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Blind Squirrel and Acorns
- Thread starter NLCApprMgr
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hastalavista
Elite Member
- Joined
- May 16, 2005
- Professional Status
- Certified General Appraiser
- State
- California
That's good enough for me.
Thanks!
This is always where the battle lies on your side of the fence.
Originators/sales (indeed, the entire mortgage lending group) only makes money if they make loans. Sales can argue that they are the only income-producing unit in the group.
Risk and QC is always low man/woman on the totem pole. The only time they get any respect is if the auditors are around (after that, they are shut back into the closet).
In one of your other threads, I gave 5-possible outcomes regarding the attempt to improve the quality of appraisal that your organization receives. The last outcome, in summary, said that you may find that your organization is not willing to pay more or wait longer for a better quality appraisal, and you may decide to just live with what you get.
I wouldn't wish that on you, but you might want to prepare for it (and, I'm usually one of the more optimistic posters on this forum!
).Good luck, and thanks for your efforts in trying to make a difference!
J Grant
Elite Member
- Joined
- Dec 9, 2003
- Professional Status
- Certified Residential Appraiser
- State
- Florida
At least you are trying to do a good job. As a new employee, you can't rock the boat and make immediate radical changes. To answer your questiosn, yes, send reports back for additional commentary or to address deficiencies.
I dontt know what fees are being paid by the AMC's this lender uses, or what is charged to borrower. It is not always a matter of increasing costs to borrower, rather, how much does each AMC skim off the fee. Maybe choose AMC's that are taking 20% of the fee as opposed to 40%, for example.
I think a first step is auditing the process by which these AMC;s assign work. Lenders as you know are going to be under more scrutiny for their due diligence in appraisr selection. They can't just throw up thei rhands and say they entrusted the AMC to do it.
First of all, ask, specifically, of each AMC, if they are assigning work to Forsythe and Metro West appraisal firms. These are national appraisal mill firms (check them out yourself), that hire fee appraisers as "staff", with extreme low fee splits. They take on bulk AMC work at low fees and then pay an even lower split to their "Staff" appraisers, who make around $125-$140 a report. In order to accommodate such a low basement fee, these appraisers produce bare bones generic research and canned commentary reports. So that is the first proactive step you can take. You might want to prohibit outsourcing appraisals to threes firms, if that is what is going on.
The other thing you can initiate is a yearly audit of all AMC's now doing this ordering. They have to submit a breakdown each year to you of which appraisers are getting the assignments in each region, and how much experience they have, and then compare that to the names on their panel and how much experience the appraisers have who are not getting work.
It also comes down of course as well to individual appraisers. Flag the names of those who have a pattern of submitting low quality /questionable reports, your company call tell the AMC they prefer not to receive reports from that appraiser.
( as an appraiser, though I dislike generic commentary, what is of more concern is if these appraisers are fudging market conditions to simplify analysis and thus saving time in reporting ....are these reports showing very market stable and supply and demand in balance, for example. (when they might in reality be declining or over supply or rising etc)?
If budge allows, forward a few of the most questionable reports for full field reviews (
I dontt know what fees are being paid by the AMC's this lender uses, or what is charged to borrower. It is not always a matter of increasing costs to borrower, rather, how much does each AMC skim off the fee. Maybe choose AMC's that are taking 20% of the fee as opposed to 40%, for example.
I think a first step is auditing the process by which these AMC;s assign work. Lenders as you know are going to be under more scrutiny for their due diligence in appraisr selection. They can't just throw up thei rhands and say they entrusted the AMC to do it.
First of all, ask, specifically, of each AMC, if they are assigning work to Forsythe and Metro West appraisal firms. These are national appraisal mill firms (check them out yourself), that hire fee appraisers as "staff", with extreme low fee splits. They take on bulk AMC work at low fees and then pay an even lower split to their "Staff" appraisers, who make around $125-$140 a report. In order to accommodate such a low basement fee, these appraisers produce bare bones generic research and canned commentary reports. So that is the first proactive step you can take. You might want to prohibit outsourcing appraisals to threes firms, if that is what is going on.
The other thing you can initiate is a yearly audit of all AMC's now doing this ordering. They have to submit a breakdown each year to you of which appraisers are getting the assignments in each region, and how much experience they have, and then compare that to the names on their panel and how much experience the appraisers have who are not getting work.
It also comes down of course as well to individual appraisers. Flag the names of those who have a pattern of submitting low quality /questionable reports, your company call tell the AMC they prefer not to receive reports from that appraiser.
( as an appraiser, though I dislike generic commentary, what is of more concern is if these appraisers are fudging market conditions to simplify analysis and thus saving time in reporting ....are these reports showing very market stable and supply and demand in balance, for example. (when they might in reality be declining or over supply or rising etc)?
If budge allows, forward a few of the most questionable reports for full field reviews (
Michigan CG
Elite Member
- Joined
- Nov 1, 2006
- Professional Status
- Certified General Appraiser
- State
- Michigan
Here is where you start. What is the fee you are charging to the borrower for the appraisal and how much is the AMC paying the appraiser? If you are charging the customer $500 for the appraisal and the AMC is paying $250 then you are going to get bare minimum.
I don't see how an AMC could need more than $100 of an appraisal fee to do their job especially if they are not really doing any more than a check box review.
