The Appraiser Shortage Myth Part 43

[J Grant]

Danny, you are the fall guy taking the heat. It is directed at you because you are the one showing up on the board, but imo the lenders who participate in this method of payment are as culpable or more so for the situation being what it is. The lenders know what it ends with the low $ amounts to appraisers, and the lenders could correct it tomorrow if they choose to.

 

[The Warrior Monk]

And I NEVER said to set a fixed fee that the AMC can charge a lender- the AMC can charge whatever fee they want to the lende rand lender can pay it. The only thing that would change is the amount of that money the lender can get from the borrower paid. Which would have to be a regulation or interpretation of the law specific to the appraisal, AMC and fee arrangement unique to mortgage lending.

Next time you meditate, substitue Om with:

"Nobody can fix fees."

 

[J Grant]

I have no such "fee split" agreement with ANY client. I don't know how many times I can tell you that what I bill the lender has NOTHING to do with any arrangement they have with the borrower. I am not "fee splitting" - I just charge what is due. If you have issues with how the lenders arranges to pay, take it up with the lender.

If I send a bill to lender that says, for example, $400 appraisal + $150 Management fee = $550 total fee, then the lender owes $550, period. What they have (or have not) collected from anyone else does not affect what they owe.

TMD, isn't the above in bold describing a fee split? If not, then what is it? (It does not matter how many times you tell her the facts and realities of your business). What ":fact" did "I not accept?

Since I never in my posts said the AMC fee split is with the borrower, I don,t know why that is in the mix. Perhaps there is a communication breakdown, or perhaps the false reading of it is intentional- there can be a chasm on a between what someone meant to write and the way it comes out in a BB where people exchange views without speaking

 

[J Grant]

There is nothing illegal or dirty about a fee split per se. Fees are allowed to be split where a blended fee allows it. . The fact that with appraisals, the amounts are so marginal to work off, and it comes at the expense of reduced compensation to the appraiser is the problem, and the reduced compensation allows free of cost ( not free of payment , they pay the AMC as a pass through, free of cost to them above the amount borrower paid in total ). This allows AMC's a huge competitive advantage .

 

[DWiley]

The above you posted is a fee split ! ( the $550 total fee is what borrower paid, yes or no)

I don't know, and, frankly, I have no reason to care. My agreement is with the lender, and has nothing to do with the borrower. Sometimes there isn't even a borrower involved (e.g. the large volume of default work that we do). Who does the lender pass the bill along to in cases of REO or default?

As I have said many times, if you have an issue with how they pay, then take that beef up with the lender.

 

[DWiley]

TMD, isn't the above in bold describing a fee split? If not, then what is it?

What are all those fee disclosures of $ paid to AMC $ to appraiser on the appraisal in states that require it? ? (rhetorical question)

No, that is not a fee split. It is simply detailed billing. Like when you get a bill in a restaurant that shows the total as well as all the items ordered.

 

[The Warrior Monk]

There is noting illegal or dirty about a fee split per se. Fees are allowed to be split where a blended fee allows it. . The fact that with appraisals, teh amounts are so marginal to work off, and it comes at the expense of reduced compensation to the appraiser is the problem, and the reduced compensation allows free of cost ( not free of payment , they pay the AMC as a pass through, free of cost to them above the amount borrower paid in total ). This allows AMC's a huge competitive advantage .

Obviously there is less margin to work off of at the lower end of the spectrum; i.e., the cookie-cutter, anyone-has-the-skills-to-do-it assignments. But it is nothing particular to appraising. If you buy an economy car, they are much less flexible on price because they have a low margin to work with. Higher-fee assignments have more flexibility (the last AMC assignment I did, many years ago, had a fee of $2,750...I got my fee because there was plenty of margin to work with on the assignment).

Appraisers have an even bigger competitive advantage: Just say: No!

 

[timd354]

No, that is not a fee split. It is simply detailed billing. Like when you get a bill in a restaurant that shows the total as well as all the items ordered.

Maybe she should demand that the restaurant provide her with the a cost breakdown of the ingredients and labor that went into the preparation of each item ordered to make sure that the cooks and the pickle suppliers were fairly compensated.

 

[J Grant]

I don't know, and, frankly, I have no reason to care. My agreement is with the lender, and has nothing to do with the borrower. Sometimes there isn't even a borrower involved (e.g. the large volume of default work that we do). Who does the lender pass the bill along to in cases of REO or default?

As I have said many times, if you have an issue with how they pay, then take that beef up with the lender.

Again, I never said YOUR agreement is with the borrower. I never said that ever, so please stop alluding to it. I said, your payment, from the lender, in those assignments were a borrower appraisal fee is paid, comes out of a portion of the borrower paid total appraisal fee (see below) It has nothing to do with default work.

A lender charges a borrower $500 for an appraisal in region X ,and the appraiser is paid $300 for that appraisal in region x from the AMC (lender as client). So the borrower fee was split, was it not? If not, then where did the missing $200 from the borrower paid total of $500 go?

 

[The Warrior Monk]

No, that is not a fee split. It is simply detailed billing. Like when you get a bill in a restaurant that shows the total as well as all the items ordered.

The only point I disagree with is calling the fee an "appraisal fee," and being itemized as such on anyone of the lender's disclosure forms, since it involves more than appraisal work.

The restaurant bill example, involves all services pertaining to the restaurant, and is why it is called such. As an example, restaurants sell drinks. However, the bill received is not called a "drink bill" if it includes other items than drinks.