AMC Model Legislation Proposed

Last week the Appraisal Institute announced draft legislation for states to regulate appraisal management companies (AMC). AI worked with the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers on this. Bill Garber, Director of Government and External Relations for AI explained that the language in the model is intended to give states the statutory authority to develop and implement registration requirements for AMCs operating in their states. Overall, the legislation:

•Requires the registration of AMCs operating in the state that order residential appraisals from independent appraisers;
•Prohibits AMCs from being owned by individuals who have had an appraiser license or certification denied, refused, cancelled or revoked;
•Requires the identification of a “controlling person” for each AMC;
•Requires AMCs to have systems in place to verify that they only utilize licensed or certified appraisers, and that all appraisals are in compliance with USPAP;
•Enacts requirements that ensure that appraisers are free from coercion or inappropriate influence from AMCs; and
•Provides for the adjudication of disputes between AMCs and independent appraisers.

AI is asking for comments and insight from the public. You can get a copy of the legislation here. Submit your thoughts on it to Scott DiBiasio of AI at 202-298-5593 or

  1. Helen

    It’s a start. The management companies are robbing the appraisers blind, taking 1/3 of the appraisal fee.

  2. Patty

    I have had good, bad and horrendous experiences with AMC’s, I had an experience with a new one out of CA, that informed me ” I tried to go for an appraisers license but after I found out how much time I had to put into it, we decided to start up an AMC, I did not get paid for the trip fee on the 1st and only request from them, but I did get called several nasty names from the kindergarden owner.

  3. Craig Stoll

    The link provided to view the legislation is not up!
    I want to know more about coercion from AMC’s.

  4. Jerome Nagy

    Sorry for the broken link – it should be working now. If not please let us know. Thanks.

  5. Carol

    I would like to see legislature make it mandatory for all AMC’s to accept ALL certified appraisers in good standing, not just the ones they want. Too many of us have been blackballed for not agreeing to make numbers. This needs to stop. We should not be denied work for being honest.

  6. Doug

    Some AMC’s are great to work for. I work for a number that pay reasonable fees, don’t expect ridiculous turn times, and actually review the appraisals for errors. That’s fine. They are rare. Others want to pay fees that are so low I might as well work at McDonalds. I’m afraid they are the norm and are going to drive many good appraisers out of business.

  7. Enrique Santos

    The AMC’s is a new form of slavery in the modern word. I do not know how appraisers like to be slaves.

  8. Ted

    I have been a real estate appraiser for over 30 Years. I also currently own and manage an AMC. The fees on our Commercial work is bid to 3 appraisers who are on the approved list of the Lender or client. The residential work is assigned based on a rotation of the appraisers that also are on the Lenders approved list. Competitive bids are required, typical of your locale. Our fees for the service that we provide are paid from the lender, not the appraiser. Maybe it is time for the appraisers to stop worrying so much about fees and be more concerned about the quality of their work product. Some of the work we have reviewed the appraisers should have been working at McDonalds. We as appraisers need to stop winning. The days of high fees are over for some time to come. Change is inevitable and constantly occurring. It’s how you change your thinking and business model that will help you survive. I also embrace the legislation for states to regulate appraisal management companies (AMC). It will make for better business for all concerned.
    Ted Hofferber, Consultant
    Managing Member
    B & T Real Estate Consultants, LLC
    700 11th Street South, Suite 201
    Naples, FL 34102

  9. Darrell

    If they must be allowed to operate they should be regulated as much as the certified apprisers in each state. Also I agree that they should use ALL certified appraisers instead of the ones they have alright got scared into hitting the numbers that they will continue to use on every appraisal. I was told just a few months ago that they (AMC) would see that I would never get another request from them because I refused to accept an assignment with a 12 hour turn around at 6pm on a Friday. I got an AMC request last week for less than half my normal fee and was told since I denied the assignment then I must not need money and would be removed from their list. If I could find a job that paid more than $6.75/hr I would get out of this after 20 years. I could at least have a pay check and not be threaten every time I remain honest. By not giving into them I will not last another year because even the local lenders are doing the same thing just to make a deal

  10. Joan

    Having been a residential appraiser for the past 22 years, the use of AMC’s has become a necesary evil, however, it is also a HUGE money making business, but not for the appraiser who has had their fees cut by 1/3 or more. I guess I would be less upset if the lower fees were transferred to the borrowers, but they are not. I have worked for one AMC for over 7 years and got a call from them requesting that I lower my FHA fee by 25% to “fit in” with all the other appraisers. This fee was set by them 7 years ago. I asked if the fee reduction was passed on to the consumer and got a laugh as a response. Getting $100 per order just to make a phone call (doubting that a legitimate review is completed on all appraisals sent) is absolute highway robbery borne by the struggling appraiser.