If you are charging $500 and the appraiser is getting $400 then you should expect a "good" appraisal. If the appraiser is getting $250 well then, you just lost about 50% of the potential appraisers.
I would sit down with the AMC and see what they are actually paying appraisers out of the total fee.
Elliott
Elite Member
- Joined
- Apr 23, 2002
- Professional Status
- Certified General Appraiser
- State
- Oregon
NLC,
I get the impression you landed in a new job and trying to find your feet. Your seeing lots of marginal to poor reports. As a point of reference, your use of the word 'review' is loose, surely not Standard 3, and I understand your review is limited in scope and your worried this might all land back on your door step.
This is also my impression, that your in a position where you use 8 of the largest AMCs, it doesn't surprise that your getting questionable quality appraisals. How your going to improve the quality of reports is going to be difficult. Like I've said before, your lender is locked into a pipeline that is getting reports from AMCs that understand how to maximize their profit from your lender, but not how to get the best quality report.
Here's how the business works, lots of appraisers get in this business for a wide variety of reasons. There are two business models that work. The appraiser that makes business decisions to get lots of work for not a lot of money, and appraisers who strive to do a conscientious, responsible job, expect to be appropriately compensated, and do there best so the lender isn't left with lots of problems 2 to 10 years from now.
I don't think there is an easy way your going to make the turds that are coming across your desk to improve. Rather than chide us, you might want to talk to your AMC reps and tell them your getting reports that smell and if they don't get their act together quick, your going to recommend one of the other 7 AMCs you use. I hope you don't find all of these bad reports falling down on you, but bad reports and bad reviews do have a strong tendency to fall back on those that wrote them or approved them. This is a mean business when people lose money.
I get the impression you landed in a new job and trying to find your feet. Your seeing lots of marginal to poor reports. As a point of reference, your use of the word 'review' is loose, surely not Standard 3, and I understand your review is limited in scope and your worried this might all land back on your door step.
This is also my impression, that your in a position where you use 8 of the largest AMCs, it doesn't surprise that your getting questionable quality appraisals. How your going to improve the quality of reports is going to be difficult. Like I've said before, your lender is locked into a pipeline that is getting reports from AMCs that understand how to maximize their profit from your lender, but not how to get the best quality report.
Here's how the business works, lots of appraisers get in this business for a wide variety of reasons. There are two business models that work. The appraiser that makes business decisions to get lots of work for not a lot of money, and appraisers who strive to do a conscientious, responsible job, expect to be appropriately compensated, and do there best so the lender isn't left with lots of problems 2 to 10 years from now.
I don't think there is an easy way your going to make the turds that are coming across your desk to improve. Rather than chide us, you might want to talk to your AMC reps and tell them your getting reports that smell and if they don't get their act together quick, your going to recommend one of the other 7 AMCs you use. I hope you don't find all of these bad reports falling down on you, but bad reports and bad reviews do have a strong tendency to fall back on those that wrote them or approved them. This is a mean business when people lose money.
J Grant
Elite Member
- Joined
- Dec 9, 2003
- Professional Status
- Certified Residential Appraiser
- State
- Florida
One change you can effect immediately, that will cost no money, is to ask each and every AMC if they broadcast orders. If any do, report back to your superiors and explain to them why that is a terrible idea and to then inform these AMC;s to put an immediate stop to it.
Most decent appraisers either wont' accept broadcast orders, or try a few times and give up, because they tend to be snagged by auto bot software or the appraisal mill firms.
Asking each of the AMC's if they assign to Forsythe, Metro West or other appraisal chain mill firms also costs nothing and will give you valuable information.
Most decent appraisers either wont' accept broadcast orders, or try a few times and give up, because they tend to be snagged by auto bot software or the appraisal mill firms.
Asking each of the AMC's if they assign to Forsythe, Metro West or other appraisal chain mill firms also costs nothing and will give you valuable information.
Michigan CG
Elite Member
- Joined
- Nov 1, 2006
- Professional Status
- Certified General Appraiser
- State
- Michigan
Excellent points, especially the broadcast order system. If one of your AMCs does the broadcast order system get rid of them immediately.
djd09
Elite Member
- Joined
- May 20, 2009
- Professional Status
- Licensed Appraiser
- State
- Ohio
i did not want to say this but. this guy is a shill. crying about the appraisals. boo hoo. so is joan. there both jokes and not even appraisers. if I was loaning $100,000 ++++ and thought the appraisal may be lacking, I would pull the money out and order a second appraisal you cheap @@@@.
NEINAPPR
Junior Member
- Joined
- Sep 19, 2006
- Professional Status
- Certified Residential Appraiser
- State
- Indiana
As J Grant states you need to ask the AMC's some questions. Ask exactly how they assign the orders, ask how long the appraisers are given to complete the assignment and ask them precisely how much they are paying the appraisers. Do not for one second think that they won't lie to you, I have been lied to so many times by these AMC reps that I don't believe much of anything from them anymore. I am sure they will tell you that the appraiser sets their fee and they are given as long as needed to accurately complete the assignment...... You may actually have to pick up the phone and call a couple of the appraisers and ask them how much they were paid and how long they were given to complete the assignment. You are the client, tell them you are doing a survey or something regarding the AMC's you use. I bet a lot of the appraisers will be happy to give you an earful of stories. It may be very telling to find out which AMC's are keeping 1/2 the fee or more that they are paid by your company. You may be shocked by what you find out.
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