NAIHP Exposes AMC Tax Evasion / RESPA Violations

by MPA12 Feb 2012

AMC, AMCs, Tax evasion, mortgage, NAIHP

Washington, D.C. – February 13, 2012.   NAIHP recently discovered many Appraisal Management Companies (AMC’s), are operating without authority in most states and have failed to pay state income tax.

 
When businesses are formed, they are required to register with their Secretary of State, for authority to conduct business. That registration alerts the State Tax Department you exist and may be responsible for certain taxes. The same holds true if you operate outside your home state, according to Marc Savitt, NAIHP President.

 
“Most AMC’s are only registered in a handful of states, but operate nationwide. If you’re not registered, you’re not paying taxes,” said Savitt.

 
Although, HVCC and now Appraiser Independence rules don’t mandate the use of AMC’s, many banks and large lenders, who own all or part of certain AMC’s, require their usage by consumers. RESPA requires disclosure of these affiliated relationships. After polling NAIHP members in several states, “we haven’t found one AMC or any of their partners disclosing these affiliations. We’ve also discovered other RESPA violations as well,” said Savitt.

 
Consumers were told, Appraiser Independence rules were implemented to protect them. In reality, these rules have bred a rogue, unregulated middleman  industry that overcharges consumers, underpays licensed appraisers, contributes to the continuing depreciation of real estate values and appears to have evaded millions of dollars in state income tax.

 
Since these rules began almost three years ago, valuation fraud has increased over 50%, appraisal quality has decreased substantially and consumer costs have risen by almost 3 billion dollars.

COMMENTS

  • by Donna Corrado | 2/12/2012 2:32:52 AM

    My quality of work is excellent. No claims;violations and a stong E&O policy. As soon as AMC's flooded the market, I lost all my business and am barely hanging on. They take forever to pay if at all, and they treat us like garbage. They are insulting,threatening and should be put out of business. Another failed policy. We are a profession. We should be treated as educated professionals. That is why thousands of us are leaving the appraisal business. They order from whoever quotes the lowest fee and the fastest turn around time. They are intinidating;rude and basically don't know the business.They cause your reputation with the banks to sour.

  • by Marc Savitt | 2/12/2012 3:37:18 AM

    Donna: NAIHP understands the problem and is working to restore true appraiser independence. On January 26th, we met with CFPB Director Cordray. He understands the problem with AMC's and is working with us to make changes. AMC's are rogue, unregulated and harmful to professionals and consumers.

  • by Bill Burnett | 2/12/2012 5:01:32 AM

    Go back to the way it was prior to HVCC. This is just a new revenue source for the banks and the quality is inferior AND the consumer pays more. Don't fix things with HVCC, get rid of it!

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