More AMC and PDC Bull

[Terrel L. Shields]

It seems very odd that a lender would personally confide that to you.

My lenders do talk to me but rarely about fees. OTOH, borrowers often look at the TOTAL good faith estimate of closing costs and I know several borrowers who chose banks who had lower GFE's. Some realized the difference as so great as to be equal to a measurable total cost of the loan.

 

[George Hatch]

My clients sometimes win deals based on the total fees and sometimes lose deals based on the total fees. (same as me) They do not operate in an uncompetitive marketplace.

 

[J Grant]

Lender total fees contain a lot more expensive items than the appraisal, typically.

Everybody knows lenders compete in a competitive marketplace. A number of us have worked as RE agents, and we worked a lot more closely with lenders than we do now on the valuation side.

Do lenders win a loan based on a small differential in the appraisal fee? I highly doubt it, based on six years as a RE agent prior to appraising, working with buyers and lenders, going to closings, twice sharing office space with mortgage brokers. The appraisal is among the mostamong the fees in most cases. It only matters a bit because it is one of the few fees borrowers pay upfront out of pocket. T?The rest get rolled into the loan or might come out of proceeds at closing, with some able to be paid by the other party, such as in a concession.

Assuming The total loan costs are in a reasonable range of other lenders, most buyers are concerned with the interest rate, the down payment, or a big ticket item like loan points.

 

[J Grant]

A lender can easily shave a few hundred bucks off their points or origination fees (in the thousands of dollars ) rather than lose a deal due to a few bucks over an appraisal, or any other differential in total costs if that is a deal breaker for a borrower.


Borrowers can negotiate mortgage points and origination fees, as these are lender-specific charges. Lenders are often willing to lower or waive these fees, especially if you have a strong credit score, a banking relationship, or competitive quotes from other lenders. Negotiation is most effective when comparing multiple Loan Estimates.

 

[chad hampton]

Aren't appraisal fees the lowest fee on a closing statement? They have been on every property I ever bought.

 

[alebrewer]

A lender can easily shave a few hundred bucks off their points or origination fees (in the thousands of dollars ) rather than lose a deal due to a few bucks over an appraisal, or any other differential in total costs if that is a deal breaker for a borrower.

The crazy part is that you really believe this...

 

[J Grant]

The crazy part is that you really believe this...

Why is that crazy?

I negotiated RE contracts as a RE agent for six years prior to becoming an appraiser. Went to many closings. Saw many good faith estimates. Worked in shared offices with mortgage brokers

Lenders can negotiate their own points and fees, correct?

 

[alebrewer]

Why is that crazy?

I negotiated RE contracts as a RE agent for six years prior to becoming an appraiser. Went to many closings. Saw many good faith estimates. Worked in shared offices with mortgage brokers

Lenders can negotiate their own points and fees, correct?

Of course they can, but there's a giant divide between can and will. If I'm a lender, I ain't shaving nuthin off nuthin. I'm just moving on to the next appraiser - you know - the one who will do it for less.

 

[J Grant]

Of course they can, but there's a giant divide between can and will. If I'm a lender, I ain't shaving nuthin off nuthin. I'm just moving on to the next appraiser - you know - the one who will do it for less.

You are projecting and guessing what YOU would do if you were a lender, but that is not how most of them operate. They already know what the appraisal fee is for most normal res non-complex orders. It is already established with their own panel or with an AMC if they use an AMC. A lender does not have time to dick around with different appraisers over a few bucks on each deal they quote borrowers for.

The lenders have a close range of title and RE appraisal fees they work with on regular properties for the good faith estimate. If a borrower is threatening to go to another lender because of the total costs, a lender can shave $ off their points or fees. Whether they choose to do so or not can be deal-specific.

A high end or complex property that needs an appraisal quote is another matter. Though many lenders now also have a wide range of higher fees they charge for jumbo loans, up to a point where a custom quote is needed.

The entities with the incentive to dick around with appraisers over their appraiser portion of the appraisal fee for regular orders are the AMCs, because that is how they make their profit.

A lender makes their profit from the loan, not from keeping a split off an appraisal fee.

 

[alebrewer]

You are projecting and guessing what YOU would do if you were a lender, but that is not how most of them operate. They already know what the appraisal fee is for most normal res non-complex orders. It is already established with their own panel or with an AMC if they use an AMC. A lender does not have time to dick around with different appraisers over a few bucks on each deal they quote borrowers for.

The lenders have a close range of title and RE appraisal fees they work with on regular properties for the good faith estimate. If a borrower is threatening to go to another lender because of the total costs, a lender can shave $ off their points or fees. Whether they choose to do so or not can be deal-specific.

A high end or complex property that needs an appraisal quote is another matter. Though many lenders now also have a wide range of higher fees they charge for jumbo loans, up to a point where a custom quote is needed.

The entities with the incentive to dick around with appraisers over their appraiser portion of the appraisal fee for regular orders are the AMCs, because that is how they make their profit. Lovlely little leeches they are, sucking $ from the most poorly paid and hardest working on the RE food chain.

A lender makes their profit from the loan, not from keeping a split off an appraisal fee.

Of course, you're exactly correct. Your intimate knowledge of lending - stemming from your years as a RE agent - is vastly superior to my history of actually working for a lender for most of my career. No comparison - I get that. And for that, I bow to your vastly superior sagacity.

That said, we are 100% direct engagement and offer a very fair 'base' fee. We pull assignments from appraisers invoking silly upcharges every day - we do not (as you like to believe in that silly little head of yours) 'shave fees' off the lenders' commissions.