  11. The AMC companies seem to recruit appraisers with less experience and accept lower fees. Some states may have issued licenses to unqualified people who then trained others. The lender approved appraiser list should be eliminated, what qualifications are required? Does a friend or relative of a loan officer qualify an appraiser? What happened to the days when a designation or membership in a professional appraisal orginazation was important for education & qualifications.I have been an appraiser for over 30 years and will not accept an assignment from an AMC unless my normal fee is paid.As for the comment from B&T consultants, when were fees ever to high? In this economic environment no fee is to high for a quality report.

  12. Ronald Keeler

    Hey guys, I’m with you about the fees. I just can’t bring myself to go back to the fee’s I was charging in the 70’s and 80’s. I won’t accept an assignment from most AMC’s for jsut that reason, I just can’t justify it. But as I read these threads, if your analytical skills are commnsurate with your spelling, we are all in trouble, that includes the AMC writer too. Come on guys, we are supposed to be professionals. If you are going to write a thread, don’t make yourself look dumb by composing something which doesn’t follow a thought pattern or the spelling is terrible. When I review a report with similar spelling or continuity problems like I see in these threads, I do wonder about the author’s ability and professionalism. Why would they put such an ugly product out there and then sign their name to it. Aaagh! Be professional, have the guts to say no to low fees and unscrupulous vendors, and proofread your blogs, or find something else to do.

  13. Earl Watrous

    Requiring AMC’s to distribute work to independent appraisers will drive at least 50% of us to seek other professions. AMC’s take 33-50% of the fee and usually the fee is reduced to begin with. I never get trip fees and wait almost 3 weeks to get paid as it is. Putting AMC’s in the drivers seat is equivalent to allowing DUI’s to drive.

  14. It’s time for appraisers to take back the appraisal business from the AMC’s. We need to form a national union of appraisers.

  15. My thoughts are thanks to The National Asssociation of Realtors for helping the appraisal industry. I am both an Appraiser and a Realtor in Birmingham, AL.
    I feel as though we are at a time in our lives that we need to pitch in help each other, regardless of the profession. I try to work closely with The Birmingham Association of Realtors and they return the favor.

  16. Kat

    In reply to Ted Hofferber with B&T Real Estate Consultants, LLC.
    A few of your statements point out what is really wrong with the AMC business model and why our industry has failed in its responsibility to protect consumer and the public good.
    You mention that you are seeing very poor work and yet your business model is based on assigning work to the lowest bidder. Do you realize the lowest bidder is handing these assignments out to the trainee’s or even “non trainee’s picture takers” which also do the inspection? They do! I can prove it, check Craig’s list! There was a recent advertisement by a local Appraiser hiring other Appraiser to inspect and write the report, but he was signing on the left as that was required by his clients. This is what happens when the work is awarded to the lowest bidder. The reports are preformed by unethical and or poorly trained “Appraisers”. It has gotten so bad, as you have testified, that the lenders are continuing to add required forms to Appraisal reports to force the Appraiser to provide the lender with a document that they can rely on and the information that should have been provided in the first place. Have you reviewed the new 1004MC page being put into effect?
    Perhaps the Banks business model of paying for the lowest common denominator is not paying off for them. Professional Appraisers have so many other avenues for employment that they will never be your kind of client. You award jobs to the lowest bidder and whine in the same paragraph that the quality is poor… DUH!
    Cheap, fast, and good  you choose which two.
    Kathleen M Bryce
    Fort Myers, FL

  17. Bill Abalos

    Right on Kathleen. My Appraiser’s Water Cooler Pal. I, like so many other appraisers have worked for the AMC’s only to be slapped in the face by their fee splits and attitudes. Any appraiser who defends an AMC,is just like Fredo and should be dealt with in the same manner. As far as the guy who wrote about proper spelling a minute ago, he has 2 typo’s. So much for not looking dumb.I guess he knows from personal experience. However, the main point here is that we need to stand up for one another as fellow appraisers. We need to organize nationwide and become 1 strong voice. Cesar Chavez did it with the farm workers. I have stood up against and challenged a few AMC’s. However, as only 1 person, it did not mean a thing. If we do not form a strong front as appraisers, the AMC’s will continue to keep their boots on our necks as they take the money out of our pockets.

