Regulations Are For Your Enemies

[Marco Ruiz]

There is a Spanish proverb that says, "Regulations are for your enemies." There is currently a movement afoot to regulate AMCs. It is gaining momentum here in Florida and in other States, as well. As of this writing, AMCs are not regulated at all.

Some have argued that it would not be in the appraisers' best interests to regulate AMCs. Their reasoning is that regulation will tend to limit the number of AMCs doing business. The more AMCs that are out there, the more they will have to compete with each other for the dwindling number of appraisers.

That may be true in the long term, however, in the next few years I believe the competition among AMCs will be more focused on getting the lender's business. This means promising the lenders faster and cheaper appraisals - bad for appraisers.

The State is concerned with public safety, not so much that they believe fast and cheap appraisals represent a danger to the public (although I think they do) but, rather, the fact that anybody, including appraisers who have lost their licenses for producing fraudulent appraisal reports, can turn around and start up an AMC. This, one could easily argue, represents a danger to the public.

A lot of appraisers want to see AMCs regulated. They resent AMCs for taking their clients and then charging them for the privilege of doing so. Then the AMCs add insult to injury by demanding unreasonable turn-around times and throwing in additional "requirements" that seem to serve no purpose other than to make the appraiser's job even more difficult.

I know some appraisers who do AMC work, but I don't know any who like it. Appraisers are scattered, and we have very little influence over our industry at this time. This will not always be the case, since more appraisers are getting together to see that changes are made. Eventually, we will take charge of our industry. With so many enemies out there, the regulation of AMCs is inevitable.