A top law firm is investigating the role of appraisal management companies (AMCs) in driving up appraisal costs. The firm is asking homebuyers to contact them if they feel they’ve been overcharged or misled about how much of the appraisal fee goes to an AMC versus how much goes to the appraiser.
In a blog post on its website, law firm Morgan & Morgan said that AMC involvement in the appraisal process is potentially concerning because of a perceived lack of transparency, inflated costs and limited additional value to the consumer.
The appraisal fee has been top of mind for appraisers since the financial crisis of 2008, when AMCs began taking on a larger role in the home valuation process. The Dodd-Frank Act of 2010 called for a buffer between lenders and appraisers in the hopes of preventing collusion between the two parties.
But appraisers say AMCs have engaged in unfair practices that result in a larger share of the appraisal fee going to firms instead of the individual appraiser. They point to how the appraisal fee is presented on closing documents as a lump sum, as opposed to showing how much of the fee goes to an AMC.
Appraisers say that the lack of transparency allows AMCs to take a higher share of the fee. They believe this has played a role in the rapid decline of the appraisal profession as it’s gotten more difficult to make a living in the field. As a result, the number of appraisers nationwide has dramatically declined.
While there’s no love lost between the Consumer Financial Protection Bureau (CFPB) and the real estate industry, appraisers who’ve been vocal about AMCs filed a complaint with the CFPB in the hope of getting the appraisal fee broken out on closing documents. They think that additional transparency might cause consumers to question the role of AMCs, which are largely unknown among the general public.
The Real Estate Valuation Advocacy Association (REVAA), a trade group that represents AMCs, said it has never opposed breaking out the fee. But REVAA points to the stagnant housing market as the reason behind the decline of the appraiser profession, citing home sales that are at record lows. REVAA told HousingWire it had no comment on the investigation, citing a lack of knowledge.
This effort with the CFPB looks all but dead now that the Trump administration has appointed Project 2025 architect Russell Vought as the bureau’s acting head after Trump fired Rohit Chopra, Joe Biden’s pick to lead CFPB.
In his first day on the job, Vought ordered the bureau to cease most of its activities, halt all communications and shut down the building itself for the week. This came a day after Elon Musk gained read-only access to a wide variety of CFPB data.
Democrats and industry experts have questioned whether CFPB and departments like the United States Agency for International Development (USAID) can be unilaterally shut down by the Trump administration, citing the fact that these organizations were created through congressional legislation.
Sen. Elizabeth Warren (D-Mass.) sent a letter last week to U.S. Treasury Secretary Scott Bessent — who was serving as acting CFPB director prior to Vought — urging him to “unfreeze“ the agency. Warren, the ranking Democrat on the Senate Committee for Banking, Housing and Urban Affairs, was instrumental in the creation of the CFPB.
Morgan & Morgan said that homeowners should ask for a breakdown of the appraisal fee, look for the average cost of an appraisal in their area and contact the firm if they believe they’ve been overcharged. The law firm specializes in a number of areas, including personal injury, class action, consumer protection and civil rights.
