AMC VS. Panel of Appraisers-please give feedback!

[rccmrccola]

Hey everyone! Need your input-I have an opportunity to sway (possibly) a local lender who funds their own loans towards developing their own panel of appraiser's VS using an AMC. I'm getting some face time with a branch manager who is interested in hearing the pro's and con's their own panel. They are really unhappy with the two AMC's they have tried. I am mainly interested in hearing the positive points for the lender's own panel, Im trying to convince them to create one VS using an AMC. This is where you come in-can everyone help me brainstorm? I would love to hear your input, and thanks again for your help!

 

[nstanbru]

To me, it's like selling anything, in this case it's a service. Point out the benefits to them without mentioning anything about how appraisers may benefit. For example, their current AMC is probably charging borrowers much more than the appraiser is receiving. If a typical base fee in your area is $350.00, for example, point out to them that it is most likely less than what their customers are currently paying. This would give them one competitve edge over their competition that has to collect more because they use an AMC. Another benefit to them would be their ability to use appraisers who have geographic competency. Others will probably come up with other positive reasons, but maybe this a start for you. Good luck.

 

[Pilgrum]

I would think quicker turn times would be a big benefit.
Also quicker times to have corrections made in that event.
The biggest benefit has to be in the improvement of quality they can expect by getting rid of the fastest/cheapest business model used by the AMCs.

 

[Meandering]

Point out that using an AMC does not release them of certain liabilities for Appraisals, Fees, Quality and disclosures that are mandated by the GSEs. It is less risky for them to control the process then to use an AMC, because when using the AMC they still have all their previous liabilities plus any new liabilities the AMCs create for them because it is the lender that is ultimately responsible. You might point out the several major lawsuites against AMCs that are out there.

I would also point out that as of October 19, 2010 HVCC will be sunset and have no force or effect according to the Frank/Dodd Financial Reform Law, HR 4173
http://www.gpo.gov/fdsys/pkg/BILLS-111hr4173ENR/pdf/BILLS-111hr4173ENR.pdf

And, I would point out that this same law calls for a total reworking of the GSEs, which if you watch the financial news, almost nightly now there are panel of experts discussing how to rework the GSEs. All things in lending will be changing within the comming year, therefore they will have the benefit of having greater oversight and control of their process by doing it themselves, which will make it easier to adapt as things change instead of having to honor contracts for services that then become obsolute under new laws.

I would also point out it would be better for them to reduce their liability risks to have control of their own appraiser selection and panel because the new Consumer Finance Protection Bureau will require new reports and more detailed demographics for their borrowers and venders and that the new bureau will be comprised of parts of existing government entites such as the OTS, the FDIC, and others.

It might be benefiticial for you to read through pages 661 through 664 of the bill at the above link as these changes will affect the bank, and they will be impressed you can see something from their point of view with some knowledge, and that you have researched some of their problems.

With any type of sales, you have to gain their trust by seeing and understanding their problems then show them how you can help. Oh and the law, by the way, has mandatory reporting of bad appraisals as a part of it, so you could point out that the bank can stop the garbage appraisals faster and with less expense on their own, than if they used an AMC.

 

[Michigan CG]

• No more out of town appraisers.
• The local guys who do not do AMC work will work for the local bank.
• The CG appraisers will sign on.
• The fast and cheap guys tend to provide what you pay for.
• Local appraisers have access to the local MLS.
• There will be no more guessing about who actually does the inspection and the report.
• Geographic competency.
• The bank customers aren't getting screwed.

 

[Meandering]

Good points.

A local or community lender servicing local people and hiring local contractors, I like it!

Put the local people back to work first.

A really great pitch there.

A community bank using appraisers from the community.

It is also better for the appraisers when they find them selves in church or in the grocery store with their boss or other bank employees, that kind of peer pressure alone would bring better reports. Even better is when you find out the appraiser's kids go to school with the branch manager's kids. Yup, keeps more people above board I'm sure.

 

[mopickled]

My local banks are using their own rotation and 1 is using AppraisalPort for a delivery system and have told me to charge extra for the "delivery fee" so they don't have to pay it. I don't care for Aport or their politics but the bank appears satisfied for now - borrowers shouldn't be too happy because I don't charge for "email delivery"......

This same bank tried an AMC and ran quickly from the $200 fee for rural work and sending chumps from 60 miles away to screw up the loans. Thankfully that was a quick disaster and over - for now....

Tell them AMC's are really nothing but parasites to the system and care nothing about quality - no matter what their lips are saying. Quick and cheap appraisers do not equal security for loans and the borrowers are catching on to the schemes. Too many have been burned by out of town appraisers doing sloppy work.

 

[AnonApprsr]

Tell them that they risk legal liability for crappy appraisals. At least if they hire the appraisers themselves, they will be able to personally vett them. Either way they have liablity, but at least they can make it a knowledgeable risk.

Also, consider offering to set up the panel for them. Offer your consulting services to populate their panel with quality appraisers. Even, if you want, offer to run the panel for a small fee. And for even more monies, you'll review their work!

YOU CAN BE AN AMC!

 

[Mile High Trout]

I posted thoughtful commentary on livevalmag regarding the benefits of in house vs AMC. They proceeded to censor and delete all my posts.

In house is preferable for so many reasons.

It stops preferential appraisal assignment. It assures borrowers are not paying more than for the services received. It allows more robust communication between the appraiser and underwriting. It keeps appraisers loyal and provides a reliable appraisal contractor servicer base, relevant to the panel size. Round robin panels work to assure appraisers more consistent work volume, which in turn is oftentimes answered by appraisers coming forth with fewer engagement conditions relating to fee. (Appraisers on round robin panels understand that when it comes to merits of individual orders, some are winners, some are time consuming loosers. But because the client plays fair with round robin distribution, the appraisers work harder on some, and less on others, all for the same fee.)

 

[Don Clark]

I posted thoughtful commentary on livevalmag regarding the benefits of in house vs AMC. They proceeded to censor and delete all my posts.

In house is preferable for so many reasons.

It stops preferential appraisal assignment. It assures borrowers are not paying more than for the services received. It allows more robust communication between the appraiser and underwriting. It keeps appraisers loyal and provides a reliable appraisal contractor servicer base, relevant to the panel size. Round robin panels work to assure appraisers more consistent work volume, which in turn is oftentimes answered by appraisers coming forth with fewer engagement conditions relating to fee. (Appraisers on round robin panels understand that when it comes to merits of individual orders, some are winners, some are time consuming loosers. But because the client plays fair with round robin distribution, the appraisers work harder on some, and less on others, all for the same fee.)

Good points. I would only add that having direct communication with appraisers for early resolution of any problems, corrections or other issues rather than having to go through a third party who prohibits direct communication with the lender is a benefit that is hard to beat.