3.6 Crunch Time

[J Grant]

Okay they're miserable and just desperate for any work they can find and their lying and afraid that if they say it sucks, they will end up fired then end up at Walmart or driving for lyft.

Its probably a mix of both, to be fair. I doubt anyone loves working for an AMC, some might be okay with it, others miserable ...idk. The salaries are low and it sounds like a grind.

 

[Overimprovement]

SFREP and Freedom also don't mine and resell, haven't looked into the others. But if they are VC funded, their biz model is generally data mining as revenue from software licenses is small peas in comparison.

Every 3.6 report, regardless of software vendor, will have its data mined to high heaven and back. Why does everyone think it is cloud based?

I have done modeling, and the more data, the better the model. Yes, some real appraisals will be needed going forward to keep the models accurate and current, but I would put that at 25% of purchases. But even there, as AI and non-appraiser picture recognition and measurement improves, that number may sink lower and still provide a statistically acceptable potential value error to the GSEs.

 

[Essexfenwick]

I don't understand how AMCs can employ appraisers and accept jobs directly. I thought they were supposed to randomly assign appraisals among appraisers and be an intermediary between mortgage companies and the appraiser to avoid the temptation to hit values. Did that law change.

 

[chad hampton]

I don't understand how AMCs can employ appraisers and accept jobs directly. I thought they were supposed to randomly assign appraisals among appraisers and be an intermediary between mortgage companies and the appraiser to avoid the temptation to hit values. Did that law change.

No, just ignored and not enforced. It’s a problem in this field.

 

[J Grant]

I don't understand how AMCs can employ appraisers and accept jobs directly. I thought they were supposed to randomly assign appraisals among appraisers and be an intermediary between mortgage companies and the appraiser to avoid the temptation to hit values. Did that law change.

Yes, the law changed way back with the HVCC, when stakeholders lobbied to allow AMCs to hire staff appraisers. The corrupt, or weak-( take your pick-) regulators amended the original AMC law drafted, along with adding a second C and R provision that allowed AMCs to use their own fee surveys for C and R.

The rest is dismal history.

It is not a case of the AMC's breaking the law. They are too slick for that. It is an example of the law being changed to the benefit of those with enough power and influence.

 

[Non Sequitur]

Did that law change.

Safe and sound practices are being ignored, just like the creation and funding for the IVPI was ignored.

 

[J Grant]

Safe and sound practices are being ignored, just like the creation and funding for the IVPI was ignored.

Yup. When the laws are corrupted and regulations weakened, companies can act within the law and cause great harm.

Justice and legality are not the same thing. What is ethical and what is legal may not be the same thing. One might assume a set of ethics would be in play with entities and agencies tasked with a mission of public trust -but that has gone AWOL.

We saw the law and lax regulations allow unsafe practices by allowing predatory and unsafe lending practices in the run-up to the housing market crash.

 

[chad hampton]

I’m not aware of any law that says the AMC middleman is permitted to now have staff appraisers. I am aware of laws that state the AMC must employ a panel of fee appraisers who are independent of the AMC.

In 2010, the roles of AMC has changed. Prior to that they were large appraisal companies that typically had one or two bank clients. In many cases, they were subsidiaries of those banks. In 2010 they became third-party middleman. Should be clear that that means they have to use another party to do the appraisals.

I do give them credit for trying to play by the rules for about a decade. It was only a few years ago when you started seeing ads for staff appraisers for class valuation all over LinkedIn.

 

[J Grant]

AI-
The Home Valuation Code of Conduct (HVCC) did not change to allow staff appraisers because it was retired in 2010 and replaced by the Dodd-Frank Act's Appraiser Independence Requirements (AIR), though the core firewall separating loan production from appraiser selection remains. Lenders and AMCs have always been permitted to use staff or in-house appraisers, provided strict structural separation from sales and loan production staff is maintained. [1, 2, 3, 4, 5, 6, 7, 8]

Key Facts on Appraiser Independence and Staff Appraisers

• • Retirement of HVCC: The original HVCC sunset in 2010 and was codified into federal law via the Dodd-Frank Act and Regulation Z. [1, 2]
  • Staff Appraiser Rules: Using staff appraisers is fully allowed as long as the employees ordering or performing the appraisals have no financial or commission-based stake in loan production. [1, 2]
  • The Firewall Concept: Anyone compensated on a commission basis (like loan officers or mortgage brokers) cannot select, engage, or have substantive communication with staff or panel appraisers regarding valuation outcomes. [1, 2, 3]

 

[chad hampton]

They do bend over backwards and do enough spin to make it seem like maybe, possibly, sort of, it’s OK.