Is Uber The AMC Model ? Mit Study Says Uber Drivers Make Less Than Min. Wage

[J Grant]

The "internet" made me do it!

Yeah, like the telephone makes me lie or tell the truth when I speak on it. Okay....

 

[George Hatch]

I am well aware the AMC business ( which is not a fee shop) existed before internet. They were mostly called title management companies then and managed appraisals as a sideline for their title business, typically taking a very modest sum from appraisal fee such as 10% (I did fee work for one back in the day). These management companies kept that same business model after the internet, in fact nothing changed until the HVCC. Stop the spin that it was the the internet changed ordering, and lowered fees from AMC's it was the prohibition against direct loan officer able to order that changed it.

The Internet is a communication tool , it does not force people to behave in a certain way. Using the same internet, VA and direct order lenders DO NOT keep a fee profit for themselves from what is paid to appraisers, while an AMC does. Does the "internet" tell an AMC to keep a fee split from appraiser as profit rather than charging a lender for the service? I think not.

Is there a way to stop a false comparison to appraisals and "widgets", which can be mass produced in the millions, enabling their suppliers to charge less? An AMC is a fee skimming model, period. Stop comparing it to suppliers that actually produce something and can do so on a mass scale. If I dropped out of the market would do nothing for my competition on fee since I main work for direct order lenders with two "flat fee" AMC ordering depts for their lenders in the mix.

A profession such as appraisals should not need to starve people out to a severe under supply in order to stop fee skimming. An under supply creates problems of its own such as timely servicing to orders and availability of competent people to do the work. With same availability/supply of appraisers in regions, the clients paying C and R ordering direct pay a very different rate than AMC's, so supply and demand has little to do with fees paid for lender work , when profit back from the fee is off the table..

I am curious why you refuse to acknowledge the profit back to AMC as the cause of lower fees for AMC work rather than the "internet", and why you think appraiser attrition is the answer rather than eliminating the profit from fee skimming model for third party assignment and going to a cost plus or similar model .

Tell me why you think a bank would rather do business with an AMC than do business with you.

 

[J Grant]

The "internet" made me do it!

Yeah, like the telephone makes me lie or tell the truth when I speak on it. Okay....

Tell me why you think a bank would rather do business with an AMC than do business with you.

Because typically it costs the bank nothing to use an AMC, thus it saves the bank hassle and cost of keeping an appraisal panel/direct order ( though a bank may be able to a portion of fee for cost from fee bundled, correct?) The other reason is when a bank is affiliated with/owns the AMC or owns stock in an AMC and thus can profit by using it.

The above has NOTHING to do with the internet and your claim that "technology" made this happen. I recognize lenders pay the AMC,but it is a pass through payment from what a borrower paid for appraisal, rather than a cost to lender..

IF an AMC had to compete for lender business the same way other service providers compete, aka charging for their services rather than skimming it off vendors, problem solved.

A lender still is responsible for appraisal quality aka due diligence which is why perhaps a number of them do not use AMC.

Let me ask you a question, do you think AMC market share would be the same if a lender had to pay AMC for services apart from borrower paid appraisal fee?

 

[George Hatch]

You'be being very clumsy with your language. I never said the internet made it happen or that "the internet made me do it".

The internet didn't *cause* the aggregation of the market but it did enable it. Which IS what I said. If I had meant to say the internet caused it I would have said it that way. You should refrain from conflating the two in the future.

Because typically it costs the bank nothing to use an AMC, thus it saves the bank hassle and cost of keeping an appraisal panel/direct order ( though a bank may be able to a portion of fee for cost from fee bundled, correct?) The other reason is when a bank is affiliated with/owns the AMC or owns stock in an AMC and thus can profit by using it.

The question relates to the buyers' preferences as demonstrated by their actions. So if the banks prefer to use AMCs instead of direct engagement then where is the source of our fee problems?

How can any AMC pay you a substandard fee without the the patronage and enablement and even encouragement of the buyer of that appraisal?

 

[George Hatch]

Let me ask you a question, do you think AMC market share would be the same if a lender had to pay AMC for services apart from borrower paid appraisal fee?

Who is going to force the lenders to do that? And how would they go about doing it?

See, that's what you're really praying for - government intervention in that market for services, for the sole purpose of protecting your preferred business model. Moreover, what you need here is a restriction on the lender's conduct, not on the AMC conduct.

Think about that for a moment and then tell us which party you think that kind of restriction indicates is your real problem.

But to answer your question, I think that if the govt forced the lenders to pay the AMCs from their end, the AMCs would still have to compete for business the same as they do now.

So if the lenders are choosing between AMCs, on what basis do you think will those AMCs be competing for business?

 

[J Grant]

"George Hatch, post: 2825820, member: 66065"]You'be being very clumsy with your language. I never said the internet made it happen or that "the internet made me do it".

The internet didn't *cause* the aggregation of the market but it did enable it. Which IS what I said. If I had meant to say the internet caused it I would have said it that way. You should refrain from conflating the two in the future.

