I know you are appraising for the love of it. But you also have expectations to be paid. Not only do you deserve to be paid you deserve a customary and reasonable fee. And in exchange you owe your clients a quality product delivered in a reasonable time frame. Sounds simple, right?
With Appraisal Management Companies (AMCs) in the middle of so many transactions the appraiser is separated from the client and in too many cases separated from their fee. With recent failures of several AMCs getting paid is tops on the list of hot button issues.
Appraisers seem to be misinformed on the purpose of AMC regulations. Dodd Frank is not the appraiser right to work act. The oversight of AMCs is to protect the public. State regulators are not appraiser advocacy groups. In fact, state regulators are charged with monitoring the activities of appraisers as well as AMCs. Unfortunately many appraisers thought that bonds, required as part of the AMC registration process in most states, were for their benefit. There has been some discussion of states establishing recovery funds but to my knowledge, there have been none established yet.
While some states have maintained that AMCs must pay within 60 days if not otherwise agreed to, it is your role to protect your own interests. Read your engagement letters. Review the policy and the scope of work. Do your own due diligence. There are appraisers every day on the Buzz Forum asking for references on AMCs. It is also very simple these days to accept credit card payments.
The good news is that there are several lenders stepping up to pay the unpaid invoices of their AMCs who have failed. AMCs are acting as agents of the lenders. The due diligence process of lenders really needs to be stepped up. For lenders it puts their entire operations at risk as well. If appraisers "black ball" certain lenders because of their poor vendor choices it will not bode well for the lender.
The lesson learned from this is that lenders are ultimately accountable. Lenders must do a better job of managing their due diligence process. As an appraiser though, you really need to look out for yourself. Do not accept orders with unreasonable terms. Perform your own due diligence. There are over 500 AMCs, many created over the past few years. I predict most won't be in business at the end of next year. Bottom line. Don't extend credit to unknown entities.