The Appraiser Shortage Myth Part 43

[J Grant]

(my bold)

Unfortunately for your argument, they are being paid C&R as defined by the regulation you cite.
Again, without understanding how the system works, it will be very difficult to develop a practical solution that has a chance of being adopted and implemented.

No, they are not being paid C and R, if an individual fee is mcuh lower (or higher) then what other non AMC work or VA pays as the final rule defines C and R...but however C and R is interpreted ( sate boards are struggling with it now.) if an AMC pays higher or ower (usually low) the AMC is claiming it's fine since "we paid the appraiser their fee"... The C and R issue as a stand alone issue is bit off topic. ( appreciate the post though)

 

[bnmappraisal]

Nonsense, sets closing back only if fee changes within three days according to my banker. They don't like to but not a big issue for a real (FDIC,etc.) bank.

And was/is my thought on TRID. BUT! When looking at the big picture (national) you're dealing with thousands of changes, especially in the AMC world. So I could see the push back. I'm not in favor of the push back, but I can understand where it comes from

 

[hastalavista]

Denis, how can you explain that for years, TRID was not a regulation, but the same resistance to cost plus was in place?

First, cost-plus was a model before the HVCC with many AMCs.
It was the introduction of the HVCC and then Dodd-Frank which resulted in the significant growth of AMCs and their role in the appraisal process.
During that time, there was a lot of shake-up and roll-out of different kinds of programs. You may think 5-years is a long time; it is a very short time in the world of financial regulation and banking/lending policy implementation (how long did the IFR take to be adopted after Dodd-Frank? And how much longer did the AMC IFR take after that?). How long does it take the GSEs to introduce a new form?
TRID was just finalized in 2015. That is a few heartbeats in the big scheme of things.

We are now where we are. Cost-plus is not in place because the regulatory environment is not conducive to a cost-plus system. If I were a lender's compliance officer, I'd simply argue against it on a compliance basis.

I have to quote a firm fee in the TRID. I cannot do that if I don't know what my fee is going to be. Therefore, I'll set up a contract rate for my appraisal services; I'll have somewhat of a tier system and I'll add a contingency just in case we need a follow-up inspection. But once we quote it we cannot go over it. But if that is what we are paying, that is what gets quoted. And we stick with that.​

For the last time: Get rid of the no-tolerance inclusion of appraisal fees and a cost-plus system can be adopted. You'll have every appraisal organization, every appraiser (at least the ones I know) and every AMC lobbying for that. Once adopted, appraisal fees will no longer need to be firmly quoted and the lenders will not worry about their regulatory compliance based on the appraisal fee (is it $400 or $450? Who cares; it is what it is). Also, this will require the separation of the fees in the closing statements.

You don't think that will work? No problem. Pursue some alternative and good luck!

 

[J Grant]

And TRID made it worse. It is a paperwork nightmare to change the appraisal fee. Thank God for big government and restrictive regulations.

Yes. TRID makes it worse, and I dont' agree with every action by "big govt'" But TRID alone is not preventing cost plus nor any other reforms. Not does moving to cost plus mean anything different about changing appraisal fee.

These same problems and issues were in place before implementation of TRID, now TRID is the latest excuse (if TRID is rolled back they'll find another excuse or loophole )

Per final rule, State boards are charged with C and R enforcement, I know you are no fan of C and R but it is the regulation; perhaps at some point the loopholes will get harder to evade)...for now we are where we are, and TRID it is not an insurmountable obstacle, as Evincere and others and myself said, AMC can pay a flat fee, ( or lenders ditch the AMC and pay the flat fee-lenders pay a flat fee now in my area and comply with TRID- ( and C and R, isn't that interesting)

 

[hastalavista]

Nonsense, sets closing back only if fee changes within three days according to my banker. They don't like to but not a big issue for a real (FDIC,etc.) bank.

Come'on, Terrel, be real.
Are you talking about George Baily and Baily's Building and Loan, or are you talking about Wells Fargo, Bank of America, Chase, US Bank, etc. (the ones who the majority of appraisers work with)?

If this were small town America, we probably wouldn't be having this issue and this conversation. It isn't. Again, without acknowledging the system as it exists, it will be very difficult to implement changes that address the system as it exists.

 

[J Grant]

For the last time: Get rid of the no-tolerance inclusion of appraisal fees and a cost-plus system can be adopted.

Denis, You are drawing a line in the sand, that in order to implement cost plus, the no tolerance rule of TRID must be revoked. That is simply not the case ( demonstrated in a number of posts) and the fact that cost plus was not adopted prior to TRID shows resistance is due to other reason.

And how do we "get rid" of the no tolerance inclusion of appraisal fees in TRID? That adds yet another hurdle /years to reaching a solution. While getting rid of it can be a goal, setting it up as the prerequisite for reform unless it happens is just one more barrier .

The resistance to cost plus is has been, and continues tto be motivated by profitability since it existed for years prior to the no tolerance rule., and TRID can be accommodated in a cost plus model.

 

[Evincere]

Denis, how can you explain that for years, TRID was not a regulation, but the same resistance to cost plus was in place?

Right? TRID is now being held up as a baby shield as to why cost plus can't be done. Some clown, I forget who, once gave the reason that buyers were too ignorant to understand separation of fees on a closing statement and for that reason should not be burdened with the information.

Prior to TRID there was the same reluctance for the same reasons that exist today. That it won't be done is because fees wouldn't be amenable to being leveraged to the extent they are now - pre or post TRID matters not. The hypocrisy is contemptible.

 

[hastalavista]

Right? TRID is now being held up as a baby shield on why it can't be done. Prior to TRID there was the same reluctance for the same reasons that exist today. That it won't be done is because fees wouldn't be amenable to being leveraged - pre or post TRID matters not. The hypocrisy is contemptible.

I appreciate your view. I've laid out the entire reasoning and background of the reasons that support the difficulty in adopting cost-plus with the current TRID regulations. I'm sorry you hold that view in contempt.
I'll wish you the same good luck as I did to JGrant in working on an alternative solution. If you succeed, I'll be one of the first to congratulate you.

 

[Evincere]

I appreciate your view. I've laid out the entire reasoning and background of the reasons that support the difficulty in adopting cost-plus with the current TRID regulations. I'm sorry you hold that view in contempt.
I'll wish you the same good luck as I did to JGrant in working on an alternative solution. If you succeed, I'll be one of the first to congratulate you.

Are like you running for political ambitions, public office, appointed position somewhere?

 

[hastalavista]

Are like you running for public office or appointed position somewhere?

No. Just trying to end a disagreement on an amicable note.