The Appraiser Shortage Myth Part 43

[Meandering]

Which one?

It's hard to keep track of all the underlines (which are typically taken out of context).

I took nothing out of context.

Just quoted you and underlined so, I'll try again if it's easier for you to see it in a different post.

It doesn't have to allow for a blended fee. If it is not prohibited, then there is no legal recourse against that particular action (i.e., is "allowed").

Here's a link you might even find helpful

https://www.consumerfinance.gov/eregulations/1024

 

[The Warrior Monk]

I took nothing out of context.

Just quoted you and underlined so, I'll try again if it's easier for you to see it in a different post.

If you are referring to post #639, it has nothing to do with what you allege.

And, FWIW, if it did, the Feds would be all over it, as this would be a cut-and-dry big case and big money maker.

 

[Meandering]

If you are referring to post #639, it has nothing to do with what you allege.

And, FWIW, if it did, the Feds would be all over it, as this would be a cut-and-dry big case and big money maker.

OMG DAVE.

Your post 687 to me, which I responded to.

You know Rodger went a bit funky before they found he had cancer.

Are you okay there Dave?

I alleged nothing.

I simply copied your post and bolded and underlined 5 words you wrote.

.

.

 

[The Warrior Monk]

There is no where in RESPA that allows for a "blended fee" for appraisal and management services.

If it is not prohibited, then it is allowed. Nothing you underlined or posted indicates anything to the contrary.

You know Rodger went a bit funky before they found he had cancer.

Are you okay there Dave?

Well, I am different. There is probably less than 1% of the population my age that has the workout routine I have. The longer I stay healthy, the longer I time I have to win arguments!

 

[TRESinc]

Some lenders do arrange for cost plus with the same AMC that bills other lenders not on cost plus basis.

and there you have it - it is the lender's decision on which payment method to use, not the AMC.

I will say appraisers tend to put the blame on AMC's, when the lenders who do this also are at fault. The lenders know very well they are getting free of $ cost to them AMC service by the the fact that the payment to the appraiser for the appraisal is low. w.

using your logic lenders get free appraisals too because they charge the borrower for it.

funny how all your arguments always circle back to something the lender has done...

 

[Deleted member 130081]

Well, I for one have never placed blame on the AMC. I think the folks who have got AMCs going are worthy of admiration and respect, building large successful businesses within the landscape in front of them - Bravo to them.

Now while that point is not really disputed by many appraisers, even the ones who like to come on here and bash AMCs, it is still disingenuous to claim the AMC model is not the most significant problem with our industry and also disingenuous to come on here and say AMCs operate in a free-market atmosphere. Considering this forum is comprised of appraisers, the ones who have been adversely affected by the way things are, I think that counts as insulting too. At the very least, it's throwing salt in the wound. But hey, that's just me and we are all entitled to our opinions.

Of course for the last statement to have teeth it requires the context of what a free-market atmosphere actually is, and that is where I also pause and have a problem with many of the comments made in this thread. I don’t believe the “just say no" mentality is really the fair response, when ALL THINGS are considered. Just an opinion.

While still murky, the laws do appear to leave room for the definition of a free-market to be relevant to the argument of current fees paid by AMCs. Whether you think the law posted by Denis is the be-all-end-all, or you choose to continue reading the section of law written immediately after the first, which Marion suggests is every bit as relevant, both reference the issue. I thank Denis and Marion for posting the excerpts of the laws and as many have suggested, I will be spending time digging into them myself. I will say this, the fact that there is disagreement towards how and which laws are relevant ought to give everyone a reason to pause and consider their position. By hey again, that's me. Also, none of us are going to be part of any decision in the future, or maybe I am just a little too pessimistic there.

While I am certainly no saint when it comes to getting a little too personal on this forum and in general, think a little ribbing or the occasional blown gasket is just fine, the frequency and degree to which some of you exhibit this behavior, without a speckle of remorse, is uncalled for and ugly. I do not wish any moderator to step in because I don't believe in that, but I do ask those of you who make a habit of it, and/or appear to take more pleasure in it than you do discussing the issues, think it over and maybe change it up a bit. I would say you know who you are, but maybe you don’t, so maybe take a moment of self-reflection and see if the shoe fits. Buy hey then again, this is free country, and stupid is as stupid does, so, do what you want. Again, just an opinion.

After all this talk of market value concerning fees and what that means to appraisers and what that means to the industry, I can’t help think what it would be like to get all the appraisers in the same room and ask a few show-of-hands questions (and yes Denis, your post got me thinking this).

