More AMC and PDC Bull

[sputnam]

you could of been a spokesperson for coester...

You missed my point entirely. I am not a fan of most AMCs... however, they are not all the same. The AMCs did not create middleman ordering and management of appraisal services. They took advantage of a regulation enacted by Congress. They are doing what businesses do... trying to make money. It's almost certain that the AMC system is not going away. It's legal. Many Lenders like it as it is easier and often cheaper for them as compared to having their own appraisal managers.

The big fail is the broad brush painting all AMCs as evil incarnate. As I have clearly stated, there are some AMCs that are good guys. Their business model is not trying to work the spread between what they charge and what they pay by lowering appraisal fees. Their approach is to ask the appraiser 'how much?' and adding the AMCs fee to the Client's invoice.

If you choose to not do work for a particular AMC, or any AMC... that is your perogative. However, blaming the AMCs for trying to maximize profits is lunacy. It's what every well run business on the planet does. You may, or may not, like the manner a particular company goes about that. If not... don't do business with them.

You can do what you want to. I don't do any of the things that are commonly complained about. I used to.. but I stopped and my income hasn't suffered. I don't accept fees that are lower than I require. I don't do daily updates. I almost never get revision requests and when I do it's a typo. I tell the AMC (more diplomatically but clearly)... 'My fee is $X. I will deliver the report on or before this date. I will not be providing updates unless there is something to say. If there is a problem or a question about something, I will contact you. Otherwise, you will not hear from me.' And then... I do exactly what I told them I was going to do. It works.. at least for me for the past 15 years or more. You do have to have some cojones to do it the first time... and turns out... it's a decent way to have the 'bad' AMCs stop bothering you.

One thing that puzzles me some is... Class has been the #1 AMC villain here for a while. Why are we still talking about them? Why are any of us dealing with them at all?

 

[Zoe]

You missed my point entirely. I am not a fan of most AMCs... however, they are not all the same. The AMCs did not create middleman ordering and management of appraisal services. They took advantage of a regulation enacted by Congress. They are doing what businesses do... trying to make money. It's almost certain that the AMC system is not going away. It's legal. Many Lenders like it as it is easier and often cheaper for them as compared to having their own appraisal managers.

The big fail is the broad brush painting all AMCs as evil incarnate. As I have clearly stated, there are some AMCs that are good guys. Their business model is not trying to work the spread between what they charge and what they pay by lowering appraisal fees. Their approach is to ask the appraiser 'how much?' and adding the AMCs fee to the Client's invoice.

If you choose to not do work for a particular AMC, or any AMC... that is your perogative. However, blaming the AMCs for trying to maximize profits is lunacy. It's what every well run business on the planet does. You may, or may not, like the manner a particular company goes about that. If not... don't do business with them.

You can do what you want to. I don't do any of the things that are commonly complained about. I used to.. but I stopped and my income hasn't suffered. I don't accept fees that are lower than I require. I don't do daily updates. I almost never get revision requests and when I do it's a typo. I tell the AMC (more diplomatically but clearly)... 'My fee is $X. I will deliver the report on or before this date. I will not be providing updates unless there is something to say. If there is a problem or a question about something, I will contact you. Otherwise, you will not hear from me.' And then... I do exactly what I told them I was going to do. It works.. at least for me for the past 15 years or more. You do have to have some cojones to do it the first time... and turns out... it's a decent way to have the 'bad' AMCs stop bothering you.

One thing that puzzles me some is... Class has been the #1 AMC villain here for a while. Why are we still talking about them? Why are any of us dealing with them at all?

Appraiser is not what like the lawsuit is focused on in California. The lawsuit is focused on commingling of fees and the borrower. It is only way to fight commingling of fees.

The only way appraisers could win is collective bargaining which would require a union. If that lawsuit wins for borrowers in California, appraiser would benefit from separation of fees on truth in lending disclosures. Some other State governments also on business tax.

