I would like to relay a firsthand account of what kind of quality you might expect when you choose to work with AMC's:
A very large bank, in fact one of the largest BANK's in AMERICA, uses eAppraiseIt for appraisal management services. Now, I would agree that if you wanted to deter having the LO's pressure the appraisers, a firewall such as an nonaffiliated AMC just might be a good solution. The AMC orders the appraisal, the chosen appraiser does the best possible work (or at least what you might expect for a +/-$200 fee split), he/she sends it back to the AMC, and the AMC delivers the report to the lender (after stripping out any relevant information so that it can add it to its database to eventually put the appraiser out of business anyway, but that's another blog post). Simple process, fundamentally sound, right? But what if...
What if the subcontractor appraiser, working for his $200 split, could find people willing to do the work for even less? What if this subcontractor had built a pretty good business subcontracting it out again? What if he had somehow managed to get eAppraiseIt to believe he could handle any appraisal in a 5 hour radius, but actually was just subbing them out?
Well, I guess that if the AMC's are getting all of these quality appraisers to work for $200 each, the quality must get even better at 50% of that, right?
So to Chase and Wells Fargo and you other large lenders, remember that scenario when you are going through your defaulted loans in the next several years and wondering how it's possible that you have so many. I mean, you fixed the whole lender pressure thing, right? And got rid of all those greedy appraisers who were asking for full fees, right? And your AMC continues to provide you with appraisals done for the least amount of money and in the shortest amount of time, so how could these loans be so bad and the appraisals so far off?
Well, you might want to keep in mind that the person that did that crappy appraisal just might have worked for 8 hours to earn an $80 or $100 fee split off of the $200 fee split the AMC paid to the original vendor. So maybe $10 or $11 per hour? What is the starting pay at Burger King nowadays? At least you spend less on gas and get a free meal.
My housekeeper charges $25 per hour, I wonder if she is hiring...