APPRAISAL MANAGEMENT COMPANIES - Dumbing down of customer service
Anyone who is in the real estate business as an agent or as a loan officer is familiar with appraisal management companies. AMC's as they are known came about when Andrew Cuomo of New York fame cut a deal to not prosecute for known appraisal fraud.
There is a great description of this in an old article by Teri Buhl in Implode O Meter, explaining how Cuomo agreed not to sue Fannie and Freddie for buying loans with known appraisal fraud if they stopped buying loans from banks who did not follow the home valuation code of conduct. (HVCC) Also banks could not own appraisers.
On paper that may have sounded good. Sadly while not suing Fannie and Freddie for KNOWN fraud HVCC became the law of the land. HVCC was revised to AIR (appraisal independence) at a later date.
Many of us accurately predicted there would be a shortage of appraisers due to this change and with requirements that one would need to become an appraiser stiffening. We are now in that phase of Cuomo's failure to prosecute the real criminals.
Besides a shortage of appraisers the other problem with the current method of ordering appraisals is that banks have never gotten out of the business of owning appraisers. Yes, they function under a different name, but many of the AMC's are owned by lenders.
Cuomo's actions did not fix the appraisal problem; it complicated it. Now lenders are hanging on to the profits and demanding little of the AMC's when it comes to service. They stand behind the wall of "we can't influence" vs having AMC's who care about customer service.
AMC's have distanced the consumer from the appraiser to the point that customer service is dumbed down. An order is placed through an AMC who uses their website for ordering the appraisal, no human contact. The AMC places the order through their website to appraisers, no human contact, who have a very liberal amount of time to determine if they want the assignment or not. If the assignment is not accepted then they move on to the next appraiser. If the appraisal is not delivered as promised, oh well.
When I say customer service is dumbed down, it seriously is dumbed down. Instead of an appraiser needing to perform to gain or keep business flowing, they simply can sign up with multiple AMC's, turn on the computer and download business when they want it. If they deliver great service or terrible service it doesn't matter they still will get business. Who among us has that convenience? Meanwhile the professional, most qualified appraisers saw a significant drop in business because their customer service is meaningless in the AMC setup.
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