Appraising is like a minimum wage job.

[George Hatch]

Lenders by law are supposed to pa C and R for GSE-regulated work, not fee bid , on an app or otherwise, No, the lenders would not be interested in it, because why does a lender want to waste time all day dicking around with $25 differences wrt appraisal fees on an app? The banks and lenders make money off loans, not by for some setting up bids to lower an appraiser fee.

If they did that, why not do it for title work or insurance? Like why would a lender want to be on an app lll day dicking around with vendor fees they won't profit from?-

Even an AMC might not want to use such an app and there comes a point where if it drove fees too low for AMC work, virtually no appraiser would want to do the work.

All it takes is just a *little* imagination to envision any of several different ways this could conceivably play out.

Here's one: Automate the bidding process for the base fee for the entire region; not individual assignments. No human monitoring necessary. Update their solicitation page every Thursday AM and let the app run on it's own. See what the appraisers do overnight. All bids are final as of noon on Friday. One clerk could update the solicitation bid page for every region in the state within a couple hours.

140 appraisers in the region face off for 80 assignments from that one lender this week Nobody gets more than 5 assignments. 80 assignments / 5ea = 16. 16 winners and 140 losers for that week. Water seeks its own level, so a "no bidders" situation literally can't happen because its the appraisers choosing their numbers, not the AMC.

So that's it for this week. But hey, there's always next week.

 

[George Hatch]

l'm trying to figure out how the federal govt would go about prohibiting appraisers from compete-by-fee with each other in the market. Or prohibit the lenders from allowing appraisers to compete on that basis. The prospect strikes me as being anti-competitive in nature.

 

[Terrel L. Shields]

so whether the borrower pays $200 or $400, the appraisal costs the lender nothing either way?

Actually, if the Good Faith Estimate is $9.500 with an allowance of $400 for the appraisal by Lender ONE
And the GFE is $10,300 with an allowance of $1,200 from Lender TWO,
Which one will the borrower pick if both offer the same interest rates? Well, then you realize why the lender is not unconcerned with the price and by fixing a price from the AMC that is competitive, they lower their total GFE and it entices more people to take their loan. It is also why a small community bank can close for $4,000 and get business despite a higher interest rate. I remember when application fees were $100, title search was $250, and credit check was about $50. Many loans closed at less than $2,000. That buys a lot of interest on a smaller loan.

 

[Elliott]

I must have been sick the day when troll school was taught.

 

[Non Sequitur]

The argument that "lenders don't pay for the appraisal so the fee shouldn't matter" is beyond silly. Here's a fact: Lenders, especially small lenders/community banks/credit unions, are highly sensitive to fees that most collect upfront. So, if a LO starts losing business because they have to collect higher appraisal fees than competitors, that will get corrected in record time. I've sat in that seat, all vendor fees are monitored by the credit department for competitiveness.

 

[J Grant]

All it takes is just a *little* imagination to envision any of several different ways this could conceivably play out.

Here's one: Automate the bidding process for the base fee for the entire region; not individual assignments. No human monitoring necessary. Update their solicitation page every Thursday AM and let the app run on it's own. See what the appraisers do overnight. All bids are final as of noon on Friday. One clerk could update the solicitation bid page for every region in the state within a couple hours.

140 appraisers in the region face off for 80 assignments from that one lender this week Nobody gets more than 5 assignments. 80 assignments / 5ea = 16. 16 winners and 140 losers for that week. Water seeks its own level, so a "no bidders" situation literally can't happen because its the appraisers choosing their numbers, not the AMC.

So that's it for this week. But hey, there's always next week.

If there were 16 winners that week and 140 losers, it would not be long before the 140 quit rather than remain to make no money or to have to bid so low that it does not pay to do the assignment.

You use the word lenders sometimes and AMC;s other times. Lenders would not like this because they need to quote borrowers the same rate, and the lender does not want to be wasting time every week changing the appraisal fee they charge borrowers. In addition, it does nothing to control costs since the borrower pays for the appraisal anyway. If the appraisal rate is $350 or the appraisal rate is $300, the borrower pays either way; the lender has not saved on cost with the $300 to borrower charge.

As far as AMC;s, the already have similar systems in place that compare fees so it would not change things for them.

 

[RCA]

The argument that "lenders don't pay for the appraisal so the fee shouldn't matter" is beyond silly. Here's a fact: Lenders, especially small lenders/community banks/credit unions, are highly sensitive to fees that most collect upfront. So, if a LO starts losing business because they have to collect higher appraisal fees than competitors, that will get corrected in record time. I've sat in that seat, all vendor fees are monitored by the credit department for competitiveness.

