically instructing appraisers *not* to discuss fees with the borrower? If everything’s above board, why go to such lengths to keep borrowers in the dark about what they’re actually paying for?

The truth is, there’s a reason why AMCs go to such great lengths to control the conversation about fees—it’s to protect their profit margins, not the borrower’s best interests. And when you look at how companies like REVVA aggressively push for fee breakdowns to stay hidden. If these companies were confident that their practices were fair and transparent, why the secrecy? The reality is that a lack of transparency in these fee structures benefits the middleman, not the borrower. By keeping the details hidden, they’re able to charge inflated fees without scrutiny. This isn’t just about making a profit; it’s about making a profit at the borrower’s expense, all while giving them just enough information to make it look legit.

As a former USPOOP instructor, I assume you embody ethics, transparency, and responsibility, right?

 

[Mejappz]

This issue will be settled either in the courts or through regulations. If I were the AMCs and lenders, I would want to be transparent and collaborate with the regulators. The first option can prove to be extremely costly.

 

[George Hatch]

The argument that borrowers aren’t being fleeced just because they’re told the appraisal fee upfront misses the bigger picture. Sure, the fee is disclosed, but that doesn’t mean it’s fair or reasonable. Many borrowers end up paying inflated fees because appraisal management companies) often pocket a large chunk of the fee while the actual appraiser receives a fraction. This isn’t just about the upfront disclosure—it’s about whether the borrower is being overcharged for a service that might not even be performed properly.

The lack of transparency around how fees are split is a huge problem. Borrowers often have no idea what portion is actually going to the appraiser and what’s being kept by the AMC, and this kind of opacity is a breeding ground for exploitation.

Add in the fact that some AMCs could be pushing borrowers toward specific appraisers or inflating fees for kickbacks, and you’re looking at unethical practices, if not outright predatory behavior. So, while it may not always be a crime, it’s still a shady business practice that leaves borrowers paying more than they should for questionable services.

Just because something’s disclosed doesn’t mean it’s fair or right.

The borrower picks the lender from among their various alternatives
The lender picks the AMC from among their various alternatives
The AMC picks the appraiser from among their various alternatives

Stop me when we get to the point where someone's choice on either side of that transaction is being forced upon them or misrepresented to them on the no-alternatives basis.

There might be exceptions, but normally the borrower has no relationship or even any communication with the AMC. There's no contractual relationship there for the AMC to abuse or cheat or defraud. How can you argue breach of contract or agreement where such doesn't exist?

About the most you could say is that the lender is lying-by-omission about the fee split to their client. But you're not talking about going after the lender for misrepresentation because you know they have the legal and financial means to win in court rather than to settle.

I get it. You want to attempt to lawfare the AMCs into oblivion regardless of the legitimacy of the legal arguments. Have at it. As long as you're not giving any money to the lawyers then you have nothing to lose.

 

[Surf Cat]

The borrower has no idea half his fee is not going to appraisal related services. Come on , that’s the very definition of being fleece. Your money goes somewhere where you don’t think it’s going to.

Not only that. The borrower has no idea they're not getting the most geographically competent, most experienced appraiser for their property. The borrower is getting the wet behind the ears, oh no the contract is not signed, what do I do appraiser.

I swear, this is the only industry I know that desires the least competent and least skilled. Being licensed and insured is one thing having the experience and skill set is another.

It's as if an AMC chose me for a rural assignment because I bid the lowest even though I don't know what the hell I'm doing... but I'll figure it out along the way.... instead of hiring Terrel or Dublin or any of you other rural appraisers on here to do the assignment properly. It's a money grab from the AMC, fleecing the borrower....

 

[Surf Cat]

The AMC model quashes the appraiser from seeking out continuing education to better themselves....... because it's not rewarded with higher fees.

As a matter of fact, the more knowledgeable appraiser is frowned upon because knowledge equals power. The AMC's want the newbie.... use this comp not that one, please change the lender and send back the report, don't worry about that, make the appraisal as is not subject to.

There's a reason I'm not on any AMC's rosters any longer. I'm here in California where there's an oversupply of appraisers. Appraisers willing to sacrifice their morals and ethics to get the job done and pay the bills.

It was so much easier to say no and set the mortgage broker straight. I'd go back to those days in a heartbeat.

 

[George Hatch]

Principle of Substitution. Its not just for home buyers.

 

[Mejappz]

Not only that. The borrower has no idea they're not getting the most geographically competent, most experienced appraiser for their property. The borrower is getting the wet behind the ears, oh no the contract is not signed, what do I do appraiser.

I swear, this is the only industry I know that desires the least competent and least skilled. Being licensed and insured is one thing having the experience and skill set is another.

It's as if an AMC chose me for a rural assignment because I bid the lowest even though I don't know what the hell I'm doing... but I'll figure it out along the way.... instead of hiring Terrel or Dublin or any of you other rural appraisers on here to do the assignment properly. It's a money grab from the AMC, fleecing the borrower....

Well, at least you understand, and I’m not surprised since you work in the field and the secondary market; you’re a sharp guy. By the way, has anyone noticed that TAF has removed the DEI page from its website? Trust me, I’ll be posting about this. The ongoing self-preserving corruption within the organization isn’t going to go unaddressed. Even though I was the one who reported them to the OMB.

https://appraisalfoundation.org/imis

 

[George Hatch]

So you were mad when they ran it under pressure from the Biden WH and now you're mad that they're not running it under pressure per the Trump WH?