Hybrid Appraisals

[J Grant]

HARD Stop we helped manage a direct lender's in house fee panel for 8 years and paid 100% of what we collected directly to the appraiser the order was sent to. At that time the average was $450.00. The company covered reviews, tech QC and ordering and receiving the appraisals and the 1,000 Sf Ft office space, utilities and three hourly employees at $15.00 to $20.00 per hour.

After 2022 year end and accounting and tax preparations the CPA had a hour visit with the lender's owners, myself and a manager. He advised us that we lost on average $200.00 dollars per appraisal ordered,delivered, reviewed and funded and some less and some more. The owners realized to cover in house orders a gross fee of $650.00 plus would have to be collected from borrowers. Then we had to seperate the fees say $450 to appraisers and $200.00 to XYZ Funding.

That wouldn't fly because borrowers would say what's the extra $200 for ? They don't believe we do anything but they do believe a big AMC with a big Name Like Copper Logic who has brochures the loan officers can give them showing a Team of Young hot chicks on giant computer screens with data streaming.

Those borrowers believe the AMC is worth the $200.00 to assure their appraiser and quality is done right.

There ya go it costs too much to manage your own fee panel and it was easier for that lender to contract with AMC who if borrowers complained about fees or the appraiser it was easy to have loan officers blame the AMC. If it was easy or made money there wouldn't be any AMCs it's worth every dime to have them manage your appraisers.

Something is off with this post

Who is the "we" ( we helped manage )? What entity or company is it (or was it a person on staff ) that helped manage a direct lender's in-house panel? ?

Once again, if the lender gets free-of-cost service from an AMC, which they typically do ( via the bunded fee split ) I understand why lenders use them. Of course free of cost is cheaper than the cost to run a panel. Of course control over the quality of the panel benefits some lenders or wholesalers so they choose that route.

I must have commented a thousand times on the board that I understand why , since they pay virtually nothing, the lenders choose an AMC.
I understand it so well, I break it down for people, because that FREE of cost service to the lender is why the AMC:s have that tremendous market share they do. What other business gets teh incredible govt perk of a bundled fee so the business does not charge their customer? I can not think of any other business, and the rest of the appraisal world, whether residential or commercial, that orders witiut a third party ( AMC ) splitting the fee, does not operate that way either.

 

[Joe Flacco]

Whenever he says "we" he is talking about his daddy.

 

[Zoe]

Something is off with this post

Who is the "we" ( we helped manage )? What entity or company is it (or was it a person on staff ) that helped manage a direct lender's in-house panel? ?

Once again, if the lender gets free-of-cost service from an AMC, which they typically do ( via the bunded fee split ) I understand why lenders use them. Of course free of cost is cheaper than the cost to run a panel. Of course control over the quality of the panel benefits some lenders or wholesalers so they choose that route.

I must have commented a thousand times on the board that I understand why , since they pay virtually nothing, the lenders choose an AMC.
I understand it so well, I break it down for people, because that FREE of cost service to the lender is why the AMC:s have that tremendous market share they do. What other business gets teh incredible govt perk of a bundled fee so the business does not charge their customer? I can not think of any other business, and the rest of the appraisal world, whether residential or commercial, that orders witiut a third party ( AMC ) splitting the fee, does not operate that way either.

The worst part is truth in lending disclosures to a borrower are basically a lie. No truth on appraisal fee on truth in lending disclosures. The original bill was not written that way. AMC and APPRAISAL fees were to be separated on truth in lending disclosures in the original bill. At that time, some large lenders owned part of an appraisal management company. They lobbied congress and got fees commingled.
Ms. Joan Trice was involved also.

 

[Zoe]

Some lenders get kickbacks from some appraisal management companies because they own part of the appraisal management company. That is not ethical imho. It is like hidden fees and charges.

It is not ethical.

 

[alebrewer]

In a corrupt system, that is the case. When corruption is removed, what should be, then is -

At least for about half the people.

 

[ucbruin]

Ethics are for suckers and losers....

 

[TC]

Ethics are for suckers and losers....

Trump quote?

 

[J Grant]

Ethics are for suckers and losers....

Ethics are for the little people.

(a play on Leona Helmsley's famous quote- "Taxes are for the little people.")

 

[TC]

Please don't buy into the blame tech falsehood.

Technology has nothing to do with AMC low fee solicitation. It existed the day the HVCC passed as it does now. The low fee is due to regulators being influenced when they changed the second provision for AMC to use their own surveys to evade the intent of C and R.

Tech or no tech, the lenders do not engage in fee shopping, the AMC s do. It is low tech, the AMC's mass email bids or compares fees internally.
Using portals does not determine the fee.

I understand the reasons behind the low fees for appraisers. However, it's hard to deny that technology is reducing the need for certain appraisal tasks. For instance, when someone takes out a $25,000 HELOC with 100% equity in their home, is a full appraisal really necessary? I suspect you're a one-person operation, like many of us. Prior to the mid-90s, it was very challenging to work independently without a staff, a full office, and secretaries. While technology has empowered many of us to operate on our own, it’s also likely to eliminate a significant amount of appraisal work.

 

[Zoe]

I won't even get into stealing of intellectual property from appraisers which is also not ethical.