Appraisers are often referred to as "bottom feeders." But that term really refers to something else. In the sense that appraisers have to "take it or leave it" - they aren't bottom feeders anymore than anyone else. If you tell a software engineer he has to take it or leave, he can probably easily find a higher paying job with better conditions elsewhere. And even if he can't, if he leaves, you are stuck with finding a replacement that will need a 2 to 3 month break-in before becoming productive, and that's going to be $10K/month down the drain, mostly. But if he works for Google and making $500K per year, --- he more or less has to take it or leave --- because the employer can probably find a better replacement at that salary --- and at that salary the expectation is that the employee is going to bend over backwards to keep the employer happy.

Do you get it?

Traditional Appraisers take low fees, even if they are good appraisers, because their clients view their product as only a rubber stamp that simply has to be "good enough" to pass muster. The USPAP regulations and guidelines don't help them here. USPAP doesn't specify actual hard real requirements or protocols in doing their job. Appraisers get by, if they get by - because the whole infrastructure of appraisal is built on mud and sand. It's a wishy washy system allowing the clients to go for low fees.

In the end, the taxpayer pays for the sloppiness, as well as a number of other parties, even if indirectly, including homeowners, home supply companies, - society as a whole.

To be clear, the real enemy is and has always been the appraisal infrastructure - the appraisal leaders. TAF, the AI and other organization are not run by people really interested in appraisal. They are akin to fat politicians - riding on a kind of synthetic wave of bureaucratic idiocy. They pat each other on the back, and just keep partying on their balloon high up in the stratosphere - muttering nonsense to the crowds below.

 

[RCA]

Appraisers are often referred to as "bottom feeders." But that term really refers to something else. In the sense that appraisers have to "take it or leave it" - they aren't bottom feeders anymore than anyone else. If you tell a software engineer he has to take it or leave, he can probably easily find a higher paying job with better conditions elsewhere. And even if he can't, if he leaves, you are stuck with finding a replacement that will need a 2 to 3 month break-in before becoming productive, and that's going to be $10K/month down the drain, mostly. But if he works for Google and making $500K per year, --- he more or less has to take it or leave --- because the employer can probably find a better replacement at that salary --- and at that salary the expectation is that the employee is going to bend over backwards to keep the employer happy.

Do you get it?

Traditional Appraisers take low fees, even if they are good appraisers, because their clients view their product as only a rubber stamp that simply has to be "good enough" to pass muster. The USPAP regulations and guidelines don't help them here. USPAP doesn't specify actual hard real requirements or protocols in doing their job. Appraisers get by, if they get by - because the whole infrastructure of appraisal is built on mud and sand. It's a wishy washy system allowing the clients to go for low fees.

In the end, the taxpayer pays for the sloppiness, as well as a number of other parties, even if indirectly, including homeowners, home supply companies, - society as a whole.

To be clear, the real enemy is and has always been the appraisal infrastructure - the appraisal leaders. TAF, the AI and other organization are not run by people really interested in appraisal. They are akin to fat politicians - riding on a kind of synthetic wave of bureaucratic idiocy. They pat each other on the back, and just keep partying on their balloon high up in the stratosphere - muttering nonsense to the crowds below.

Or maybe, for all I know, they are earnestly struggling to keep a sinking ship afloat a while longer. --- It can still float for now ... but for how much longer?

 

[J Grant]

The only reason it wouldn't come to pass is if the technogeeks don't get around to it. If someone like me can imagine how such an app might appeal to the lenders then that's an extremely low bar for the CRN types to clear.

And BTW, did I mention that nobody cares what happens to appraisers or if they're satisfied with their fees? Because if I didn't then I meant to.

You've posted hundreds of times stating that nobody cares what happens to appraisers or if they are satisfied with their fees. So you do not have to post it repeatedly, but you love deflating appraisr by post it, so carr on. One would expect other appraisers to care, and many do, but you don't., and in fact, seem vested in a system like this app to reduce them further.

Idk why, but to teach their own

 

[J Grant]

Or maybe, for all I know, they are earnestly struggling to keep a sinking ship afloat a while longer. --- It can still float for now ... but for how much longer?

GH seems to believe that appraisers, for some reason, would remain in a field where, hourly or weekly, their C and R fees go lower in an online bid world to the extent that the field is untenable. Whatever.

Meanwhile, volume lenders and wholesalers have a handle on their appraisal costs and use C and R based on a yearly survey with no problem - the borrower covers the appraisal fee so the amount of the fee differential does not translate to cost savings for the lender, since GH's argument for this is lenders want to control their costs. . Lenders their money from generation land, not by dicking around increments in appraisal fees the borrower will cover.

AMCs already have an arsenal of tech and staff to ensure they drive down fees to ensure they get a higher split -if GH wants to sell this app idea to them, maybe there will be a taker, idk.