The Appraiser Shortage Myth Part 43

[Mr Rex]

Funny thing is that the history books mention nothing about the days of government/AMC violent overthrow of the appraisal free market. It is odd that there are no stories of government/AMC armed good squads sending loan officers and mortgage brokers who still wanted to be allowed to order appraisals to the re-education camps or of them kicking in the doors of appraiser's homes and offices and forcing them to work at gun point for the AMCs at whatever fees the AMCs dictated...that must have been terrifying and only could have been covered up by a vast conspiracy at the highest levels of government. Eisenhower warned future about the military generations about the military-industrial complex, but it is too bad that he failed to warn us all about the Government-AMC appraiser enslavement complex.

One has to wonder if the current environment is so great for appraisers, why a former fee appraiser would do anything other than appraise? Much less come here and chastise rank and file fee appraisers from outside the walls of the zoo.

 

[timd354]

Your post is bogus *. The topic is lender work, not work from borrowers. .

Yeah, I know that the topic is about lender work and that is why your point about borrowers not being able to order the appraisal is stupid and pointless. There are thousands and thousands or mortgage lenders out there and at least several hundred AMC's and there is other appraisal work aside from lender related work so your argument that there is not an open market for an appraiser's services is simply fallacious

 

[Deleted member 130081]

I think that first one was just addressed in responses to JG's posts. The omission of AMC fees is required in the alternative presumption, but the same is not true of first presumption. To state that AMC fees cannot be used in C&R calculations is simply not consistent with what the regs actually say.

Yes, the massive growth of AMC business share was driven by regulations. Those regulations certainly do not require AMC use, but they created an environment that made use of AMCs an appealing option to lenders. There is a reason why so much business goes through AMCs, and that reason is that the AMCs provide a service to the lenders. Does it work perfectly? Absolutely not. I work every day to try to make it better.

LOL. Holy **** was that so hard? And when you say "appealing option to lenders" you mean "the only quick and easy option available to keep the train movin' in a landscape of new and murky regulation" right? And when you say "there is a reason.....that reason is AMCs provide a service...." you mean "AMCs have used their profits from market leverage to expand into underwriting services previously provided by in-house bank staff, using the borrower-paid appraisal fee that used to go to the appraiser, to fund what used to be an additional expense for lenders, resulting in a more profitable business model for the lenders, making the AMC even more attractive than before". No? Am I going too far with the words-in-mouth here?

Right or wrong, like it or not, the truth is that the "appraisal fee" is being used today more efficiently by the banks to cover not only the fee to the appraiser, but additional costs associated with the appraisal process. While nothing sinister about a company working to reduce costs and increase profits, this has been facilitated through government interjection that has paved the way for appraisal services to compete against each other on a mass scale and unlike any other industry. The end result is that appraisers get paid less than ever, banks are making more than ever and consumers are none the wiser about where those fees actually go. After some years of this, banks wonder if a shortage of appraisers may become a reality in most markets, as evidenced by a few markets today. Most appraisers attribute the shortage of new trainees to the shortage of fees. (Hey, this thread was about the appraiser shortage right?)

 

[J Grant]

Yeah, I know that the topic is about lender work and that is why your point about borrowers not being able to order the appraisal is stupid and pointless. There are thousands and thousands or mortgage lenders out there and at least several hundred AMC's and there is other appraisal work aside from lender related work so your argument that there is not an open market for an appraiser's services is simply fallacious

it's not stupid and pointless, I was comparing the far more limited, and regulated, market for lender appraisals compared to the unlimited d market for barbers, mechanics etc (since Mich CG made that comparison)

In any given area, there is a limited number of active, volume order or any AMC's active (despite several hundred in existence) and a limed number of mortgage lenders ordering direct. in any volume, despite thousands perhaps in existence nationwide . ( how many thousands of lenders are there?)

BTW my personal business is fine and I work with a number of direct lenders, I am not posting "just about me", I am posting about the topic in general- something you seem incapable of, you always to get personal and petty after about 3 posts that manage to stay on topic.