 

[Zoe]

Appraisers don't have a unified National voice. Take plumbers, electricians, doctors, lawyer, truck drivers, etc..............they all have a unified national voice.

This lawsuit in California is not focused on the appraiser. It is focused on the borrower. I think the guy filing the lawsuit is a borrower. I think Morgan and Morgan may be involved which is one of the largest law firms in the Nation. They are not focused on appraisers.

Many law firms don't get paid unless they win for the plaintiff. The plaintiff here in CA lawsuit is a borrower.

 

[J Grant]

Most appraisers are not juvenile enough to believe that AMC;s are "evil". And we understand that they are legal - whether they operate legally with regard to usurious upcharges in their split of the appraisal fee could be decided by the courts in the pending consumer lawsuits.

My main issue with the AMC's, as I have often posted, involves the lenders as well, which is that the bundled HUD fee allows lenders free of hard cost AMC service, so of course the lenders love to use AMC's - ( and some lenders profit from the AMC if it is owned by the lender ). The other side of the bundled fee compensation model is that it allows the AMC a huge market share advantage.

If AMC;s had to compete like other free market businesses, where the AMC's customer ( the lender is their customer) had to pay a cost to use an AMC, what does anyone here think a lender would pay an AMC to process an appraisal order? I believe it would be $75 a file. ( or less ). If it were more, a lender would ditch the AMC and form their own panel again.

The AMC knows they could not get $200-$400 an order from a lender if the lender had to pay a hard cost. And the lender does not want to pay the AMC anyting if the lender has to bear the cost, and it is another charge to add to the borrower's application if the lender were to pass the AMC cost on to the borrower.

It is the unfair market advantage that the appraiser subsidizes by getting a split of the appraisal fee when a lender uses an AMC, as well as the usurious fee splits occurring.

 

[DWiley]

Most appraisers are not juvenile enough to believe that AMC;s are "evil". And we understand that they are legal - whether they operate legally with regard to usurious upcharges in their split of the appraisal fee could be decided by the courts in the pending consumer lawsuits.

My main issue with the AMC's, as I have often posted, involves the lenders as well, which is that the bundled HUD fee allows lenders free of hard cost AMC service, so of course the lenders love to use AMC's - ( and some lenders profit from the AMC if it is owned by the lender ). The other side of the bundled fee compensation model is that it allows the AMC a huge market share advantage.

If AMC;s had to compete like other free market businesses, where the AMC's customer ( the lender is their customer) had to pay a cost to use an AMC, what does anyone here think a lender would pay an AMC to process an appraisal order? I believe it would be $75 a file. ( or less ). If it were more, a lender would ditch the AMC and form their own panel again.

The AMC knows they could not get $200-$400 an order from a lender if the lender had to pay a hard cost. And the lender does not want to pay the AMC anyting if the lender has to bear the cost, and it is another charge to add to the borrower's application if the lender were to pass the AMC cost on to the borrower.

It is the unfair market advantage that the appraiser subsidizes by getting a split of the appraisal fee when a lender uses an AMC, as well as the usurious fee splits occurring.

If the lender has to pay the AMC fee, and cannot pass it along, then why not have the same treatment for the appraisal? If the lender paid the cost, then it would not have to even be on the disclosure form, and the whole "consumer is being misled" thing goes away.

Appraisal is also a "free of hard cost" (to use your words) service to the lender as well. That is why direct lenders are not as price sensitive - they are not the ones paying the cost. Over the years that has been to the benefit of appraisers. It seems you want to retain that benefit for appraisers, but not extend it to others.

 

[Zoe]

If the lender has to pay the AMC fee, and cannot pass it along, then why not have the same treatment for the appraisal? If the lender paid the cost, then it would not have to even be on the disclosure form, and the whole "consumer is being misled" thing goes away.

Appraisal is also a "free of hard cost" (to use your words) service to the lender as well. That is why direct lenders are not as price sensitive - they are not the ones paying the cost. Over the years that has been to the benefit of appraisers. It seems you want to retain that benefit for appraisers, but not extend it to others.

