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Editor’s Note: Getting paid- more evidence that meaningful AMC legislation at the state level is an appraiser’s best friend.
Appraisal Board Sanctions AMC for Late Payment
By Isaac Peck, Associate Editor
Getting paid by appraisal management companies (AMCs) in a timely fashion has long been a challenge for appraisers, who, in many cases, have been forced to wait months for their money. While several state boards have adopted “prompt pay” provisions into their appraisal regulations, it is rare for AMCs to face formal sanctions over late payments. In what many will view as a win for rank and file appraisers, the North Carolina Appraisal Board (NCAB) recently assessed a civil penalty against an AMC, Residential RealEstate Review, Inc., for its failure to comply with North Carolina regulations which require AMCs to pay appraisers within 30 days of the submission of the appraisal (N.C.G.S. 93E-2-4[d]).
The Investigation
The civil penalty originated from a complaint filed in December 2013 by an appraiser who claimed the AMC failed to pay within 30 days. After receiving the complaint, NCAB requested an audit of the AMC’s payments to North Carolina appraisers for the calendar year 2013. After examining Residential RealEstate Review’s payment schedules, NCAB discovered that out of 1,277 appraisal assignments in North Carolina that year, 74 of those payments were late- received later than the 30 day deadline.
On August 12, 2014, Residential RealEstate Review signed a Consent Order admitting to violating the North Carolina Appraiser’s Act by its failure to pay appraisers within 30 days and agreeing to pay a $1,000 fine. The penalty for subsequent violations can be as much as $25,000.
The Consent Order indicates that the findings of NCAB’s audit shows that every appraiser contracted by the AMC was paid within the calendar year, and all but two of the appraisers were paid within 40 days. While these findings do not paint too negative a picture of the AMC, the example set by NCAB’s sanction should serve as a warning for other AMC’s doing business in the state.
Working RE twice reached out to Residential RealEstate Review for comment, but no comments were received prior to publication.
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AMC Legislation
The North Carolina Appraiser’s Act is favorable to appraisers in a number of ways. It requires AMCs to carry a $25,000 bond to protect appraisers against AMC bankruptcies and non-performance; it requires every AMC to have a compliance manager on staff who is a Certified Real estate Appraiser, and it empowers the Board to “investigate or examine the books, accounts, records, and files of any registrant or other person relating to the complaint or matter under investigation” if the Board has reasonable grounds to believe an AMC has violated its regulations. Additionally, the Board also may issue subpoenas for people and documents in its investigations. NCAB’s ability to investigate the records of AMCs was likely crucial to uncovering Residential RealEstate Review’s late payments and solidifying the Consent Order.
According to Roberta Ouellette, North Carolina Assistant Attorney General and General Counsel for NCAB since 1995, the Board has issued 25 warning letters based on appraiser complaints, but this is the first civil penalty it has assessed. When asked why the Board chose to assess a civil penalty, instead of simply issuing a warning to the AMC, Oullette said that the number of times Residential RealEstate Review was late in paying appraisers was a deciding factor.
Ouellette said that NCAB’s audit of Residential RealEstate Review’s payment schedules is typical when dealing with complaints against AMCs. “It is a standard practice to request a spreadsheet of all appraisal orders in North Carolina (including transmittal and payment dates) when the Board receives a complaint against an AMC for nonpayment. At this point, we are asking for all of calendar year 2013 and the first six months of 2014,” reports Ouellette.
W-9 Dilemma
Complicating the AMC’s failure to pay appraisers on time is the federal requirement that companies collect W-9s from all their vendors. Businesses are required to file 1099s for every vendor that is paid over $600 in a year, and many companies make a practice of withholding payment until the W-9 is received from the vendor. In case involving the initial complaint filed against the AMC, the appraiser had not submitted a W-9 to the AMC and the payment was withheld on that basis, according to the AMC. However, of the 74 late payments that occurred during 2013, only 28 were late because the AMC did not have a current W-9.
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This means that even if missing W-9s was the cause of some late payments, there were at least 46 instances of late payments not related to the W-9 issue. The Consent Order specifically states that the AMC has “implemented new procedures to ensure that W-9 forms are received and that payment is made within 30 days.”