 

[Mr Rex]

A google search of the term internet troll returned the following picture:

 

[TRESinc]

You left out one critical thing- the AMC model has a huge market share not just doe to the regulations but the fact that AMC service is also FREE of cost to the lender ! How can they say no to that? What is more appealing than free service? Of course noting is "free" the AMC does not operate as normal way businesses do by charging a customer for service. The AMC profits from stripping away part of the borrower paid appraisal fee and keeping it . Thus though a bank technically "pays" an AMC, it costs them nohting.

why do you consistently prove that the blame falls on the lenders for choosing to use AMCs yet place the blame on AMCs?

since you are fond of comparing our profession to others i'll update the example i have used in the past.

i needed a new window seal for my old jeep. called a "local" company who ended up being nothing more than a middleman. they charged me for the service and when it was performed it was by a completely different company who took home a portion of the fee.

2 months ago the windshield on my truck cracked from a stone on the freeway. i called another local company and guess what happened? they outsourced the job to the same company that performed the previous service on my jeep. guess what else happened? they did it for a portion of the fee i was charged.

as much as you like to say it our profession, not our work, is not that different from lots of others.

This is not the case of lender res appraisal for Fannie, FHA, Freddie/GSE work. Due to regulations The borrower can not choose the appraiser , and limiting the channels even further, individual loan offers can not select an appraiser. Which puts the consolidated buying power in very few hands, and one of those hands is the AMC, which has a vested interest in keeping fee portion paid to appraiser low.

the borrower was allowed to choose their own appraiser at one point in history. how did that work out? at one point loan officers had direct contact with appraisers and were allowed to pick their favorites. how did that work out?

LOL. Holy **** was that so hard? And when you say "appealing option to lenders" you mean "the only quick and easy option available to keep the train movin' in a landscape of new and murky regulation" right? And when you say "there is a reason.....that reason is AMCs provide a service...." you mean "AMCs have used their profits from market leverage to expand into underwriting services previously provided by in-house bank staff, using the borrower-paid appraisal fee that used to go to the appraiser, to fund what used to be an additional expense for lenders, resulting in a more profitable business model for the lenders, making the AMC even more attractive than before". No? Am I going too far with the words-in-mouth here?

Right or wrong, like it or not, the truth is that the "appraisal fee" is being used today more efficiently by the banks to cover not only the fee to the appraiser, but additional costs associated with the appraisal process. While nothing sinister about a company working to reduce costs and increase profits, this has been facilitated through government interjection that has paved the way for appraisal services to compete against each other on a mass scale and unlike any other industry. The end result is that appraisers get paid less than ever, banks are making more than ever and consumers are none the wiser about where those fees actually go. After some years of this, banks wonder if a shortage of appraisers may become a reality in most markets, as evidenced by a few markets today. Most appraisers attribute the shortage of new trainees to the shortage of fees. (Hey, this thread was about the appraiser shortage right?)

so place the blame where it should be - on the lenders choosing to use AMC services. just as no AMC can force an appraiser to complete orders they can't force a lender to utilize their services.

 

[Deleted member 130081]

Funny thing is that the history books mention nothing about the days of government/AMC violent overthrow of the appraisal free market. It is odd that there are no stories of government/AMC armed good squads sending loan officers and mortgage brokers who still wanted to be allowed to order appraisals to the re-education camps or of them kicking in the doors of appraiser's homes and offices and forcing them to work at gun point for the AMCs at whatever fees the AMCs dictated...that must have been terrifying and only could have been covered up by a vast conspiracy at the highest levels of government. Eisenhower warned future about the military generations about the military-industrial complex, but it is too bad that he failed to warn us all about the Government-AMC appraiser enslavement complex.

OMG really? You gonna rant about my use of the word violent? I think violent applies. But if violent doesn't work for you, swap it out with whatever word you think more appropriately describes what happened - it doesn't change the point one iota.

 

[bnmappraisal]

Most appraisers attribute the shortage of new trainees to the shortage of fees. (Hey, this thread was about the appraiser shortage right?)

- and maybe this thread can get back on track

 

[Eli]

 

[gregb]

- and maybe this thread can get back on track

Good point. What gets overlooked when the AMC discussion focuses on fees alone, is the myriad other reasons for appraisers to decline to work for AMC's. Among those is the unrelenting stips, irrelevant assignment conditions, 48 hour tat, constant nagging and updating, and abusive treatment from the "reviewers" as well as the risk of nonpayment.

I have 9 assignments on the desk, fees from $450 to $1,000, from four different clients/lenders. If forced to use EXXOS or whatever that SL app is, forget about it. Time management is the key for me to meet the agreed on turn times, without the interference and interruption of an AMC.