Posts Tagged ‘local’

Out of State AMC’s Hurt Local Appraisers and Impact State and Local Economies

Monday, April 12th, 2010

What is an AMC? An Appraisal Management Company is the new “firewall” between lenders and appraisers implemented as a consequence of the Home Valuation Code of Conduct (HVCC) that went into effect earlier this year. The AMC is a middle-man thrown into the process that currently has little to no oversight and many do not fully understand the appraisal or lending industries. As a matter of fact, in many states, AMCs are not licensed or regulated and can operate from out-of-state. Because AMCs typically rely heavily on shaving a portion of the appraisal cost off of the appraiser’s established fee, these out-of-state AMCs are not only hurting the bottom lines of small appraisal businesses and independent appraisers, but ultimately harming our state revenues and local economies. In the past few years, there has been new lending, agent, and appraiser regulation in Washington State including loan originators to be licensed, appraisal and agent trainees to be licensed, and several consumer-based laws that have subsequently been implemented around these professions; the spirit of these laws (for the most part) was to have loan originators be licensed, not only as consumer protection, but also insuring that revenue from transactions occurring within Washington would stay within our state; thus, improving our economy.

From the rise of the AMC, new problems are born: for instance: an AMC located in Arizona or Canada can now benefit from a transaction here in Washington, taking taxable income from our state and our local appraisers and benefiting an out-of-state (or out-of-country) business that in turn, benefits their (not our) economy. Furthermore, AMCs are not required to have any level of education tied to this newly established business. Our state (WA) requires a college degree and continuing education for appraisers and initial and continuing education for real estate agents; the AMC can be operated by a high school student or drop-out. The bottom line is no license and / or regulation = no training / education necessary.

Many states have introduced AMC legislation and the federal government has been working on drafting similar laws. Until these laws are enacted, out-of-state AMCs can operate like vampires to our economy and independent appraisers. There are some locally operated AMCs that are struggling to gain market share among the AMCs used by the large banks; these are the ones I personally seek to work with. Is there still a fee taken from the appraiser? – Yes. But, not as much as the larger AMCs and, at the very least, I can be sure the revenue is being taxed and used within our own state economy.

Update: since this post was originally created, Washington State passed legislation to regulate AMCs; this is thanks to the hard work of the Appraiser’s Coalition of Washington (ACOW) and Stan Sidor. Although the legislation does not go as far as I and many other appraisers would have liked, it does address many of the largest issues including local and state revenues.

Politics at Their Worst!

Tuesday, April 6th, 2010

How many Washington state residents know about the “political window dressing” that Christine Gregoire is trying to pull down over their eyes? Well, I as a small business owner, certified appraiser, and local professional for over ten years in this state know that something stinks! I recently attended the Appraiser’s Coalition of Washington State Meeting at the “ACOW XI” and found out that even though our state’s Real Estate Appraiser Commission is 100% funded by the appraiser licensing fees already collected, that our Governor wants to remove the ONLY source of consumer protection that our state has in place for professional appraisal practices (as far as regulation)… WHY??? because the politics of appearing like government “trimming the fat” and attempting to dupe the public into believing our Governor is actually making real moves to balance an unbalanced budget (that went from balanced to unbalanced VERY quickly after taking office). It is important for EVERY VOTER and LEGISLATOR to understand that the removal of our only consumer protection regarding professional valuation services may end up on the “chopping block” for no sane reason at all – PERIOD! The reason is, plain and simple, a politician that is trying to “make appearances” of trimming down government…. But, remember, no funds for this organization come from the general fund…. so it makes NO sense at all.

Some of you might be thinking, “what about federal protection?” well, the newly adopted HVCC (Home Valuation Code of Conduct) WOULD have had some balance IF some original clauses would have been included – but (read my other posts) the final draft did not include some key safeguards and/or were never adopted; instead we are still waiting for an ” Independent Valuation Protection Agency”, a provision of the poorly implemented HVCC that has still yet to be established. – So – there really is no Federal protection right now because the big lending giants, FannieMae and FreddieMac have now been taken over by our government (instead of previously being Government Sponsored Entities – “GSE”s). To top that off, the “housing recovery” is also not working fast enough for those who really need it, so we need this type of consumer protection more than ever right now.

Do we really need to trim away an established and self-funded program that is not costing our government or tax payers any money (and no time)? Abolish a local agency that may be the ONLY protection in place at this time within our state?

I truly believe this is politics at their worst. I hope our legislature sees through this and preserves the only consumer protection we currently have surrounding these issues in our state.

Please do not let our governor make decisions for simple “window dressing” – the bottom line is that tax payers in our state deserve good protection – we have that – and what we already have is not costing our tax payers anything. Until we make new legislation, please help preserve the only safeguard we have. Please, talk to your legislator.