#1 Would you agree that the AMC model is the most adverse influence in the appraisal industry?
#2 Would you agree that the typical fees paid by AMCs are reasonable?
#3 Would you agree that the typical fees paid by AMCs are customary, as compared to direct engagement work?
#4 Would you agree that the lower fees paid to appraisers in general, is the most significant reason you would not hire a trainee?
#5 Would you agree that the AMC model does not operate in a market system that is similar to any other in the US?
#6 Would you agree the AMC model is not a free market system, when compared to other markets for services in the US?

And after questions like these were asked and answered, wouldn’t these be something that could be used in the second part of the law posted by Marion, where it spells out how someone might judge or interpret the first part of law posted by Denis, referencing that any person could challenge the assumption of compliance by presenting alternate evidence?

I think it could. Though I also think the wording of the very same portion of the law makes that nearly impossible, when the law is written to say fees paid, instead of fees settled on. But I aint no lawyer, so…who knows. (And to that last part, maybe appraisers ought to be required to also hold law degrees, if we are to be expected to keep up and interpret all the laws around us. What would that say to fees in the C & R rules that state an appraisers qualifications and experience ought to be relevant to fees paid?)

So, when many on here have said they think the C & R laws are a bad joke, I would have to agree. Just an opinion.

Peace out on this one folks. Thanks to all for all.

PS – Hey J, does your head have enough knots in it yet? Or will you continue to keep beating it into the brick walls of others? Some of these folks can’t even respect you on a human level, so…you know…maybe pick your battles? They are just waiting for you to jumble a wording or idea (which you do sometimes my friend, slow down) so they can pounce for the sake of pouncing. The proof is in the pudding. They don’t agree. And if they really are as disgusted as their insults suggest, why do they continue to engage? They don’t expect you will see it their way either. See what I’m saying? While I do not agree with all, I think many of the points you presented in this thread have been excellent. Then again, I can read through when you jumble a bit and don’t hold you to a death sentence for it, just like I would review an appraisal and give the appraiser a break for not being perfect. Keep on keepin’ on, I gotta go get some work done.

 

[TRESinc]

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?

when you get paid for an appraisal is that considered a fee split between you, your software lease, your E&O provider, the power company, the water company, your mortgage note holder, your internet supplier, etc.? of course not. it's your fee just like the fee you quoted is $550 for SL. they then subcontract out to an appraiser for $400. it is not a fee split. it is the way business works.

We are willing to take the chance.

anyone else miss the all-appraiser meeting where we voted jgrant our national spokesperson?

 

[J Grant]

frecords- your well expressed post was excellent- many good point in it, and aside from that, you appropriately noted the nasty and rude behavior which goes beyond an occasional joke or sarcasm. It is consistently shown shown by a few individuals and I called it out as heckling. They turn a bulletin board into a bully-tin board.

While I disagree with Danny on certain points, I appreciate his level of respect and he faces some tough questions here yet keeps it professional and sticks to the topics.

 

[timd354]

wouldn’t these be something that could be used in the second part of the law posted by Marion, where it spells out how someone might judge or interpret the first part of law posted by Denis, referencing that any person could challenge the assumption of compliance by presenting alternate evidence?

You should really try to distinguish and understand what is the actual law/regulation and what is not. What was posted by Denis (and also myself) in this thread was the actual regulation regarding C&R. What was posted by Marion is not the actual regulation, but is interpretation and comments regarding the actual regulation. Before assuming that what is posted by someone who may or may not be a complete fool is true, you would be well served to check the veracity of the post for yourself.

It important to understand and distinguish between the actual regulation and an interpretation and comments published with the regulation, especially before you falsely accuse others of being dishonest by posting only half of a regulation and making yourself look completely ignorant in the process.

 

[hastalavista]

... I will be spending time digging into them myself. I will say this, the fact that there is disagreement towards how and which laws are relevant ought to give everyone a reason to pause and consider their position. By hey again, that's me. Also, none of us are going to be part of any decision in the future, or maybe I am just a little too pessimistic there.

Yours was a good post.