  18. Anonymous

    It might also be a good idea to list the actual party and amount paid for the appraisal on the HUD1 and the public can see who is actually getting the money.

  19. Lou Munoz

    The best way for appraisers to elevate the profession is to simply, as individuals….refuse to accept pre-set fees from AMC’s and their kind, at any time and regardless of the promised volume. Such volume promises are nothing more than inducements to lull appraisers into on-going acquiescence to those entities viability.
    Standards and requirements are continually being raised and foisted onto appraisers. Appraisers bear the expense and burden of complying. But AMC’s and their kind could care less, and will continue to skim off revenue which righfully belongs to those appraisers who strive to fulfill and comply with the spirit and letter of what is required so long as appraisers continue to accept being exploited.
    An honest fee for a good product and a reasonable time to complete that work will by force, negate the supposed advantages for lenders going the AMC route. But it starts and depends on the competent and diligent practitioner to evaluate their best interest. And to stand firm.
    And the post about the days of high fees being at an end and change being inevitable is disengenous at best, and tripe at worst.
    Just say no, folks.
    Lou Munoz

  20. Phil Lewis

    The solution? Fewer appraisers. As long as the management companies can find someone to do their bidding for bottom dollar, there is no solution to what concerns us primarily—low fees. Requiring them to be supervised by State Boards is a good thing but it will not get us higher fees.

  21. Julie M.

    I agree that it is wrong that AMC’s go to the lowest bidder. I have 22 years of experience and I try and keep my fees very reasonable but still $90 or $100 for a full field review with multiple comps and heavy underwriting is ridiculous. My AMC’s are lucky they have me because it’s true that in most cases the lower bidder is probably the worst choice! My appraisal fees for non-AMC companies have not changed or have gone down over the last 12+ years so taking an additional hit from soley AMC assigned work is not easy to accept. They also rarely care if an appraiser is Certified which in my opinion should carry a little weight. It’s a sad time for the appraisers with true experience and knowledge to have to compete with the lowest bidder!

  22. Warren Clements

    AMC’s are just a cop-out for the lenders to distance themselves from the big pile of steaming goo that they created with in experianced LO’s and processors- There is no way I would want the liability now of being a AMC- there is going to be a time of reconing for the people that helped make a bad situation worse and all I can say is we sleep very well at night knowing our values were fair and honest!

  23. Colleen Patterson

    Fellow Experienced Certified Appraisers: Do not accept assignments from sub quality companies at sub quality practices and fees, and then whine and be shocked! By doing so, you allow them to exist. We know where their practices lead. I keep thinking the realities that flow from such processes will result in reform: dream on. If you have to change professions temporarily to survive, do so.

  24. Bob P

    Those who will survive this current mess are those who band together and say “NO” to management companies. They are into it for only one thing.$$$$$. With no risk or liability and yet take half the fee is an absolute joke. I’ve worked to hard over the years to establish a clientele that appreciates extensive research and ” It is what it is values”. They understand,accept and we move on. I refuse to have to deal with an incompetent middle management companies that are clueless in markets that they have no familiarity with. I would have to agree with Bill and Colleen from prior blogs. If we don’t band together we might as well “get out the shovels”. I’m game and a willing certified appraiser from CT who is ready to do what it takes to stop these management companies from forming and operating in the State I live and work.

  25. Al D. Abbott

    AMCs that are not part of and whose employees are not working directly for a federally insured institution are performing appraisal review services for loan originators that their staff is not legally eligible to undertake in violation of USPAP. Additionally, where certified appraisers are in their employ, all of the state jurisdictions over which they review appraisals in are not necessarily states they have certifications or licenses in. Even where that is not the case, geographical competency is most often absent.
    The very nature of their work undertaken is at odds with and in violation of appraisal regulations promulgated by Title 11 of FIRREA. Similar to BPO’s being used as appraisals but being “labeled” as something else! Counterfeiting of capital value of real estate has got to end.

