Lawyers suing AMCs

[NC Appraising]

If the AMCs are all operating off the same limitations as each other then contributes to a more level playing field between them.

I think the assumption is subject to challenge that separating the fees in the disclosures will result in appraisers being paid the entirety of the amount formerly described as "appraisal fee" or whatever term they're currently using.

2025 disclosure:
"Appraisal fee of $700"

2026 disclosure:
"Appraisal fee of $300"
"AMC fee of $400"

The sum is the same, the split is the same, only the disclosure itself is different. Even if the borrowers push back on the amount of the AMC fee that doesn't mean they're going to agitate for an increase to the appraiser's fee. I believe most people outside the lending business already think appraisers get paid too much.

The change is for a cost plus system.

The problem now is that most lenders set a fixed price and AMCs have a incentive to find the appraiser with the lowest fee.

A cost plus model would force AMCs to be more competitive on their price with one another, thus reducing the cost to the borrower. Most lenders have 2-5 AMCs that they use.

Lastly, if the lender paid the appraisal fee and not the borrower, which system would they be more likely to select? Cost plus or the current AMC skimming scheme?

Due to the borrower not being able to pick the appraiser and shop for the best price, the cost plus model is the best model for the borrower. It potentially saves them money and increases the likelihood that the best appraiser was selected.