Costs of using Appraisal Management Companies
Well, well, well — looks like the appraisers’ little secret has been exposed, and it’s all thanks to a class action lawsuit that’s about to turn the whole game upside down. Enter Timmins v. Clear Capital, filed on November 1 in the Superior Court of California (because, really, where else would this drama unfold?). The lawsuit goes after Clear Capital, Core Valuation Management, and Rocket Mortgage for their masterclass in overcharging — inflating appraisal fees to line their pockets while making sure you, the unsuspecting borrower, get stuck with the tab. Isn’t that sweet of them? But hey, don’t think these guys are the only culprits. Turns out, about 90% of those “top-notch” AMCs — the ones that love bragging about only using the most qualified appraisers — are pulling the same shady stunt.
Alright, here’s how it goes down: Rocket Mortgage, those lovely folks who insist you pay for an appraisal before closing (because, of course), have decided you should foot the bill for that lovely little appraisal. Shocking, right? But hold on, here’s where it gets good — the appraisal management companies (AMCs) like Clear Capital and Core Valuation? Oh, they’re not just passing the value along to you, they’re taking a HUGE cut of the fee, often keeping up to 80% of what you paid. And why? Just because they can. But don’t worry, they totally earned that money, right? Not really.
Their “service” mostly involves being a middleman, sending out bid requests to appraisers all over the state and probably making a couple of phone calls — real high-level work. And they love bragging about only using the best, most qualified appraisers. Sure, if by “best” you mean the ones just fresh out of licensing school who’ll drive 100 miles to accept an AMC fee of $200 to do an appraisal. Meanwhile, the real appraisers out there — the ones doing the hard work of schlepping to your property, analyzing the market, and putting together detailed reports — get barely a fraction of that fee. Just a little thing you might want to keep in mind next time you’re asked to pay those inflated costs.
Think again. AMCs allegedly have a nifty little clause in their agreements that prevents appraisers from discussing their fees with anyone — including you. And on top of that, they also forbid appraisers from attaching any kind of invoice or breakdown with the appraisal report. So, while you’re left in the dark about how much of your fee is actually going to the person doing the work, the AMCs keep you blissfully unaware of how much they’re pocketing from your payment. Clever, right?
In short, the lawsuit isn’t just about getting refunds for borrowers. It’s a call to action to end these shady practices once and for all. So, the next time you’re asked to pay an appraisal fee, remember: someone’s probably making a lot more off of it than you think – and it’s definitely not the person doing all the work.
If you’re looking for a real estate appraiser in Sacramento, make sure you’re working with someone who values transparency and fair fees. Let’s hope this lawsuit makes enough waves to wash away these practices for good.