AMC Allocation of Commercial Jobs?

[Zoe]

Market structure is the key when it breaks anti-trust law. When a market participant has extraordinary power on price, it is anti-trust law violation.

It is no longer a free market.

 

[Zoe]

The exception literally proves the rule. You cannot get the fees you want from an AMC because at the stabilized volumes there are enough of your competition who are willing (and apparently able) to work for less in lieu of not working at all. The AMCs literally don't need appraisers at the higher fees unless/until the demands peak far beyond normal.

Not even you can claim that fee appraisers are enslaved.

I would call it enslaved due to market structure and anti-trust law violations. Anti-trust law focuses on market power on price in illegal market structure.

 

[George Hatch]

So sue the FTC to get them to reverse their interpretation of the C&R elements in D-F. It's a noble aspiration (which I support), but after this many years it appears to be an unlikely outcome.

You guys had better HOPE the post mortems from the next market correction demonstrate a significant adverse affect that would be attributable to overvalutions by the low-cost AMC appraisers. Because if no proof of significant losses can be attributed to the current engagement patterns then the AMC programs will never be outlawed.

Think about it: how likely do you guys think it is that such losses from gross overvaluations will be demonstrated the next time the RE markets tank?

Here's the majic outcome you guys are looking for:

(this loan was grossly overvalued at the inception of this loan because the AMC selected the low-cost appraiser who proceeded to screw up the value conclusion)​

Because that's the kind of conclusion that led to outlawing the use of MB-controlled appraisals.

 

[Zoe]

Separate fees on truth in lending disclosures between appraiser and appraisal management company and market structure changes closer to free market.

 

[Zoe]

So sue the FTC to get them to reverse their interpretation of the C&R elements in D-F. It's a noble aspiration, but after this many years it appears to be an unlikely outcome.

You guys had better HOPE the post mortems from the next market correction demonstrate a significant adverse affect that would be attributable to overvalutions by the low-cost AMC appraisers. Because if no proof of significant losses can be attributed to the current engagement patterns then they will never be outlawed.

Will you go with me for the obvious anti-trust violations? I am pretty good speaker. We will get a good lawyer.

 

[George Hatch]

Depends. I have yet to see an argument that will clear the legal barrier for a reversal. Because "AMCs are greedy" isn't going to be persuasive in court, and neither will "the FTC interpretation is illegal". IMO.

I like appraisers and I want to see everyone thrive, but not enough to waste my time/effort on arguments I can clearly see will never resonate in court.

 

[J Grant]

You didn't just switch to digital imagery. You also switched from buying forms, paying typists to transcribe to those forms using IBM selectrics and white-out, you switched from dot-matrix to laser printers, you switched from micro-fiche and the costs of buying/maintaining those viewers to CD-ROMs and then later to all-online, you switched from MLS books to pay-by-the-minute modem access to the MLS and later to internet access, you switched from the heat sensitive paper those viewers used, you switched from using faxes and answering machines and receptionists to take calls for you, you switched from beepers to smart phones, you switched from paying couriers to deliver to sending PDFs and XMLs.

You have diverted a number of your business-related purchasing decisions from one type of goods/services to others as a direct result of technology and you didn't give two seconds of thought about how those decisions adversely affected the revenues at your former vendors. None of us did. Because none of those choices were personal to us, it was just business.

It doesn't matter how much the AMC gets paid; your fee is still the result of (generic) you competing with the other appraisers on that panel. If it comes to pass that the AMCs end gets fixed at $10/assignment they're still going to shop appraisal fees by price and you're still going to end up with $150 appraiser splits in the event of a big slowdown in the market for 1004s. Whether they thrive or fail at whatever their end is will be immaterial to how the fee competition between appraisers turns out. The borrower might end up paying less overall for the combo but in no case will the appraisers be getting paid more unless that AMCs run out of alternative vendors to pit against each other.

So what? Appraisers, as afractional sliver of the demand, had no impact on the worldwide shift for tech that changed with typewriters or digital film. Many in those industries adapted just fine.

The AMC was a deliberate move by a small number of stakeholders to capture profit.

 

[George Hatch]

Asked and answered. D-F was a hit on the lenders and added prohibitions to their conduct. It didn't bestow any rights on anyone in the origination process or create any new industries. AMCs had already existed in that form and sold bundled fees long before the HVCC..

"the stakeholders ( whatever that means) acted to capture profit" isn't even an argument. It's just a complaint.

 

[J Grant]

Depends. I have yet to see an argument that will clear the legal barrier for a reversal. Because "AMCs are greedy" isn't going to be persuasive in court, and neither will "the FTC interpretation is illegal". IMO.

I like appraisers and I want to see everyone thrive, but not enough to waste my time/effort on arguments I can clearly see will never resonate in court.

IMo, the lenders fear bad publicity more than a lawsuit. If appraisers pool resources and write some articles about how the AMC fee predation results in the lowest competence getting assigned appraisals to profit middlemen/ provide free service to lenders, that might impact things.

Or a lawsuit wrt restraint of trade.

Or none of it might happen. But the facts need to be out there to cut through the spin- fwiw

 

[George Hatch]

Well, I agree with you that working on public opinion might be effective in swaying the decision making among the politicians. I'd be interested to see what angles it would take to make a restraint of trade case stick when there are so many AMCs out there, but maybe that's another possibility.