Lenders that direct engage are way more concerned about their loan portfolio and want a competent appraiser and don't use an AMC.

They have to answer to stockholders.

 

[Zoe]

There is no commingling of fees. VA has no commingling of fees to the Veteran.

 

[J Grant]

If the lender has to pay the AMC fee, and cannot pass it along, then why not have the same treatment for the appraisal? If the lender paid the cost, then it would not have to even be on the disclosure form, and the whole "consumer is being misled" thing goes away.

Appraisal is also a "free of hard cost" (to use your words) service to the lender as well. That is why direct lenders are not as price sensitive - they are not the ones paying the cost. Over the years that has been to the benefit of appraisers. It seems you want to retain that benefit for appraisers, but not extend it to others.

I am fine if the lender pays the cost for the appraisal! (though it is a specious argument). And it is likely the lender would pay less if they had to pay out of pocket. But if you want to go there, then why are the loan points a borrower pays covered by rolling it into the loan? If the borrower had to pay those points out of pocket, they would likely pay far less as well.

With this argument, I want to retain a benefit for appraisers but not extend it to others-that is not the case. The same benefit would be the AMC fee, separate from the appraisal fee, said AMC service fee disclosed to and covered by the borrower. Which is something I have been advocating for since day one. Why are you opposed to it?

Also, as it stands, it is not the same benefit! The appraiser fee covered by the borrower is disclosed upfront and is reasonable considering how labor-intensive each appraisal is. The AMC fee is covered by the borrowe) is not disclosed upfront, often is not disclosed at all, and moreover, can be a usurious amount, courtesy of the appraiser subsidizing it by their lower split of the appraisal fee.

 

[djd09]

You missed my point entirely. I am not a fan of most AMCs... however, they are not all the same. The AMCs did not create middleman ordering and management of appraisal services. They took advantage of a regulation enacted by Congress. They are doing what businesses do... trying to make money. It's almost certain that the AMC system is not going away. It's legal. Many Lenders like it as it is easier and often cheaper for them as compared to having their own appraisal managers.

The big fail is the broad brush painting all AMCs as evil incarnate. As I have clearly stated, there are some AMCs that are good guys. Their business model is not trying to work the spread between what they charge and what they pay by lowering appraisal fees. Their approach is to ask the appraiser 'how much?' and adding the AMCs fee to the Client's invoice.

If you choose to not do work for a particular AMC, or any AMC... that is your perogative. However, blaming the AMCs for trying to maximize profits is lunacy. It's what every well run business on the planet does. You may, or may not, like the manner a particular company goes about that. If not... don't do business with them.

You can do what you want to. I don't do any of the things that are commonly complained about. I used to.. but I stopped and my income hasn't suffered. I don't accept fees that are lower than I require. I don't do daily updates. I almost never get revision requests and when I do it's a typo. I tell the AMC (more diplomatically but clearly)... 'My fee is $X. I will deliver the report on or before this date. I will not be providing updates unless there is something to say. If there is a problem or a question about something, I will contact you. Otherwise, you will not hear from me.' And then... I do exactly what I told them I was going to do. It works.. at least for me for the past 15 years or more. You do have to have some cojones to do it the first time... and turns out... it's a decent way to have the 'bad' AMCs stop bothering you.

One thing that puzzles me some is... Class has been the #1 AMC villain here for a while. Why are we still talking about them? Why are any of us dealing with them at all?

i have missed no points...every conspiracy has come true...but USPAP requires the appraiser to be independent and you will never be with those snake oil salesmen around

 

[DWiley]

Why are you op

I don't think you can find any post where I have opposed the disclosure. When I point out that AMCs already make the disclosure to the lenders, that is just a fact. It is not opposition to additional disclosure to the consumer.

Frankly, I hope it becomes mandatory today. I don't think it would change a thing, but at least the debate would be over.