AMC Allocation of Commercial Jobs?

[J Grant]

AMC's also have considerable licensing, insurance, legal, HR, and IT expenses.

I have no objection to the AMC's making $. I object to the appraiser paying for it from a fee split.

 

[J Grant]

Me neither. But I can read the summary and see the parallels with what AMCs do. How about you? Can you see the parallels?

Here's another parallel business type. Who do you think should we blame for their existence and their market share? Should we blame them for forcing their clients to do business with them?
View attachment 106193

These businesses are a weak parallel.

If a hospital or a group of physicians, or a legal firm, wants to pay for a management service, so what? The legal or medical customers pay these management firms a fee or annual retainer, or some other financial charge, correct?

I fail to see a direct parallel to AMCs' offering free-of-cost service to lenders. said free of cost service subdivionzed by a fee split from an appraiser.

 

[J Grant]

AI- 65% of Americans own homes.

AI-A precise percentage of all Americans owning commercial property is elusive, but data suggests a small fraction of individuals directly own significant portions, with corporations (including REITs) holding substantial commercial assets, while most Americans own little or none directly, though many invest indirectly via funds or retirement accounts; estimates place corporate ownership of residential land around 9%, but commercial is more complex, with large institutional holdings.

To wrap up, the wealth, savings, and equity of many Americans is wrapped up in home ownership. The prices and thus the amount of the mortgage loans have almost doubled over the past five years, in the hundreds of thousands of $ for a starter house.

With so much riding on it, the all-important selection of which appraiser is chosen for a residential mortgage loan appraisal assignment when an AMC is involved comes down to reverse bid flea market style bidding or fee comparison ( the split ) an appraiser is willing to take, regardless of how many more experienced and competent appraisers get passed over for an order.

Considering how much $ is at stake for buyers and borrowers, a college or an equivalent higher entry bar is needed MORE on the residential license side than on the commercial side. The commercial side can be very demanding in math as well as analyzing a diversity of property types; however, there is a lot more $ at stake economically, combined with the health of local markets riding on res license side,. A competent residential appraiser needs to be able to process conflicting information and analyze factors that are not always solvable by applying a formula. And it goes without saying that the current fee split payment model, which incentivizes an AMC to choose the least experienced or competent, much of the time because they will accept the gutter fees, is inexcusable.

 

[George Hatch]

Govt: You lenders must disclose the mgt fee separately from the appraiser's fee
Lender: No problem. Makes no difference to us

​

Next day:

AMCs fee: $300​

Appraiser's fee: $250​

 

[J Grant]

Govt: You lenders must disclose the mgt fee separately from the appraiser's fee
Lender: No problem. Makes no difference to us

​

Next day:

AMCs fee: $300​

Appraiser's fee: $250​

I never said that disclosure such as above is the answer to the problem. That would be Zoe.
The answer is that NO split of the appraisal fee from the borrower goes to the AMC -

Thus the above would be this:
Appraiser fee $550
Plus any fee that an AMC separately charges a borrower for the AMC service.

A lender can pass the AMC cost on to the borrower or a lender can opt to pay the AMC from their own funds. The cost of an AMC service, which benefits the lender, should not be borne by the appraiser from a fee split.

I bet if the lenders had to pay the AMC cost from their own funds, they would dump the AMC's overnight and revert to using their own fee panel.

 

[George Hatch]

Thus the above would be this:
Appraiser fee $550
Plus any fee that an AMC separately charges a borrower for the AMC service.

That's what I said

Appraiser fee $250​

AMC Fee $300​

Or, if you think C&R for AMCs is $45, then

Appraiser's fee $250​

AMCs fee $45​

 

[J Grant]

That's what I said

Appraiser fee $250​

AMC Fee $300​

Or, if you think C&R for AMCs is $45, then

Appraiser's fee $250​

AMCs fee $45​

??
I SAID
Appraiser fee $550

LENDER FEE TO BORROWER FOR AMC SERVICE $45 ( or whatever $ amount they agree on, assuming the lender passes the AMC charge on to the borrower.)

OR it can be
Appraiser fee $550
( no fee to the borrower for the AMC service if the lender chooses to cover it. In which case, the lender would pay at most $45 -

The idea is not have any split of the borrower-paid appraisal fee go to the AMC.

 

[George Hatch]

You keep assuming the AMCs will stop shopping by fee or that the lenders will stop encouraging or enabling or demanding the AMCs to shop for the lowest fee splits. Assuming that the only reason the AMCs shop by fee is because of the bundled model. Assuming that separating the fee or forcing the lender to pay the AMCs end will somehow result in the AMCs to stop shopping by fee. I think that assumption is subject to challenge, if not wholly unsupported.

There's nothing stopping the AMC-user lenders from paying the appraiser $250, if/when there are appraisers willing to work for that fee. The supply of appraiser hours is the supply; the demand for those hours is the demand. None of that dynamic is changing.

 

[George Hatch]

Let's exercise your empathy superpower with a role play. Pretend that the lenders are prohibited from passing the AMCs end on to the borrower so that "appraisal fee" is strictly limited to the fee paid to the appraiser and excludes the reviewer's fee or the mgt fee or anything not being paid solely to the appraiser.

Your AMC (Fly-By-Night Appraisal Mgt Co) is competing for the same lender accounts as 3 other AMCs. What do you think the various aspects are by which these AMCs will compete with each other?

• Geographic coverage
• Turn times
• Quality or stip/rejection rate
• Amount of the appraiser's fee being paid

 

[J Grant]

You keep assuming the AMCs will stop shopping by fee or that the lenders will stop encouraging or enabling or demanding the AMCs to shop for the lowest fee splits. Assuming that the only reason the AMCs shop by fee is because of the bundled model. Assuming that separating the fee or forcing the lender to pay the AMCs end will somehow result in the AMCs to stop shopping by fee. I think that assumption is subject to challenge, if not wholly unsupported.

There's nothing stopping the AMC-user lenders from paying the appraiser $250, if/when there are appraisers willing to work for that fee. The supply of appraiser hours is the supply; the demand for those hours is the demand. None of that dynamic is changing.

Do you have a reading comprehension problem?
The idea is to no longer allow splitting the appraisal fee with AMCs. The AMC';s can not take a dime from an appraisal fee. The AMC must get paid separately for the AMC managing service from the lender.

I F THERE ARE NO MORE FEE SPLITS ALLOWED, THEN HOW CAN THE AMC's SHOP FOR THE LOWEST FEE SPLITS? (your first paragraph)