BORROWER BEWARE…of Appraisal Management Companies

Mortgage and Lending with PS Mortgage Lending 305-791-4874 or 888-845-6630 365768




What is an Appraisal Management Company (or AMC)?

There is an appraisal code of conduct that all Lenders must follow, called the Home Valuation Code of Conduct (or HVCC).  Many lenders have created, or have an equitable interest in, AMCs as a way to profit off of the HVCC rules by forcing appraisals to be ordered through the AMC of their choice.  This is done at the borrower’s expense. 


AMCs get to keep more than half the money for the appraisal, and the actual appraiser doing all of the work gets the balance.  Most AMCs charge $400-$450 per appraisal, and the individual appraiser gets an average of $150-$200 for doing all the work.  The AMC simply profits the balance while not doing any work or even being a licensed appraisal company.  This has led to less than adequate appraisal reports.  Many individual appraisers refuse to join an AMC because of lack of payment equal to the job required. 


There is no licensing requirement to own an AMC!


The forced use of the AMCs by lenders is under tremendous public and private scrutiny.  It is being reviewed by the Government and HUD with the potential to remove the HVCC code completely from the reverse mortgage industry.   Most importantly, YOU as a homeowner can not even order your own appraisal other than for personal use.  It will not be accepted by any LENDER because it was not ordered by the Lender at an AMC of THEIR choosing. 



Little pay + No accountability = Bad finished product = low appraised value for the client, YOU



How are we different? We ARE the Lender!


We pick our appraisal system we want to use.  We are NOT forced into AMCs.  We maintain 100% compliance with the Home Valuation Code of Conduct.  HUD clearly specified in its Mortgagee Letter 2009-28 that, “FHA does not require the use of AMCs or other 3rd party organizations for appraisal ordering.


How do we order appraisals? Our advantage is your advantage!


We have a random rotation of appraisers that we have done business with in the past, they all provide superior service, and are all licensed and insured and fully HVCC compliant.  We have absolute trust that they will give our clients the actual value and best possible service that can be delivered.  WE DO NOT USE AMCs!  This provides a high level of local knowledge and work product, especially since all of the money you pay goes to the individual appraiser themselves. 


I feel that this will provide the best possible work product for you.  I have case studies and client testimonials that can confirm that the use of a non AMC appraisal will deliver better quality than lenders that require AMCs. 



How can you be sure this is true?  It’s all on the internet…


All of this can be researched online.  Just look for blogs or articles from Realtors, Appraisers, and Mortgage Professionals complaining about AMCs that have made their clients lose properties or mortgages.  The idea and concept of the AMC has been an incredibly disappointing change that is not required by HUD but being forced by the individual lenders.  This is single handedly hurting homeowners, like yourself, with unjust and sub par work product. 



Thank you for taking to time to learn more about how the process will work for you!


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Information and content in this blog is original to Phil Stevenson

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Phil Stevenson

PS Financial Services

Owner and Principal Mortgage Originator

Certified Reverse Mortgage Professional (CRMP)

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Cell: 888.845.6630

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Copyright © 2013 by Phil Stevenson & PS Financial Services, LLC


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Geertje Vanderwal

I so agree that the only one that profits from the AMC company's are the AMC them-self. When they started taking over  they were sending request for million plus property appraisals and wanting them done for $175. That is insane, as the time it takes, first a large home like that takes at least twice as long to inspect!

Then there are not as many sales in that range so more work the right comparable to justify the right and fair market value.

Fair meaning Fair to the home owner or purchaser and the financial company that will carry the mortgage.

Then there is the time involved in doing a larger more complicated appraisal as well as the increased liability issues for the Appraiser.

Such a property one to do the job correct and thoroughly would spend a couple days doing and would have normally gotten $1000.00 for now the AMC wants it done for $175.00 and a turn around time of 24 hours.

I worked hard for years and built a very large client base and was able to stay way from doing work for the AMC company's, but in time they became so strong with so many financial company's signing contracts with them that there were no more financial institutions not going thought the AMC"s

I ended up leaving the field, as I could not make a living at appraisal work any more with out going to a large company. Which meant the AMC gets the largest split of the fee first, then the Appraisal Firm I would work for, then the appraisal company I would work for would take a split, then I would get my split. Which would never be enough for the time required to do the job right and for the liability of the appraiser.

Remember in the end the one that gets the smallest part of the fee is th appraiser that takes all the liability for the appraisal report and value.

As the appraiser can be sued if the financial institute can not get its money back if the home owner should walk away from their mortgage( which most don't seem to care about , as in being the AMC that has no liability at all nor is their a concern by the financial institute to the appraisers liability.

When I got into the appraisal field , I was under the understanding that the home owner or purchaser has the right to pick any appraiser to be used as long as the appraiser is qualified, insured and in good standing with the Appraisal Institute they are a member with.

In most cases the appraisals done throught the AMC is never fair to the home owner as the appraiser has to put out so many appraisals so fast under the AMC time frame requriments in order to be able to make aliving. This leads to extremly poor Appraisal reports with unfair market values to the home owner.

The Appraisers are suffering under the AMC, but the home owners are paying for such poor quality and not getting full value for their homes when selling or refinancing. This is in the financial institutes interest as well, if the home is under valued they have a lower risk in financing it!!!!!!!

Bottom line is The home owner has so much to lose in this this AMC use practice by the financial institutions, as well as the appraiser and the only winners in this is the AMC and the financial institutions.

Geertje Vanderwal

Nov 05, 2010 02:35 AM #1
Phil Stevenson, CRMP
PS Mortgage Lending 305-791-4874 or 888-845-6630 - Miami, FL
"Mortgage Nerd" in Miami, Florida and Texas

Geertje, thank you very much for your input.  You hit it right on, and most borrowers don't realize the negative impact that AMCs have on their values.  I am sorry ot hear that this pushed you out fo the business.  I have no doubt that we lost a lot of quality appraisers with this issue.  Thanks!

Nov 05, 2010 03:00 AM #2
Retired Early

I left the appraisal business as well after spending 18 years of my life building a reliable firm.  We refused to surrender half our fees to fleabags (AMCs).  We also learned long ago that working for banks and attorneys was a losing proposition (low fees and slow to pay).

In my opinion the appraisal profession is heading down a one way street towards a solid wall of granite and we bailed out 2 months after HVCC took effect.  The form 1004MC in April 2009 was the first hint.  It created 1 to 2 hours more work on most orders and nobody was willing to pay for it.  The following month HVCC kicked in and our volume dropped from $12,000 per month to $600 per month.  Not exactly a business you want to ride out.

There are far better career opportunities out there for appaisers to chose from.  Real estate brokerage, ticket brokerage, real estate investment syndicate manager, etc.  I encourage any appraisers who are still out there taking a beating to throw in the towel and look around.  Dodd Frank is not going to save you on April 1, 2011.  AMCs may pay you a fair fee after that date (for both orders that they send to you) but 90% of the appraisal orders will go elsewhere.  Where will they go to?  To "outhouse appraisers"; the appraisers who have signed up to be staff appraisers for AMCs.  They're not exactly in house (since they never see the AMC's office) so I refer to them as "outhouse appraisers".  In exchange for doing 60 to 100 orders per month they have agreed to do appraisals for around $75 to $90 per order.

Aren't you glad you're an appraiser?

Mar 12, 2011 06:35 AM #3
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Phil Stevenson, CRMP

"Mortgage Nerd" in Miami, Florida and Texas
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