When the HVCC rules came into effect in mid-2009, appraisers learned quickly that working with Appraisal Management Companies (AMCs) wasn't an option, but a necessity. Although there are many small companies which are still adapting to such regulations, the larger companies were well prepared with their legal contracts and processing software to bring in and maintain thousands of appraisers nationwide. Unfortunately, some of the contracts only benefit the AMC and can be seriously detrimental to the appraiser. This article will explain the major flaws in Appraisal Management Dallas Texas contracts and what you can do to protect yourself.
Broadcasting of Low Fee Orders- In recent years, these companies have come under fire for broadcasting orders to many appraisers, seeking the lowest fee for servicing an order. Many experienced appraisers will not service these orders for such low fees. The result has been that many assessments are performed by less experienced appraisers who may not have enough business to decline the low-fee orders and still stay in business. Another result is that many seasoned real estate appraisal professionals have left the business as the low fees are insufficient to support the business expenses of running a small office of highly-trained professional staff.
Just as with any legally binding contract, there are stipulations to watch out for. These stipulations can include clauses that benefit the appraisal management companies and leave the appraiser holding the financial bag. If an appraiser is aware of these stipulations, he or she can protect him or herself and still use the AMCs as a viable source of income.
Take utmost care and caution when signing the contract with the company. Out of desperation to bring in more work, appraisers have been signing these contracts without even looking at them. Suppose you, as the appraiser, receive a job from an AMC you have already signed up and been approved with. You are the best appraiser in your area and perform the "perfect" evaluation.
Other AMCs have appraisers on staff to review the evaluation reports while others have individuals who are not trained appraisers reviewing evaluations for compliance with lender requirements. These activities often add several days between when an appraisal is delivered to the AMC, and when the AMC delivers the report to the lender. Technology Fees- In addition to taking a cut of the fee for an evaluation, many AMCs also change the appraiser a "technology fee" in order to receive an order.
In cases where the client suffers loss, it can result in a lawsuit, which falls squarely on the shoulders of the appraiser. Many appraisers are not financially prepared to cover the cost of such expensive lawsuits. For the appraisers that have E&O Insurance, they have coverage for any mistakes they made but will be completely responsible for any fees incurred by the appraisal management company.
As appraisers are getting wiser regarding the contracts they are signing, some AMCs have made changes to their contracts to make them fairer. Remember that it is mostly the largest AMC's that carry questionable contracts. Huge corporations, such as Wells Fargo or Bank of America that have big corporate lawyers are the ones causing the most damage. There are still hundreds of small AMC's, many that carry a simple one-page contract or none at all, that you can sign up with.
What are the Regulations for these companies? Most states have minimal regulations about these management companies, despite having significant regulatory control over banks and licensing control over appraisers. Some only require a small fee to register, and then the company can advertise for orders. There is no requirement for these companies to be owned, or staffed by licensed assessment or financial professionals.
Broadcasting of Low Fee Orders- In recent years, these companies have come under fire for broadcasting orders to many appraisers, seeking the lowest fee for servicing an order. Many experienced appraisers will not service these orders for such low fees. The result has been that many assessments are performed by less experienced appraisers who may not have enough business to decline the low-fee orders and still stay in business. Another result is that many seasoned real estate appraisal professionals have left the business as the low fees are insufficient to support the business expenses of running a small office of highly-trained professional staff.
Just as with any legally binding contract, there are stipulations to watch out for. These stipulations can include clauses that benefit the appraisal management companies and leave the appraiser holding the financial bag. If an appraiser is aware of these stipulations, he or she can protect him or herself and still use the AMCs as a viable source of income.
Take utmost care and caution when signing the contract with the company. Out of desperation to bring in more work, appraisers have been signing these contracts without even looking at them. Suppose you, as the appraiser, receive a job from an AMC you have already signed up and been approved with. You are the best appraiser in your area and perform the "perfect" evaluation.
Other AMCs have appraisers on staff to review the evaluation reports while others have individuals who are not trained appraisers reviewing evaluations for compliance with lender requirements. These activities often add several days between when an appraisal is delivered to the AMC, and when the AMC delivers the report to the lender. Technology Fees- In addition to taking a cut of the fee for an evaluation, many AMCs also change the appraiser a "technology fee" in order to receive an order.
In cases where the client suffers loss, it can result in a lawsuit, which falls squarely on the shoulders of the appraiser. Many appraisers are not financially prepared to cover the cost of such expensive lawsuits. For the appraisers that have E&O Insurance, they have coverage for any mistakes they made but will be completely responsible for any fees incurred by the appraisal management company.
As appraisers are getting wiser regarding the contracts they are signing, some AMCs have made changes to their contracts to make them fairer. Remember that it is mostly the largest AMC's that carry questionable contracts. Huge corporations, such as Wells Fargo or Bank of America that have big corporate lawyers are the ones causing the most damage. There are still hundreds of small AMC's, many that carry a simple one-page contract or none at all, that you can sign up with.
What are the Regulations for these companies? Most states have minimal regulations about these management companies, despite having significant regulatory control over banks and licensing control over appraisers. Some only require a small fee to register, and then the company can advertise for orders. There is no requirement for these companies to be owned, or staffed by licensed assessment or financial professionals.
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