Prompt Pay Provisions
Many states have adopted “prompt pay” provisions similar to North Carolina’s, although the enforcement of such provisions varies by state. At the time of this writing, the following states have some form of “prompt pay” provision in their AMC regulations or statutes: AL, AZ, CT, MD, MO, MT, NM, OK, OR, TN, MS. Many appraisers have found that such requirements have had a positive effect on the timeliness of payments by AMCs. Such provisions also make it difficult for AMCs headed for bankruptcy to build up millions in unpaid fees to appraisers like Evaluation Solutions and AppraiserLoft.
While it is rare for AMCs to face penalties for late payments to appraisers, in July 2012 an Arizona judge fined AppraiserLoft $855,00 for 171 violations of failing to pay appraisers in a timely fashion. Unfortunately, AppraiserLoft had already declared bankruptcy so the fine serves only as a warning to other AMCs in the state.
Appraisers can be certain that this latest case in North Carolina will cause other AMCs to reexamine their payment policies.
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Part 1: Defining Market Value and Understanding the Impact of Concessions – Available for immediate download.
Part 2: Determining and Making the Adjustments for Concessions – Tuesday, Sept. 16th 10 – 11 a.m. PST
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We’re always listening: Send your story submission/idea to the Editor: dbrauner@orep.org.
by Angry Appraiser
I just got something in the mail saying that AMR Appraisals A.K.A. GOT Appraisals is filing for bankruptcy. Guess I’m not getting paid for that last assignment I did for them in August that they never paid for.
-by GOT TAKEN by GOT APPRAISALs
Got Appraisal stuck me for over $8000. Now that I am on there case they still come up with excuses. DON”T TAKE WORK FROM GOT APPRAISALS
-by GOT Appraisals Sucks
I just learned this as well. Luckily mine was only $400. GOT Appraisals is a trash company.
-by Michael
BEWARE OF THE AMC, AMR Appraisals Inc. dba GOT APPRAISALS. They do not pay appraisers. Look them up on Yelp and BBB. They have several complaints on file for non payment. I am currently seeking ways to get them to pay me and have them fined. I did an FHA appraisal for them in July 2017 but haven’t got paid and it’s now January 2018
-by Liz B.
Where do we report these AMC’s? Coester VMS is one who does not pay timely. They give you false info and say the checks were sent. When you tell them you never rcvd the checks they drag it out sending you a few at a time. They laugh at the collections letter from the lawyer. Their A/P supervisor never calls back. I’ve been trying to get paid since beginning of May. Any suggestions who I could call and report this? Or is it just futile?
-by Frank
Coester VMS owes me over $2,500.00. I knew they were bad and usually only had two or three invoices outstanding. I’m contacting the state to see about payment. It looks like Coester VMS/Brian is using $ from lenders/client for personal use. That sounds illegal. Am I responsible for the file for five years if I don’t get paid???
-by Amy
Same! Did you ever get payment from GOT? . Filing a report with FDIC tomorrow.They are six months out for payment with us! >:{ GOT also goes by ODIN Appraisals.
-by Shari Theodozio
HI Amy, Did you ever file a complaint? I need to do that as well. Any luck with getting anything from them?
-by Martin Cahn
Any Appraisers in Maryland not getting paid within 30 days by any AMC? Please let me know, we are meeting with law makes to change the laws in Maryland to mandate a Prompt Payment Act. Share any hardships slow paying AMC’s have caused you, this will help in getting the laws changed. Send to marty@mcappraisalsinc.com. Thank you,
-by Mark Radko
Marty, I am attempting to receive over $3,000 for 12 Reports done since March, 2018, from Atlantic1 in Miami, FL. I spoke with the Florida DBPR, however, they only apparently monitor Appraisers, I spoke to the Gov’t principal and she immediatley told me to get a LOCAL LAWYER in Florida, best yet – in Miami,as they do not go after these AMC’s apparently. That is very diffucllt and costly to impossible from a practical and ROI standpoint as I am in NJ and there is NO assurance they are even licnesed, in business at the stated address or will be forced to even pay me! This whole lack of accountability for fraudulent AMC’s is insane, although not totally unique, as I know of similar situations with fraudulent Contractor’s whom are very difficult to sue for recompense.
Mark R.
-by Liz B
Coester VMS is the AMC we are having trouble getting to pay us. They seem to laugh at the lawyer attempt. This guy has been reprimanded before and still continues to pay late. There are articles online about him. Why do they get to get away with this? Where is the protection for the appraiser who gets the job done. Why are AMC’s not held accountable. I was in the understanding that that is why they were put into place. But sadly they are owned by the banks that the government was supposed to be protecting us from.