When you dig a little deeper, I'd like to hear your opinion on the following:

Here is an excerpt from the posted documents:

42(f)(2) Presumption of Compliance
1. In general. A creditor and its agent are
presumed to comply with paragraph (f)(1) if
the creditor or its agent meets the conditions
specified in paragraph (f)(2) in determining
the compensation paid to a fee appraiser.
These conditions are not requirements for
compliance but, if met, create a presumption
that the creditor or its agent has complied
with § 1026.42(f)(1). A person may rebut this
presumption with evidence that the amount
of compensation paid to a fee appraiser was
not customary and reasonable for reasons
unrelated to the conditions in paragraph
(f)(2)(i) or (f)(2)(ii). If a creditor or its agent
does not meet one of the non-required
conditions set forth in paragraph (f)(2), the
creditor’s and its agent’s compliance with
paragraph (f)(1) is determined based on all of
the facts and circumstances without a
presumption of either compliance or
violation.​

Now, let me give you my breakdown:

1. In general. A creditor and its agent are
presumed to comply with paragraph (f)(1) if
the creditor or its agent meets the conditions
specified in paragraph (f)(2) in determining
the compensation paid to a fee appraiser.
These conditions are not requirements for
compliance but, if met, create a presumption
that the creditor or its agent has complied
with § 1026.42(f)(1).​

Paragraph (f)(1) in the reference above outlines the requirement to pay independent fee appraisers C&R.
Paragraph (f)(2) is the presumption (#1) of compliance. There are two presumptions.
This paragraph reads (according to me) "A creditor is presumed to meet the C&R requirements if the creditor meets the conditions specified."
Those 'conditions' are a number of different requirements including competency, quality, etc, etc. They are outlined in Paragraph 42 (f)(2)(i)(A-F). These are the requirements for the 1st Presumption (the 2nd presumption is the VA fee or other 3rd party surveys). If you meet them, you are presumed to have complied.

Now, next the original excerpt says:

A person may rebut this
presumption with evidence that the amount
of compensation paid to a fee appraiser was
not customary and reasonable for reasons
unrelated to the conditions in paragraph
(f)(2)(i) or (f)(2)(ii).​

A person (any person, I suppose) can rebut presumption for any reason unrelated to the cited conditions. So, I could rebut it by saying, "Hey, I don't care what you guys did under Presumption #1, it isn't VA fees or non-AMC fees, so I'm calling you on it; you are not paying C&R."
The ability to rebut Presumption #1 clearly exists, and a fair reading is one can rebut it for reasons unrelated to the compliance requirements of Presumption #1.

Here's the final part of the excerpt (my bold for emphasis):

If a creditor or its agent
does not meet one of the non-required
conditions set forth in paragraph (f)(2), the
creditor’s and its agent’s compliance with
paragraph (f)(1) is determined based on all of
the facts and circumstances without a
presumption of either compliance or
violation.​

So, I can rebut Presumption #1 for any reason. But the regulation then says if the creditor does not meet one of the non-required* conditions set forth in paragraph (f)(2) [which is the requirements of Presumption #1] then compliance is determined based on all of the facts and circumstances without a presumption of either compliance or violation.
In other words, if rebutted but I've followed all the non-required conditions set forth in paragraph (f)(2), then I am in compliance. It is only when I don't meet those conditions that my case is "determined based on all of the facts and circumstances" and even then, I may be found to be in compliance.
One might ask, "if they are required to show compliance, why are they called 'non-required' in the regulation?"
It seems the answer is clear in the last bolded part of the excerpt above. Note that the second section says determination will be based on the specifics of the case. If the so-called non-required conditions were required, then one couldn't presume compliance or non-compliance; if required and not followed, the lender/AMC would be in non-compliance, period. That isn't what the regulation says. It allows for an individual case to be judged based on its circumstances even if all the 'non-required' conditions weren't followed.
An explanation of this seemingly illogicality may be this: Let's say the lender follows all but one of the non-required conditions in Presumption #1. But, by happenstance, it happens to pay the same rate as the VA schedule. The lender may have tried to claim it was following Presumption #1 but it didn't meet all the non-required conditions. But, by chance, its fees are the same as the VA. I think a complaint that they were not following Presumption #1 would be found to be moot since at the end of the day, wittingly or unwittingly, they were paying what is considered C&R under paragraph (f)(3).

One can rebut Presumption #1 all they want. But if a lender is in compliance with the 1st Presumption's non-required conditions, then compliance is no longer presumed to be in place but is determined to be in place.
Note that the excerpt above does not say, "Regardless if a creditor...does not meet one of the non-required conditions". It says "if a creditor...does not meet one of the non-required conditions."
That is a significant difference that determines if the lender (or its agent, the AMC) process can be evaluated outside of Presumption #1.

Indeed, this is how Louisiana found Coestar in violation of C&R. Coestar did not provide evidence of compliance with all the conditions set forth in paragraph (f)(2). Louisiana was right to charge them on Presumption #1 because they were in non-compliance.
Had Coestar been in compliance with Presumption #1, Louisiana's case would have (a) not been raised or (b) gone nowhere.


Anyway, that's my interpretation. As I said, I'd be interested to hear yours.