Appraisers Outraged! End The Appraiser Payment Issue!

” I am owed $20,000.00″. “I am owed $2000.00”. “I am owed $500.00”. “I am owed $1500.00”. These are just some of the quotes pulled from various groups, message boards and forums from appraisers all over the country that are owed money for the appraisal services they provided. Services they provided for a Lender, Mortgage Company or Bank through an Appraisal Management Company or AMC as they are known.

What’s an Appraisal Management Company you ask? Well for those that do not know, AMCS have been around a long time. Appraisal management companies (AMC) are business entities that administer networks of independent appraisers to fulfill real estate appraisal assignments as Agents of the lenders. However it wasn’t until the financial crash of 2008 that they became a permanent fixture in the Real Estate Process due to the HVCC (Home Valuation Code of Conduct now known as DODD FRANK). They were installed as the “Middle Man” between appraisers and lenders to help insure Appraiser independence and manage the appraisal ordering process. Overnight many of these Amcs were formed and began entering into contracts with the lenders to perform the duties of managing the appraisal process as Agents of the Lenders. Notice how Agents is in Bold? I’ll explain shortly.

So now that we have that out of the way lets get into the real issue here. Appraisers are being left unpaid by Appraisal Management Companies and it’s an outrageous, painful and terrible result of poor legislation and regulation. I will compare this to the recent Government shutdown. The outrage of federal workers not getting paid. The outrage of them not being able to pay bills. The outrage of how could this happen. It’s nice to see all the outrage over this but where is the outrage over appraisers being owed money and not being able to pay bills? Exactly. There is none because no one knows about it. Let me give you some insight and maybe you too will have some outrage.

First lets go back in time.

2011 an AMC named Appraisal loft closed its doors unannounced owing appraisers Millions. The scramble began by appraisers to get their monies owed. Some appraisers were successful but most were not. In this case Lenders were collecting the fees from the borrower and passing them along to Appraisal Loft to pay the appraiser. But over time that didn’t happen and the doors closed leaving appraisers not paid for their time and services.

2012 an AMC named JVI Solutions closed its doors owing appraisers Thousands of Dollars. Once again appraisers scrambled to get their monies owed however only some were able to do so. In this case as well Lenders were collecting the fees from the borrower and passing them along to Appraisal Loft to pay the appraiser. Some appraisers sued the lenders that used JVI and one in particular won his case (no update on if he actually received the monies owed). However others were left without payments ever being made.

2013 an AMC named Evaluation Solutions filed bankruptcy thus leaving appraisers without payments. JP Morgan Chase was the largest client of Evaluation solutions and through a courts decision in Florida the Amc and Bank were absolved of all payments and liabilities to appraisers. Once again borrowers paid for appraisals to the Lender and the AMC failed to make those payments to appraisers.

2018. An AMC named CoesterVMS goes silent and leaves appraisers unpaid. Per numerous articles, web searches & message boards appraisers are owed thousands of dollars and hoping to get paid. According to other various articles, blogs and web searches, Coester VMS stopped responding to appraisers, was paying them late, owed payments from over 6 months and more and now is apparently out of business. Once again appraisers are scrambling to get paid. Many have called the lenders that used CoesterVMS and some lenders have paid up however most have not. Many Lenders as in the other examples state they already paid the AMC for services and are not responsible for any further payments.

There are a couple other AMCs that have ceased business between 2011 to now as well. Some have tried to settle with pennies on the dollar and some have just disappeared. Hell there are some that just rename themselves and continue to not pay appraisers.

Now let me explain this. Most states have AMC laws and regulate them. Many require an AMC to carry a Surety Bond in order to do business in that state. Some don’t. So referring back, one AMC had a surety bond in NC that was for $25,000. When it was announced that the AMC had canceled the surety bond, appraisers flocked to file against that bond for payments. Within a day or so the bond was exceeded. Yes $25,000.00 was exceeded in 1 state. Imagine the filings in other states since the company operated in all 50 states plus Puerto Rico.

So a question comes to mind. If these AMCs are doing this much business and handling this much money then why are they only required to carry a $25,000.00 Bond? A million seems more reasonable.

This brings me back to the beginning and the word Agent. As an independent appraiser I work for myself. I am considered an independent contractor. According to the laws and regulations an AMC works as an Agent of the lender. If they are acting as an Agent (they have a signed agreement), how come the Lender is not ultimately responsible for making sure the appraiser that their Agent obtained is paid properly and on time? Think about this for a minute. The borrower paid the Lender and the lender passed that payment to the AMC to pay the appraiser however no payment was made. Who would you hold accountable?

If the lender takes payment from the borrower and then passes it along to the AMC for the appraisal then shouldn’t the lender who hired this Agent make sure they are doing things correctly? I would think so. I’d like to know if my agents were doing things correctly representing me.

Now what can be done here? I have a couple thoughts:

  • The laws need to be redone to make all parties (Lenders/AMCs)responsible for paying the appraiser and in the event the AMC goes under the Lender takes full responsibility.
  • As discussed earlier, A Larger Surety Bond of at least $1,000,000.00 should be required.
  • Lenders pay the Appraiser their fee for the report and pay the AMC they hire a separate fee. Separate checks or transactions.
  • Escrow Accounts. Money is collected by the lender and put into an escrow account OR if the AMCs do collect money they take their fee and put the rest in escrow.
  • Do not let AMCs handle the appraisal fees. They should have nothing to do with collecting or paying appraisal fees.
  • Go back to the days when the actual borrower paid the appraiser at the door for the appraisal service. With technology today the appraiser can be paid quickly via many different payment options without having a 3rd party commingle in the process.

