Clearing the Air, Continued: What the AMC Defense Leaves Out

By Woody Fincham, SRA, AI-RRS

Joseph Palumbo’s recent AI blog piece, “Clearing the Air on ‘Hidden Fees’ and the ‘Middleman’ Myth,” argues that appraisal management companies have been mischaracterized and that, properly led, they support independence, compliance, and quality. There are real points of agreement in his article. Independence and compliance functions must be performed by some entity, a wholesale return to in-house lender valuation departments is unlikely at current volumes, and where (professionally designated) appraiser-led AMCs differ in practice from volume-driven non-appraiser shops, the distinction is real and worth making.

But the piece sidesteps the questions residential appraisers are actually asking, and it does so from a position the Appraisal Institute’s editorial framing leaves under disclosed.

The Author’s Position Should Be Foregrounded, Not Buried
Mr. Palumbo is an Appraisal Institute Designated Member and also Chief Operating Officer of Worth Valuation Services, Inc. — an AMC. That fact appears in his author bio at the foot of the article, alongside a standard “views are the author’s own” disclaimer. It does not appear at the top, where it belongs. Because the article is authored by an executive within the AMC industry, readers should understand it as an advocacy-oriented perspective on the issue rather than as a detached profession-wide assessment. It is industry advocacy, and it should be presented as such.

The framing becomes more complicated because the piece responds directly to concerns that many residential members have been raising for years, including in prior Valuation commentary.

AI has taken steps in recent years to provide outlets for member opinion and commentary (such as this newly created space), and these recent exchanges are evidence our members are hungry for additional channels.

The “Hidden Fees” Reframing Is Not Responsive
The article reframes the “hidden fees” critique as a disclosure-comprehension problem — that consumers see one “appraisal fee” line item and don’t always understand which portion goes to the appraiser versus the AMC. That is a real issue, but it is not the issue residential appraisers have been raising. The substantive complaint is twofold. First, the bundled disclosure permits the consumer to be charged a fee that materially exceeds what the appraiser receives, with the differential captured by an entity whose value to the consumer is not separately itemized. Second, Dodd-Frank §129E requires AMCs to pay “customary and reasonable” fees to appraisers, and the documented enforcement record on that requirement is weak. The article notes that the Appraisal Institute “continues to support and advocate for full disclosure of AMC fees to consumers,” which is consistent with the disclosure critique — making it odd that the same blog post then frames the matter as a “healthy debate” rather than a substantive issue with statutory and disclosure mechanics that need to be engaged.

The Independence Argument Cuts Both Ways
The article asserts that AMCs reduce direct pressure on appraisers by routing communication and standardizing revision protocols. Properly run, they can. The empirical reality reported by residential appraisers across the country, however, is the opposite pattern in a meaningful share of assignments:

• Revision requests that reach the substance of value conclusions;
• Turn-time pressure inconsistent with assignment complexity;
• Panel removal threats following pushback on scope or fee; and
• Retaliatory removal following regulatory complaints.

The article handles this by defining the good version of the AMC model as the real model and treating the bad version as “poor execution within the model.” At some point, pattern-of-execution across a substantial portion of the industry is the model. Treating it otherwise is a no-true-Scotsman move, not an empirical defense.

The Article Doesn’t Engage the Alternative It Set Out to Rebut
The piece is positioned as a rebuttal to a 2025 Valuation article that defended the VA’s existing fee panel system as a “gold standard” and argued against introducing AMCs into the VA process. The rebuttal does not seriously engage that comparison. The VA panel functions without an AMC layer, with documented fee parity and quality outcomes, and it is the closest contemporary U.S. example of an alternative coordinating model. A serious rebuttal would explain why the disciplines the article correctly identifies — qualification, independence-safe communication, QC, audit trails — cannot be performed by lender-direct panel models, hybrid models, or technology platforms without AMC intermediation. The article does not do this. It assumes the AMC frame and argues for professional leadership within it.

What Residential Appraisers Actually Need
The closing call to “stop arguing past each other and start aligning on best practices” is well-intentioned but underspecifies the asks. Residential appraisers have been clear about what alignment would look like:

• Itemized consumer disclosure separating the professional appraisal fee from coordination, technology, and QC charges.
• Meaningful enforcement of customary-and-reasonable fee requirements under Dodd-Frank §129E.
• Documented protections against retaliatory panel removal following good-faith pushback or regulatory complaint.
• Geographic-competency standards that prevent assignments routing to appraisers without local market knowledge.

Those are not slogans. They are the operational changes that would distinguish a defensible AMC model from the one residential members have been describing for the better part of a decade.

The profession does not need to choose between AMCs and no AMCs. It needs accurate framing of the disagreement, transparent disclosure of the parties to it, and editorial space for the residential field’s perspective at parity with the remainder of the mortgage and real estate industries.

Woody Fincham is a residential specialist who practices out of Charlottesville, VA. He is well known for providing valuation and consulting services on complex properties. These properties can include equestrian hobby farms, luxury estates, large acreage, conservation easements, diminution in value, and appraisal review work. He spends some of his practice on litigation-related work and has often been admitted as an expert witness. He also teaches residential topics for the Appraisal Institute. He resides in Palmyra, VA, with his wife, Laurie, and his two teenage kids. We would be remiss not to mention their faithful Aussie companions: Bleu, Stella, and Ferghas.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy, position, or views of the Appraisal Institute, its leadership, or its members. Publication of this article does not imply endorsement of the views and ideas presented herein by the Appraisal Institute.

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