AMC Allocation of Commercial Jobs?

[J Grant]

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 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.

Yes, the AMC's existed before HVCC, but had a very low market share wrt appraisals; they were mostly doing title work, and any appraisal management was a loss leader. The HVCC changed their market share overnight, and what used to be a small % charged as a bundled fee became almost half a fee split, going to third-party intermediaries, and an almost overnight vast shift of market volume. This saw appraisers lose their direct clients overnight, with the same assignments sent to themfrom an AMC at half the former fee.

Of course the stakeholders acted to capture profit !! What else was it? They could have opted for the lender ot pay a cost charge to the AMC instead of the fee split of a HUD bundled fee - you stated in this thread it is an option. An option they did not, and do not, take because it does not profit AMC middlemen, often affiliated with or owned as a division of a lender.

 

[George Hatch]

The bundled fee was a a feature at the AMCs from the outset, same as it was when the lenders ran their own internal appraisal depts. I personally knew some of the principals back when I was teaching their in-house CE sessions. Starting in the mid-1990s.

When I worked on staff at the bank I never once got paid the entire "appraisal fee" that the borrower was charged. I might have gotten paid as much as 50% when the assignment involved an SFR. The rest got eaten up in the fixed/variable overhead and management via their accounting practices.

It was the lenders who increased their levels of AMC participation. In lieu of going to direct engagement.

 

[J Grant]

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. They are not experiencing a shortage of appraisers yet, otherwise you could get your fees from them. And we have good reason to fear that PAREA and reductions in experience criteria will effectively prevent a economic parity between the appraisers and the lenders and their AMCs for the foreseeable future.

Not even you can claim that fee appraisers are enslaved. What's happening is that nobody is protecting them from the decision making of their peers.

I never said fee appraisers are enslaved. You're making this silly accusation, which is what I mean by gaslighting!

Appraisers don't need protection from the decision-making of their peers - appraisers need protection from a system that badly skews the supply /demand and restraint of trade with regard to fee splits.

I am not even affected by it ( accept as an existential threat ), but seeing this gaslighting and spin, right after you deny doing it is incredible!

 

[J Grant]

The bundled fee was a a feature at the AMCs from the outset, same as it was when the lenders ran their own internal appraisal depts. I personally knew some of the principals back when I was teaching their in-house CE sessions. Starting in the mid-1990s.

When I worked on staff at the bank I never once got paid the entire "appraisal fee" that the borrower was charged. I might have gotten paid as much as 50% when the assignment involved an SFR. The rest got eaten up in the fixed/variable overhead and management via their accounting practices.

It was the lenders who increased their levels of AMC participation. In lieu of going to direct engagement.

A staff appraiser at a bank gets less than full fee, ehther 50% or X, because they get something in exchange - steady work, a salary, maybe paid data, support from a chief appraiser, 401k , paid vacation, etc. A fee appraiser getting a steep cut in fee gets NOTHING from an AMC - in fact, their work experience is often made worse via needless stipulations and other issues.

Doh, the lenders increased their level of AMC participation following DF because their "participation" was financed by the appraiser getting their fee slashed to compensate the AMC

Do you honestly believe the lenders would have increased their level of AMC participation to the extent they did if the lender had to PAY a Cost from their own pocket to the AMC for the service instead of getting the AMC subsidized as a free-of-cost service to the lender via the appraiser's fee split with the AMC?

 

[ZZGAMAZZ]

A staff appraiser at a bank gets less than full fee, ehther 50% or X, because they get something in exchange - steady work, a salary, maybe paid data, support from a chief appraiser, 401k , paid vacation, etc. A fee appraiser getting a steep cut in fee gets NOTHING from an AMC - in fact, their work experience is often made worse via needless stipulations and other issues.

Doh, the lenders increased their level of AMC participation following DF because their "participation" was financed by the appraiser getting their fee slashed to compensate the AMC

Do you honestly believe the lenders would have increased their level of AMC participation to the extent they did if the lender had to PAY a Cost from their own pocket to the AMC for the service instead of getting the AMC subsidized as a free-of-cost service to the lender via the appraiser's fee split with the AMC?

