After the HVCC implemented new rules in the middle of 2009, many appraisers realized they had to work with appraisal management companies they had ignored or avoided before that. Before the rules changed in 2009, appraisers tended to stay away from companies providing Appraisal Management Dallas Texas, or AMCs, and the bad reputations they had. However, with the change of rules, AMC's quickly became the major source of income for many appraisers.
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.
This has, in turn, led to many assignments being done poorly. Consequently, is has led to increased lender requirements for each assignment, to compensate for sending assignments to less-experienced appraisers that may not, as a matter of course, include as much supporting material and commentary as an experienced professional.
Quality Assurance/ Quality Control- Many of these firms also market themselves as a quality assurance and control layer, to scrutinize assessments for errors before being delivered to the lender. Some AMCs have automated QA/QC systems that require the appraiser to answer an additional set of questions before submitting an appraisal into the system.
You complete it in record time and send it back to the AMC. Unfortunately, the AMC has lost the appraisal (or reviewed and transposed numbers on the final value or any other scenario); the client loses their dream home valued at 2.5 million. They decide to sue. Because of the indemnity clause, it doesn't matter what the AMC did; you are responsible.
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.
The best form of protection an appraiser has is knowledge. Since word of the indemnity clause has circulated, a great number of AMCs have changed the contract to make it fairer for the appraiser. If an appraiser is careful, he or she can work with the AMC to utilize their services for a very comfortable income.
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.
This has, in turn, led to many assignments being done poorly. Consequently, is has led to increased lender requirements for each assignment, to compensate for sending assignments to less-experienced appraisers that may not, as a matter of course, include as much supporting material and commentary as an experienced professional.
Quality Assurance/ Quality Control- Many of these firms also market themselves as a quality assurance and control layer, to scrutinize assessments for errors before being delivered to the lender. Some AMCs have automated QA/QC systems that require the appraiser to answer an additional set of questions before submitting an appraisal into the system.
You complete it in record time and send it back to the AMC. Unfortunately, the AMC has lost the appraisal (or reviewed and transposed numbers on the final value or any other scenario); the client loses their dream home valued at 2.5 million. They decide to sue. Because of the indemnity clause, it doesn't matter what the AMC did; you are responsible.
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.
The best form of protection an appraiser has is knowledge. Since word of the indemnity clause has circulated, a great number of AMCs have changed the contract to make it fairer for the appraiser. If an appraiser is careful, he or she can work with the AMC to utilize their services for a very comfortable income.
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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