The Truth About Appraisal Management Companies

The appraisal industry has seen quite a few changes in the last year

. While some have hailed these changes as progress, others have protested them greatly. When the HVCC laws took effect, there were a large number of new appraisal management companies that opened. The numbers fluctuated, peaking and then dropping when many of these appraisal management companies were closed or bought out. The remaining appraisal management companies, or AMC's, are fully or partially owned by large banks and other lending institutions. This has caused some controversy, with much protest, because this is supposed to be a conflict of interest.

Appraisal management companies were started as independent, third-parties that were not to have a bias for one side are the other. If the appraisal management company is owned by the bank, some feel this would constitute a violation of the " independent, third-party".

Some feel that the current problems in the system stem from the bankers and lenders are allowed to own AMC's with a provision of there been two separate companies. Since these rules are not well defined, a bank or lender can actually have an appraisal management company in the same building as long as there is a wall between the work areas of the two separate companies. The rules regulating the type of division, or a legal definition of separation are vague in this area as well.

The separation between an appraisal management company and the banker or lender is there so that the lender or banker may not try to influence value with the appraiser. However, some feel these rulings are not regulated well enough to constitute a true separation between the two entities.

In while the legalities are being worked out, an appraiser still needs to make a living. An appraiser can choose to go with the larger AMC's. These companies to provide more work, but they offer lower commissions and require faster turnaround times. The smaller AMC's provide better benefits, but some cannot manage to stay in business. The benefits for the smaller AMC's include higher commission rates with longer turnaround times. Most appraisers do prefer the smaller companies for the commissions, turn times and the opportunity to work with other appraisers without undercutting jobs.

Appraisers working with AMC's have the option of signing up with several companies at one time. These can be the smaller companies, the larger companies or a mix of the two. However, most prefer the smaller companies due to the benefits they provide. Lists of AMCs can be found online.

Alternatively, an appraiser can choose to work with banks that offer loans that are not federally funded. These institutions are still able to order appraisals. There are also CPA's and local attorneys that deal with estate or personal issues.

The good news for practicing appraisers is that there is more room in the industry since the changes in regulations. Many older appraisers have left the business and newer appraisers are not signing up. This leaves room for those that still want to make their living as an appraiser.

by: Ann Williams

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