Enough is Enough. It’s time to change the way appraisers are paid for their services. With all the talk of technology and changing the way appraisals are performed one would think with said technology appraisers can be paid properly. It’s time make changes and that time is NOW!

**** all info regarding AMCs was researched via web searches, blogs, and other public articles*****.

AGA Is On Your Side

We have all seen the the commercials for Nationwide Insurance and that they are on your side. As real estate appraisers do we know who is really on our side?

There are so many organizations that represent appraisers. Many claim to help appraisers, many do help appraisers, many are out there to fight for appraisers, many offer education and many just want us to join them in their own agenda journey made up of false narrative and false promises. I’m not here to force you to join anything. I support the state coalitions and I also support the organizations that are willing to help appraisers even if I’m not a member. But there is one organization that puts YOU, the appraiser, at the front of the line every time. That organization is the American Guild of Appraisers or the AGA.

First lets get this out of the way. The AGA as many think is a Union. Well that’s not true. The true Fact is that the AGA is a Guild with Union affiliations. These affiliations allow the AGA to offer benefits, tools and resources to help support the appraiser and as the Guild grows so do the benefits of those union affiliations. Many big organizations that represent appraisers have the funds to do things the AGA cannot at this point in time. However the AGA does one thing most other organizations don’t and that is work for their appraiser members on a one on one basis and help them with issues such as: blacklists, getting paid, & state board complaints. Yes. All of these. The AGA works hard for YOU, the Appraiser. They don’t stop there. They even work on national issues in support of or not in support of issues pertaining to the Real Estate Appraisal Profession with other organizations to make a change.

To clarify more I personally say the AGA is like car insurance. Kinda like your E&O insurance but better. You pay car insurance just in case something happens for the year. If nothing happens you are at a piece of mind knowing you had it. But what happens when you get into an accident? The insurance company is there to help cover you. Well the AGA is the same way. You pay a fee for the year and if you get in trouble with a complaint, a blacklist, not getting paid etc, you now have the AGA there to work hard for you to help resolve this. Don’t believe me? Here is one member that was kind enough to write a review on the AGA:

Being a real estate appraiser can be challenging.  We don’t advocate for our “clients” which could be a bank, a homeowner or a potential buyer.  We advocate for public trust.  Yeah, try explaining that to most people who engage you for your services.  There are often times when an appraiser performs his or her job correctly that one party may be negatively affected by the outcome.  Of course, this is no new story to any of us.   Every appraiser has that little voice in the back of their head saying, “it’s not if, it’s when.”  When will that certified letter show up for your state board?  That’s right, somebody filed a formal complaint on you as an appraiser.  Of course, this type of thing can happen for many reasons, some of which are warranted, some of which are not.  Good news, you don’t have to be alone.

In mid-2018 I had one of these certified letters show up for the first time in my career.  My immediate reaction was stomach sickness, literally.  After the initial shock and review of the complaint, I took a breath and started tapping my resources on the best way to handle the situation.  I reached out to a few of my peers for guidance and was reminded that I was an active American Guild of Appraisers member, the AGA.  Once I contacted Jan Bellas, she very professionally ran me through the motions of what the AGA was going to do for me and how WE were going to handle the complaint.  This initial phone conversation was probably the most reassuring thing I have EVER heard in my appraisal career.  

Once I accepted the help from the AGA I was instructed to send the same information to her (Jan) that the state was requesting.  Within a few days the head appraiser of the review committee, Mike Ford, responded with a VERY detailed peer review letter of my appraisal, work file, and complaint associated.  I think the best part of working with Mike on my complaint was his brutally honest and matter-of-fact approach.  Some of you may know Mike, and if you do, you know what I am talking about.  I’m very confident if I were to have been I the wrong, he would have told me.  However, he STILL would have been in my corner to help me through my predicament; even if it meant telling me things I didn’t want to hear.  The good news for me was that I wasn’t in the wrong.  After only 2 months of the pending complaint being opened, the state notified me that no action against me was going to take place.  Those of you that have been through this know what kind of relief comes over one’s body when receiving this letter.

Ladies and gentlemen, I am not here to sell you on anything.  This organization does that on its own.  I am merely here to tell my story and how much the AGA made a difference for me.  If you have ever been in this situation you may know how alone and stranded you feel.  The AGA is not only fighting for the appraiser, they CARE about the appraiser and the appraisal industry. The process of working through my complaint with the AGA was invaluable, educational and REAL.  If you are looking to be a part of an organization that has your back or, if you make honest human errors that will work to mitigate ‘damage’ I highly recommend talking to an AGA representative.

(from *.K., TX)

This is only one example of many that illustrates the impact of the AGA.

I also was turned into the state board for a complaint that was dismissed due to the help of the AGA and while I was panicking and worried, I felt very good knowing that the AGA and the Peer review committee were up for the task. They exceeded my expectations and I was even given some pointers on my work by Mike Ford to help me going forward.

I really hope this blog explains the AGA more and that you will consider looking into becoming a member not just for you but to also be a part of an organization that will continue to fight for the real estate appraiser profession. For the cost of 1 appraisal per year you can know that the AGA is really on your side and working hard for you.

Change is only made if YOU and others want to make it. The AGA wants to make that change. Do you?