Rick Greenhouse, a home appraiser for 30 years, recently received an offer from a management company ready to pay him $150 to inspect the interior and exterior of a 5,000-square-foot home in Sewickley Heights and to submit the report within 48 hours.

"I told them I wouldn't do it for less than $500 and they told me they would find someone else to do it for their price," said Mr. Greenhouse, owner of Greenhouse Real Estate Appraisal Service in Imperial. "I politely declined the job."

Appraisers who work on behalf of appraisal management companies complain that many such companies hire appraisers based on who will work for the lowest fee and provide the fastest turnaround rather than the quality of work, experience of the appraiser or complexity of the assignment.

A new agreement by government-backed mortgage finance companies Fannie Mae and Freddie Mac that takes effect May 1 will shake up the home appraisal industry by giving appraisal management companies a stronghold on the appraisal process.

All mortgage loan officers, including mortgage brokers, will have to rely on such companies to obtain home appraisals because lenders no longer will be allowed to order appraisals from a specific appraiser or have any influence on the choice of which appraiser is assigned to a job.

"I'm not a big believer in creating monopolies, and this is a monopoly created by the government under the guise that it will prevent fraud in valuations that were prevalent in the past," said Michael Sichenzia, a mortgage expert based in Deerfield Beach, Fla.

"All of these steps to prevent fraud have been taken care of in the marketplace," he said. "There will be no more subprime loans, I promise you. This is backward looking and it doesn't serve any real purpose in the day-to-day marketplace as it exists today."

The Home Valuation Code of Conduct, as it's called, is intended to reduce bias in the appraisal process concerning loans purchased by Fannie Mae and Freddie Mac. Those assignments will be required to go through third-party appraisal management companies. The rule does not apply to FHA or HUD loans.

"Sometimes [appraisal management companies] hold fees so low it's not really worth your while," said Kenneth Christoff, president of Real Estate Appraisal Services in Robinson. "The lowest-cost provider is not always the best service."

LSI, a Pittsburgh area-based appraisal management company among the largest in the nation, declined to comment, as did several large banks in the region.

"At Citizens Bank, we have been using [appraisal management companies] for several years, so we expect no change in our business," said Angie Wagner, a spokeswoman for Citizens Bank in Pittsburgh.

There is no firewall that prevents banks from owning appraisal management companies. Countrywide Home Loans owns one called LandSafe Appraisal Services. Wells Fargo Bank owns RELS. LSI, in Coraopolis, is owned by Fidelity National Financial Co.

When the first draft of the new appraisal rule was written last year, the regulations would have only allowed lenders to use appraisal management companies in which they had less than a 10 percent ownership stake. In the final draft, that rule was thrown out.

Critics argue that appraisal management companies will do little to remove the flaws in the system that led to homes being appraised for more than they were really worth. The move could even perpetuate a system where appraisers are under pressure to meet certain sale prices or lose the opportunity for future work.

"[Appraisal management companies] manage the mortgage process for lenders, so shouldn't they get their fees from the lender and not the customer or the appraiser?" said Mr. Greenhouse.

"There are a few who do it that way, and I believe they will rise to the top before it's all said and done."

The National Association of Mortgage Brokers has filed a lawsuit against the Federal Housing Finance Agency to block the May 1 rule change, but most industry experts are not optimistic about its success.

In the past, an appraiser could lose business with an individual bank for failing to appraise a house high enough to meet the sales price. Under the new system, if an appraiser does not meet the standards of an appraisal management company, he could effectively lose business with dozens of banks in one fell swoop.

Also, appraisal management companies are not regulated by any state agency and their employees are not required to be licensed, yet they will hold sway over appraisers who are licensed and regulated.

A few states, such as Arkansas, North Carolina and Connecticut, have taken steps to regulate appraisal management companies. Pennsylvania is not among them.

"What I don't particularly care for is many of us have gone to great lengths to better ourselves with higher education and designations, and the [appraisal management companies] will give the assignment to the lowest bidder and want it turned around in a short time," said Anthony J. Barone, an appraiser based in Brentwood.

"They are not asking appraisers if they are competent to do the assignment. They are making the assumption and will charge a [consumer] $300 to $400 and may pay an appraiser $140 to $220," he said. "There's a lot of guys, especially older ones, who are thinking about getting out of the business."