The Beginning of the End for Appraisal Management Companies

[Mejappz]

The Hampster is on an absolute tear!

 

[Terrel L. Shields]

The fee is not the central issue (in my mind). The fact that every single assignment is based solely upon fee and turn time. Neither factor is appropriate for picking the appraiser. This is what matters. And BTW, a new selling guide was issued Sept. 4th.

The lender (or its authorized agent)​

must establish policies and procedures to ensure that qualified individuals are being selected in​

accordance with Fannie Mae requirements, including the Appraiser Independence Requirements.​

must ensure that an appraiser has demonstrated the ability to perform high-quality appraisals before​

using an appraiser’s services. The quality of an appraiser’s work is a key criterion that must be used in​

determining which appraiser the lender (or its authorized agent) uses for its assignments. The​

requirement for an appraiser to produce a high-quality work product must always outweigh fee or​

turnaround time considerations.​

 

[chad hampton]

Hamp is on point again. I do feel the tide is turning a little. There’s still time for AMC’s to start behaving properly. But they’re now going on almost a decade of bad behavior. Maybe regulators are finally catching up? That’s usually how long it takes. I still think there’s time for AMC and appraisers to work together, but that time is running out for them.

Pretty much every item that the ARCC has submitted should have been enough to get a warning or some sort of a reprimand from every state board. I’m not saying AMC‘s should have their licenses revoked, but they need to be rained in. That is the job of the boards that issue them licenses and permit them to work in their state.

 

[sputnam]

Unfortunately, the heavy hand of government is likely to solve the perceived problem by making it much more difficult for AMCs to operate or by outright banning them. That may be lauded by some... but, there are AMCs that are already operating in the 'right' way and those companies will get stomped too. Best I can tell, the ARCC's efforts won't help appraisers in any way. It is focused on what consumers are paying.

 

[George Hatch]

I don't think they have anything to lose by assembling their evidence and voicing their complaints. I support them making their best effort and taking their best swing and I hope it works out for them.

If an individual state board wants to clamp down on AMCs then they'll go through their hearing process, both sides will send their lawyers and the lawyers will cite the laws and regs they think supports their position and their intention to fight the fight and seek all available legal remedies, including suing the board if their side loses.

The appraisers will say simply having a license and 10 years experience with no complaints doesn't satisfy a presumption of competency. The AMCs will argue that the feds interpretation of C&R is what it is, and that having seen 10 appraisals from that appraiser over the last 10 years is enough to demonstrate that appraiser has the competency to appraise this SFR. The AMCs might even call in a couple of their clients (lenders) that are amenable to testifying that they've seen everyone's work over the last 20 years and they already know this appraiser is competent to perform this assignment, so that satisfies the competency element; meaning they don't think they are shopping solely by fee.

The board will hear both sides of the argument and then they'll issue their ruling. The loser in the ruling will mount a legal appeal to the courts and the issue will get settled in front of an appeals court on the basis of the law.

I'm not certain how the legal case will pan out but I assume there will be lawyers who will have every incentive to run the clock. Can't avoid that.

 

[Terrel L. Shields]

Again, for me, "fee" is not where the focus should be - C & R is a chimera. A phantom that is illusionary. The key factor is that the lender (or its agent) is to pick appraisers appropriate for the job and turn time and fee should not even be a consideration. But it will always be a consideration when you allow the AMC to keep the difference between the appraiser's fee and what the lender is paying the AMC. It is not a matter of what the borrower pays.

 

[George Hatch]

I think that

The adverse effects of [presumed competency+fee shopping] on "nominally sufficient to purpose" will be quantified during the downside of this RE cycle. When they start doing forensic reviews on appraisals wherein the loan failures have occurred. If there's a big difference in the percentages of gross overvaluations @ eff date between the bottom feeder fees vs the higher fees then we can expect the substandard fee situation to get a lot of attention. If there isn't a big difference in gross overvaluations then that will kill the fee argument once and for all.

If the losses attributable to low fees don't accrue then nobody who matters is going to go to war with the low fee models over "sloppy" appraisals or unsupported adjustments or omitted HBU analyses or other housekeeping.

 

[Mejappz]

Looking good Hamp. I like the tie. People are getting worried and they should.

ARCC

arcc-usa.org

 

[Terrel L. Shields]

Dream on...but it's a nice thought

 

[George Hatch]

It certainly does look like Mr Thomas is on a roll. Most of his vids in the last 6mo have less than 100 views, but one that he did a couple weeks ago (beginning of the end) racked up 1600+ views. The next highest number in the last 6mo had 380 views (the one on data cancer) The one on measuring came in 3rd at 236 views. He should probably send mejappz a thank you card for steering AF members to boost those totals. If not, I'll thank Meappz for him:

Thank you, Mejappz. You're making a difference.




Does anyone know if YouTube gives out a golden star or a refrigerator magnet for vids that surpass 2000 views?