Fannie Mae REO switching to AMCs

[Zoe]

This article stops short of a solution. While disclosure is better than keeping it hidden, the borrower ALSO needs to know not just that a huge chunk of their $ went to the AMC, but that the AMC held a flea market type auction to get the cheapest bid to assign the order, bypassing other, more experienced appraisers. THAT might interest a borrower. Investors and the public need to know that.

And beyond the disclosure, for a solution, the AMC getting paid from the fee split from the bundled fee needs to stop. Just eliminate it with a simple piece of legislation, or cap the % an AMC can take as a split of the borrower covered appraisal fee. Let the lender pay a separate out-of-pocket fee to the AMC that the lender chooses. Since the lender benefits, they should pay for a service that benefits them.

Otherwise, the profession will continue to circle the drain. It will not attract or keep quality people with such low fees, though there are some entities that do not use AMCs and order direct; there is not enough of that work to go around. The standards get lower and lower to attract and keep people who will put up with such awful fees and they still can barely get anyone to sign on. PAREA had only a trickle of people take the course and graduate for good reason.

Unfortunately from an appraiser standpoint, collective bargaining is probably the only solution appraisers have which would require a union.

From a consumer standpoint and public trust standpoint, the consumer has much better support from government officials already in place. I think that is where the lawsuit in California and maybe another one in your State (Florida) is going on. There may be more than one lawsuit going on at the moment.

If even one of those lawsuits succeeds, it could swing the whole momentum nationwide to/from other government entities and Congress.

 

[J Grant]

I'm 110% in favor of mandatory full disclosure and transparency. I have maybe 10% confidence that it will change anyone's behavior or result in higher splits for the appraisers.

Meanwhile, and WRT to the inflexible (or less flexible) supply of appraiser hours

• When lenders compete, appraisers win
• When appraisers compete, lenders win

The fact that it might not result in higher fee splits for the appraiser is yet another reason why the fee split system to compensate the AMC needs to be abolished. It might not serve to change the $ % of fee splits because the disclosure comes AFTER the appraisal is already done, when it is too late for the borrower to object. And it is not full disclosure since it fails to state HOW that low fee to the appraiser was procured - from a flea market style bid to find the cheapest.

The solution is for the AMC needs to charge their lender customer a hard cost for the AMC service, just like every other business charges their customer a cost for a service or product.

That said, mandatory disclosure of fee splits would be a step in the right direction. Which is why the stakeholders have been resisting it for so long.

 

[Zoe]

The fact that it might not result in higher fee splits for the appraiser is yet another reason why the fee split system to compensate the AMC needs to be abolished. It might not serve to change the $ % of fee splits because the disclosure comes AFTER the appraisal is already done, when it is too late for the borrower to object. And it is not full disclosure since it fails to state HOW that low fee to the appraiser was procured - from a flea market style bid to find the cheapest.

The solution is for the AMC needs to charge their lender customer a hard cost for the AMC service, just like every other business charges their customer a cost for a service or product.

That said, mandatory disclosure of fee splits would be a step in the right direction. Which is why the stakeholders have been resisting it for so long.

George didn't major in marketing. He majored in criminal justice. He don't understand how it would change the whole market structure. The whole market structure changed when the law got changed where fees were supposed to be separated on truth in lending disclosures and got changed at last minute for fees to be commingled because it would be too confusing.

 

[Flakey]

I would like to see how the supplemental requirements compare to what Fannie wanted direct. I bet it's not better.

 

[Zoe]

That is like saying separation of fees on truth in lending disclosures would be misleading.

Separation of fees would not be transparent.

Separation of fees would be too confusing.

 

[Non Sequitur]

I would like to see how the supplemental requirements compare to what Fannie wanted direct. I bet it's not better.

It’s been a long time, but I remember they wanted a minimum of two photos for each room showing opposite sides, and basically all of the typical overlays you would see for a mortgage report. I only accepted a couple a few years ago when Fannie started the transition to see how it would go. It was a nightmare.

 

[Sadie]

It’s been a long time, but I remember they wanted a minimum of two photos for each room showing opposite sides, and basically all of the typical overlays you would see for a mortgage report. I only accepted a couple a few years ago when Fannie started the transition to see how it would go. It was a nightmare.

Photos of all required repairs, across the street, street both directions, to the rear and a photo of all rooms.

 

[Mike Ault]

Photos of all required repairs, across the street, street both directions, to the rear and a photo of all rooms.

Did they drop the "two photos of every room from opposite corners" requirement that NON was talking about? I remember those as well.

 

[Zoe]

Fannie is not a lender and does not set scope of work. What is wrong with you people?

Are you insinuating you are an employee of Fannie?

The IRS might consider your thoughts.

 

[Mike Ault]

Fannie is not a lender and does not set scope of work. What is wrong with you people?

How many of these URAR certifications have you ever signed? Those aren't "lender requirements".