AMC Regulation to the Rescue?
by David Brauner, Editor

Take heart, change is on the way.
 
Legislation to regulate appraiser management companies (AMCs) has been signed into law in three states (UT, AR, NM) as of this writing and is being considered in many others. Appraiser “independence” legislation also has passed in a number of states this year.  

 
At the federal level, the Mortgage Reform and Anti-Predatory Lending Act of 2009 (H.R. 1728) passed the House in May. This Bill may prove to be the most salutary of all for appraisers. On the face of it, H.R.1728 promises good things for the profession. First, it seems to close a regulatory loophole- current law requires strict licensing and regulation of appraisers but not of AMCs, whose staff order, review and perform numerous other “appraisal” functions. Key provisions of this Bill include registration and a regulatory framework for AMCs.

Another extremely sore point for appraisers who work with AMCs is how appraisal fees are represented to the public. This Bill requires clear disclosure of which part of the fee is paid to appraisers and which part goes to appraisal “administration” (i.e., fees paid to appraisal management companies). Appraisers complain that consumers are getting ripped off by being charged an “appraisal fee” that is considerably more than the appraiser actually receives. The OREP/Working RE Survey shows 56 percent (56%) of appraisers answering “always” to the question: “Do you find that the ‘appraisal fee’ listed in closing documents is more than the fee you receive?” So far, only nine percent (9%) answer this question “never.”

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