AMCs have been around for a long time. The first AMC, LSI, started in the 1960s. Before HVCC, their market share was an estimated 10-15% of lender residential appraisals. There were relatively few AMCs. Now, there are an estimated over 400-500 AMCs.

I have been writing about AMCs in my paid Appraisal Today newsletter since soon after my first issue in June 1992. In the mid-1990s, when lender business crashed in many areas, some appraisers signed up for AMCs to get work. In those pre-Internet days, often specific forms software and transmission methods were required. Fees were lower than for direct lender work but were stable. There were no broadcast orders, shopping for low fees, or Scope Creep. When business picked up, few appraisers continued to work for them. In my area, there were a few larger appraisal companies who did all the work for specific AMCs.

Then HVCC came and most lenders shifted to AMCs to handle their appraisals. Now AMC market share is estimated at over 80%. Fees varied widely. Residential appraisal fees became sensitive to supply and demand. When business was slow, fees went down. When demand for appraisals is high, such as now, fees went up as many appraisers would not work for low fees. Many appraisers, like other business persons, were afraid to turn down work, even with low fees.

Lenders have always wanted fast turn times, to be more competitive and close their loans. Thus, AMCs push for faster turn times.

When working for direct lenders (and mortgage brokers prior to HVCC) appraisers could establish a reputation for accurate and good quality appraisals with their clients. This is still true today with those clients. However, this is not possible with AMCs who have multiple lender clients and ordering that is not done locally and is done by clerks not appraisers.

The greatest change is in the increasing Scope Creep, which has resulted in longer and longer appraisal reports and replying to many questions about appraisals. Unfortunately, much of the additional information does not affect value or make the appraisals more reliable.

Another significant factor is the widespread use of automated review software, including CU, which means that fewer and fewer licensed appraisers are used for reviews.

Even if you don’t work for AMCs, direct lenders are more “picky” but nothing like AMC requirements. Probably because they only manage appraisals for that lender.

Why has this happened? AMCs work for lenders. Lenders tell the AMCs what they want. I suspect that AMCs with multiple clients combine requests from different lenders into one very long engagement letter/list of requirements.

Everyone I have spoken with, from the lender side, says the recent mortgage crash caused lenders to be more concerned about residential appraisals. The previous crash in the late 1980s, the S&L failures, was caused by commercial property loans. There were some changes made to commercial appraisal requirements, but were minor compared with the changes in residential appraisal requirements post-HVCC.

Mortgage lending is a boom and bust business, starting with Fannie and Freddie in the 1970s. They purchased loans from lenders and made refinancing much easier. When interest rates are low, there are lots of loans. When rates are up, loans decline.

Mortgage lending is also boom and bust regarding risk of defaults. Prior to 2008, since the Great Depression, there had never been property value declines that affected the entire country. Statisticians working for lenders, investors, etc. only looked at their data from the past and did not worry about a national meltdown. So, none predicted it. This is, of course, the minus of using statistical data from the past.

What will happen in the future? We will return to the “typical” days of getting mortgage loans with loosened credit requirements. More and more homeowners will not be “underwater” and will be able to refinance. Will residential appraisal “requirements” loosen? No one knows as we have never had so many requirements that keep increasing. Lenders control the requirements. Until they decide that they are causing too many appraisers to quit, want to speed up their loan approval processes, etc. nothing will change. Residential AMC appraisal fees will continue to be cyclical, depending on supply and demand, similar to commercial appraisal fees as long as AMCs are managing appraisals. The less AMCs pay to appraisers, the higher their profits. Maybe lenders will step in and tell AMCs what they must pay their appraisers.

What about direct lenders? There is some scope creep, but not much as compared with AMCs. They don’t shop for the lowest fee. My advice to appraisers is to work for direct lenders whenever possible. Many appraisers with over 20 years of experience still get most of their work from them. When business is slow, they accept AMC work. Another option is to work for AMCs that work for one, or a few, lenders. Then the requirements will not be from a lot of different lenders.



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  1. Scope creep is one thing but my concern is report creep. When USPAP dropped the word Summary from the appraisal definition it opened the floodgates. Our reports are now Appraisal Reports which in effect is a Narrative Report. Lenders by way of FNMA can now demand and do want more in depth reporting on everything with supporting proof. We are now doing mini narratives but being held to Form Report fees. I don’t mind doing the extra work and as a result the reports are much better. However, I would like to be compensated fairly for the additional effort. We need to bring that topic up to the industry.

  2. AMC’s are useless in the appraisal profession. They are just box checkers and few are licensed appraisers who have any creditability to check our work. Amazing we allow this in the appraisal profession and allow them to make decisions on how much the appraiser gets paid. They don’t have to get a degree nor pass the tests and take continuing education and yet they are in charge of our income. Wake up lenders appraisers would do much better work and be happier if you only paid us the full fee that you charge the borrower. This is why in past years and now appraisers are quitting this business and few are getting their license.

  3. Ann – Thank you, again, for your insightful analysis of the AMC market & future. We have used your newsletters, reports, and other info to diversify over the past five years. It’s equivalent to investing in the stock market with mutual funds: Less risk & liability with a much more pleasant experience! Enjoying the non-dramatic rollercoaster ????

  4. The appraisal comments continue to grow. The time it takes me to acknowledge takes longer. You are right again when you say the AMC’s are adding things that don’t effect the value but just take more time. The direct lenders are few but maybe they will get fed up with the long drag times or turn downs and fix it. Chase Bank is so tricky to deal with I try not to deal with them by asking the AMC who the lender is before accepting. Chase puts out a 1004 full then you find out it’s a drive by. The other point you make is the fee a lot of appraisers are doing when they could be upping the fee, I can’t believe they do it.

  5. In your article you stated “I suspect that AMCs with multiple clients combine requests from different lenders into one very long engagement letter/list of requirements.”

    I can verify this, at least for one AMC. United Wholesale Mortgage is a large national player. They order through at least two AMCs, Class Appraisal and First Look Appraisal. I know this because I used to receive orders through both on a regular basis. On multiple orders over several months Class Appraisals scope of work was significantly longer than First Look, yet both name United Wholesale Mortgage as the lender. When I questioned a Class Appraisal gum-popper about this they indicated the probable cause was that they deal with multiple clients.

  6. This is America! Everyone wants to be the CEO of their very own enterprise! Hence, a new AMC pops up with regularity.

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