What does "aggregation " of the market have to do with the HVVCC unique to this profession limiting ho can order an appraisal, causing a shift to ordering to third party companies getting their profit from the vendor ? You are saying a versio of internet "caused " this, by attributing third party fee gouging to ability of abiltiy of technology to "aggregate " the market. The same "aggregation is available to clients who do not use or engage a third party that fee gouges from apprisal vendors, or if they use an AMC , they instruct them to pay a flat rate in an area rather than fee shop to assign.

The question relates to the buyers' preferences as demonstrated by their actions. So if the banks prefer to use AMCs instead of direct engagement then where is the source of our fee problems? The source of the fee problem is bundled fee provision, allowing no cost to bank service from an AMC. Would the buyer/aka bank preference to use an AMC be the same if bank had to pay them for the service ? Would buyer preference be the same if they were prohibited from owning an AMC or stock in one to profit back from the service ?e

How can any AMC pay you a substandard fee without the the patronage and enablement and even encouragement of the buyer of that appraisal?

I never said this was not in play, both our views converge on this topic, that there is an enabling of the AMC from the buyer of service ( bank) resulting in substandard fees, due to the unusual form of payment coming from a bundled fee provision . Unlike that of a normal business, where a company pays for a service. To sum up, a bank either gets no cost service or can own an AMC or stock in it and profit from using it. THAT is the problem of ennoblement as you cal it.

If an AMC is a vendor to their customer the bank then let banks pay for an AMC service as its own service not contingent on appraisal fee to appraiser.

 

[hastalavista]

All this hubbub on a post that asks a question if Uber has any similarities to the AMC dynamic.
I guess some people don't believe it is worthwhile to take a few steps back and look at bigger pictures for similarities (rather than just excluding them altogether because one sells an apple and the other an orange).

 

[George Hatch]

None of that touches the questions I'm asking you.

Let's say that the government intervenes in the appraisal market. For you. From now on the banks have to pay the AMCs out of their end, and the "appraisal fee" will be broken out in a separate line instead of as part of a bundled service.

In that manner the $250 that the bank charges the borrower for the appraisal gets stated that way in their closing statements.

How does that affect the manner in which the AMCs compete with each other for business?

 

[J Grant]

George Hatch, post: 2825822, member: 66065"]Who is going to force the lenders to do that? And how would they go about doing it?

See, that's what you're really praying for - government intervention in that market for services, for the sole purpose of protecting your preferred business model. Moreover, what you need here is a restriction on the lender's conduct, not on the AMC conduct.

Govt does not have to force anybody to do anything, all they need to do is eliminate the bundled fee provision in the HUD, or clarify it that the secondary service ( ordering ) to first party service ( appraisal) that the service amount be only for expenses, not profit. The AMC could then charge a bank for its service to make whatever profit it can make .


Your version... I want to protect my preferred business model, all I ask is the AMC 's stop getting a govt sponsored entitlement that protects THEIR business model in the form of bundled fee provision allowing present fee splits of an appraisal fee.

Think about that for a moment and then tell us which party you think that kind of restriction indicates is your real problem.

But to answer your question, I think that if the govt forced the lenders to pay the AMCs from their end, the AMCs would still have to compete for business the same as they do now.

The AMC's would not be able to compete for business the same as they do now, if bundled fee provision dropped or regulation changed that any fee split of an appraisal back to lender or AMC is just for cost to lender, not a profit , problem solved. Let AMC charge the profit to a lender or bank See how much market share they would then have, if they thrive on that basis, fine. But they would not be competing the way they do now, the way they compete now is a govt entitlement from bundled fee provision allowing a lender o use an AMC free of cost or the lender to profit from it. o.

This field is rife with regulations so don't start in with why should govt intervene to protect our fees.., govt has already intervened to benefit the lenders and banks at expense of appraisers. The correction for this was supposed to comee from C and R whichs is difficult to enforce thus it is not working. Correcting an easy to repair regulation on the HUD is better imo than your solution which is starvation and attrition of appraisers over a period of years to reach an under supply forcing an AMC to pay more.

So if the lenders are choosing between competing AMCs, on what basis do you think will those AMCs be competing for business?

They mainly offer free service to the lender, so they compete on turn time /QC, or if a lender owns the AMC or owns stock in them, clearly that is an incentive for a lender or bank to use that AMC.

 

[J Grant]

None of that touches the questions I'm asking you.

Let's say that the government intervenes in the appraisal market. For you. From now on the banks have to pay the AMCs out of their end, and the "appraisal fee" will be broken out in a separate line instead of as part of a bundled service.

In that manner the $250 that the bank charges the borrower for the appraisal gets stated that way in their closing statements.

How does that affect the manner in which the AMCs compete with each other for business?

I doubt the $250 fee would be the fee but using your figure or any other appraisal fee to appraiser, if an AMC can no longer free of cost service to lender by fee split form borrower paid covering profit to AMC, the AMC's would compete on THEIR AMC fee to lender, such as one charges $100 per appraisal order and the other AMC charges $75 an order, or yearly retainer negotiated or QC or any other manner they wish to compete on.

The problem is the loophole in bundled fee provision allowing appraisal fees splits for profits to parties other than the appraiser, rather than fee to appraiser and any split of it only for coverage of expenses related to the appraisal order. I'd rather see that fixed, you'd rather see appraisers starved out over the years to reach an under supply. That seems to be the difference between us far as I can tell.