  26. susan j schulz

    Banding together is a great idea, but think of all the fees we pay now, and classes, then we want to add another for an appraiser association? ( by the way, people writing make spelling errors, they just don’t proof read, and slam the send button. Right now, as the new laws and rules come into affect in 2009, we will not get much work if we do not get work from an AMC. We would have to get the new laws and rules changed. So soon after they were implemented, especially with the federal government involved, would take years. Remember the S&L debacle, where the appraisers were blamed. We are, in effect getting blamed again, now. And our punishment-AMC’s.

  27. Richard Miller

    My opinion is from a Real Estate Broker/Appraiser Trainee perspecive. My thinking is from a State or Federal perspective that appraiser assignments must no longer involve loyalty to a financial institution the transaction needs to be completely arms length. And if that means that the appraisal assignments are like a roundrobin assignment to all appraisers in a State, so be it.
    I just spent a couple of weeks with appraisers completing my 2nd level of training, as a trainee, which included classroom with experienced appraisers and must say that they are a very honorable group of men and women. AMC’s seem to me just another way of keeping an appraiser from not being independent in his/her opinion of value.

  28. David

    In response to the above posted letter by Kathleen M Bryce
    You left out one thing when responding to Ted Hofferber. You failed to ask him why he has turned to doing AMC work when he is an appraiser. He more than likely had to because he didn’t like accepting appraisal orders from other AMCs for 1/2 of the going rate. I too was shocked as his failure to understand why he was getting poor reports. The people doing his work DO likely work at McDonalds on the side. What did he expect when he chose to bid out orders to the lowest bidder? A PhD in real estate perhaps?

  29. HVCC will see the light of day in 2009. If it passes in it’s current format it will ruin the appraisal profession. I am seeking residential appraisers who are interested in joining a class action lawsuit in the event that it is implemented. Call (859) 252-1000 and I’ll be happy to talk to you. If enough people are willing to join hands I assure you that you will receive at least partial compensation for the loss of your appraisal career.

  30. Tim in Florida

    A very simple solution to part of the AMC model. require appraisers disclose their data sources per addendum and be able to defend it. I see all to often appraisers stating they cover 10-12 counties and suck up as much AMC assignments as possible. However, in review I found that they, or their office, had no board membership in the local realtor board hence, NO MLS DATA. How was that absorption rate derived ? DOM ? The local realtors in my area ask the appraiser at the time of scheduling “Do you participate in our MLS ?” They will not bring comps and MLS data to the inspection anymore and they will not even provide access as they see this as a fiduciary duty to there seller to have a competent LOCAL appraiser complete the report. The borrower pays the fee anyhow. AMC would have to spread out some work and regulate some territory. I am surprised that any regulatory body has not made this mandantory. MLS Board membership is overhead and appraisers working without this primary data should be not be allowed to operate in areas they have limited data access.

  31. David

    I have been guilty of doing just what you complained about. Specifically; using tax data as opposed to MLS data in certain counties. Why? Because Realtors are too lazy to measure houses in their community. They use the pretense that they don’t want the liability so they don’t include square footage. It’s always been a joke to me. They include the measurements of every room on MLS but no gross living area. Doesn’t that increase their liability 5 – 20 times? They would rather measure and include 5 – 20 measurements (room sizes) and take on liability in case 1 or all are incorrect but they don’t want to be held responsible if they’re over GLA is incorrect. Not only does that not make sense…it screams to me as a buyer “I’ve been a Realtor for 20 years but I am too lazy to read a 15 page ANSI handbook to learn how to measure your home”. Until MLS data becomes accurate…I will continue to go into markets and use what I consider to be far superior data.

  32. Beth

    In response to Mr. Hofferber’s AMC and the attacks on the lowest bidder being assigned the appraisal. This pertains to commercial work where fees can vary considerably due to an appraisers work load. On residential assignments, we let the appraiser set the fee (within reason) and that is what the appraisers are paid. B&T only assigns work to licensed and qualified appraisers. The appraisers that we work with always compliment us on our standard of business. We do not take any portion of the fee from the appraiser. Our fees are paid by the borrower, like they should be. If you would like to know how an honest AMC operates, call us and talk to us. Our methodology tries to stand behind the appraisers, not rob them of their fees.

  33. I run an AMC and believe that there has to be some sort of legislation to increase appraiser fees. We take a large percentage of the appraisal fee and still have difficulty maintaining profitability.