-by Martin Cahn
write your congressman/woman; Insist that they word AMC regulations to include:(AMC MUST PAID APPRAISERS FOR COMPLETED ASSIGNMENTS WITHIN 30 DAYS OF SUBMISSION) This will keep AMC from holding the reports until they get around to reviewing and then asking for corrections 10, 15 or 20 days later, but then paying 30 days after your able to get the requested correction in.
-by Steve Turner
Sam, it’a alarming that a board member would make a comment like that, you’re suppose to be an impartial board member. We use Coester for all of our business and they’re the best AMC by far. I’d check your facts before making broad statements like ‘Lose clients” they’re by far the best AMC I’ve used
-by Michael
That has not been my experience. They have all the updated information for my company and still they will pay late. Always making excuses for late payment, I’m talking about months late. The last straw was a few months ago and I will not work them anymore. It’s just not worth it. Unfortunately we do not have a prompt pay law in CA so there is not much I can do.
-by eva weiland
What do we do get the prompt pay law in CA Eva
-by Annie Carroll
COESTER – FHA appraisal completed in March – they have yet to pay us. This company is the worst – I have been told the check is in the mail 3 times and obviously this is not the case. I went all the way to the top of the company with my complaint and I am told we will get payment by him and that still is not the case.
-by Samuel Cory Gore, NCAB Board Member
We Members of the NC Appraisal Board just fined Coester $10,000 for failure to pay within 30 days. This is reported to all of the States and a sanction such as this caused Coester to lose multiple Bank Clients. If you read our NC Appraisal Law and Rule you will see our other innovative measures we have instigated.
-by George Brooks
My problem with RRR was that they required the most recent version of the W – 9. I don’t know how often the IRS changes versions, at least once a year. So even if they have on on file they want THE MOST RECENT VERSION, BEFORE THEY PAY YOU.
-by Tim In Fla
Good Job for the appraisers in NC who pushed for reform and strict AMC regulation !! Unfortunately in my state regulations on banks and AMC’s are minimal. I have had fee’s just not paid and was told “sorry about that”. Filed complaint with the state and their reply was “sounds like a civil matter”. The current regulations state fees must be paid in a reasonable time frame. Uhhhh…that would be defined by who ? Forget C & R fee discussion. While other states are leading on this issue and already have enforcement in place my state just is too “business friendly” to attempt such a thing. Hell, we just added two more seats to the appraisal board. Those were for AMC’s. Great, not even another chair for the consumer ? Until their are changes in your state representatives, and maybe even in Washington, DC, this sad situation will continue. To much lobbyist money to fight. The typical real estate purchaser who is seeking a mortgage is no better protected now than during the great financial scam period. You actually could argue they these consumers are even more at risk now.
-by Kristine
By far, the slowest AMC to pay would have to be Imortgage Services. It takes at least two months to get paid.
-by Jaydee
If you want to be paid in a “timely” fashion. DONT work for Coester. I’ve use to have to wait 80-90 days to be paid. That is until I held an appraisal “ransom.” Was paid quickly. But also very quickly placed on their “Do Not Use” list. Until this morning when they came begging me to take one off their hands. I gleefully reminded them of their business practices and refused the work.
-by Brenda
I would like to order the FNMA book don’t be black balled or removed from list
-by Alan Snyder
I was assigned a drive by 2055 on 06/26/2014 from Transcontinental Valuation located in San Diego CA. I completed the report and submitted it on 07/01/2014. after 60 days I contacted then and was told they have a 90 day pay policy. I finally received my check on 09/08/2014.
-by Free Speech
AMC’s are nothing but extortion rackets and will only get worse as time goes on. Many are shadow corporations of lenders who simply can’t stand for appraisers to make a living. It should be illegal for anyone or any entity to take any part of an appraiser’s fee. If they want appraisal fees then they should get off of their lazy backsides get their own appraisal education and experience and go to work.
-by Jerry Morgan
AMCs are the work of the Devil with their only purpose being to Skim Appraiser’s fees… and should be totally eliminated. As a result of having them… almost no one under the age of fifty in the Appraisal field and almost no one new is entering the field. What happens when there are no Appraisers left.
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