Probably very naïve but could appraisers bond together in support of any existing coalition trying to revoke DF????

 

[George Hatch]

A staff appraiser at a bank gets less than full fee, ehther 50% or X, because they get something in exchange - steady work, a salary, maybe paid data, support from a chief appraiser, 401k , paid vacation, etc. A fee appraiser getting a steep cut in fee gets NOTHING from an AMC - in fact, their work experience is often made worse via needless stipulations and other issues.

Doh, the lenders increased their level of AMC participation following DF because their "participation" was financed by the appraiser getting their fee slashed to compensate the AMC

Do you honestly believe the lenders would have increased their level of AMC participation to the extent they did if the lender had to PAY a Cost from their own pocket to the AMC for the service instead of getting the AMC subsidized as a free-of-cost service to the lender via the appraiser's fee split with the AMC?

I don't "not understand" or otherwise refute or ignore most of those points. I will say that I never got any of those extras when I was working for splits at the fee shops, though. My bosses were all operating on the profit motivation. Imperialist colonizer scum.

Regardless, none of that matters when compared to the point that the lenders are permitted to operate this way and have chosen to operate this way.

That is to say, it doesn't matter to anyone other than the fee appraisers.

 

[J Grant]

I don't "not understand" or otherwise refute or ignore most of those points. I will say that I never got any of those extras when I was working for splits at the fee shops, though. My bosses were all operating on the profit motivation. Imperialist colonizer scum.

Regardless, none of that matters when compared to the point that the lenders are permitted to operate this way and have chosen to operate this way.

That is to say, it doesn't matter to anyone other than the fee appraisers.

It should matter to the public, and it would if they were aware of the ramifications of how their appraiser was chosen in a reverse auction flea market bid, often with the least experience or competence showing up because of it.

We see it playing out with very few signing up for the profession on the residential lending side, despite offering PAREA and continuously lowering the education barriers. This might start to be of concern to lenders, and harms the public trust as the field atrophies and few talented and quality individuals want to join the field.

You got those extras as a bank staff appraiser, right? And when you worked for a split at fee shops, I bet you got something - I worked back in the day for a fee shop too and had access to guidance from the chief appraiser, other appraisers who worked there, access to MLS and computers at the time, and a front desk secretary to make appointments. You got steady work at least. And I bet the chief appraiser of the fee shop did not make his appraisers bid against each other for the lowest fee to get an order.
So what if the fee shop made a profit? You act like we are five years old and naive about the way normal businesses work.

We are aware that lenders are permitted to operate that way ( which still makes it exploitative and wrong ). A number of practices that are legal at some point are overturned. Regardless of whether this one does or not.

 

[George Hatch]

You're the one complaining about the markups. Those have always existed in the appraisal business in one form or another. The owners/managers get their cut. What might be different is the percentages.

 

[George Hatch]

Even if the AMC fees are somehow limited, they're still going to shop by fee on behalf of their clients.

I know, I know - you disagree. You apparently believe the AMCs have no incentive to compete with each other by offering wider coverage than their competition and by selling their ability to deliver at the lowest costs relative to their competition.

 

[Zoe]

The bundled fee was a a feature at the AMCs from the outset, same as it was when the lenders ran their own internal appraisal depts. I personally knew some of the principals back when I was teaching their in-house CE sessions. Starting in the mid-1990s.

When I worked on staff at the bank I never once got paid the entire "appraisal fee" that the borrower was charged. I might have gotten paid as much as 50% when the assignment involved an SFR. The rest got eaten up in the fixed/variable overhead and management via their accounting practices.

It was the lenders who increased their levels of AMC participation. In lieu of going to direct engagement.

yeah the bundled fee was there. But the original bill was fees would be separated on truth in lending disclosures and lobbyist got it changed for fees to be commingled. It changed the market structure for appraisers dealing with appraisal management companies to fastest and cheapest. The market structure has changed from more of a free market to where buyers have market power on price. In essence, it is an anti-trust law violation.

It is an oligopsony market structure.

If fees were separated on truth in lending disclosures the big players would dump appraisal management companies. AMCs would disappear overnight.