Mike Kennedy
Elite Member
- Joined
- Sep 28, 2003
- Professional Status
- Certified Residential Appraiser
- State
- New York
"An appraisal veteran wrote to me saying, "This is absolutely true. There is an implied pressure on any provider (in any industry) whenever any that field is dominated by so few players. Witness the LSI's and CoreLogic's Valuation Services of the world choosing to maintain their pricing model to appraisers in the face of Dodd-Frank's bright line. They operate on the 'law of large numbers'. The amount of money they can make in the time it takes any regulatory agency to find them at fault will vastly exceed any potential fine they may incur.
One could argue that HVCC was created to protect appraisers from bank pressure when, in my opinion, it was a vehicle to enhance capture rate for lenders and seed control over the appraisal process - a goal of large lenders for decades."
"Secondly, as the required data mounts that appraisers are being asked to provide and the fees stay static, or in many cases actually decline, there's a 'self-preservation' that takes place. Appraisers tilt towards the most conservative approach so as to try and avoid a burdensome litany of revisions and explanations driven by some clumsy AVM data dump that an all too inexperienced (an underpaid) underwriter is using to determine whether an appraisal is 'accurate'. The bottom line is that borrowers suffer from a diminished quality appraisal, markets suffer from the best and the brightest being driven from their industry by higher workloads and ever-diminishing fees and the public faces an ever growing risk of history repeating itself."
So this provision of the Dodd-Frank Act where lenders are now required to pay "customary and reasonable" fees to appraisers is meant to address the complaint that the AMC's have been driving down fees at the expense of quality. And we may see investors focusing on, or advertising, their appraisal process.
For example, SunTrust told brokers, "SunTrust Pays Our Appraisers 100% of the Appraisal Fee. We Think You Get What You Pay For! This process should help the turn times, quality, and the all-around appraisal experience." The investor provided brokers simple instructions on how its credit card payment process works, saying that the LO or the borrower may pay for the appraisal.
For certain scenarios, ClearPoint Funding "encourages and accepts the use of streamlined appraisal alternatives as directed by the DU/DO Automated Underwriting System. A Property Inspection Waiver is now permitted when recommend by DU/DO for the following scenarios: 1 unit, purchase & R/T refinances, standard loan balances, all occupancies permitted (excluding investment in TX), but the property may not be an REO, recent foreclosure or new construction. (Refer to CPF Guidelines for complete details and restrictions.)
http://www.mortgagenewsdaily.com/channels/pipelinepress/05232011-appraisal-appraisers-dodd.aspx
One could argue that HVCC was created to protect appraisers from bank pressure when, in my opinion, it was a vehicle to enhance capture rate for lenders and seed control over the appraisal process - a goal of large lenders for decades."
"Secondly, as the required data mounts that appraisers are being asked to provide and the fees stay static, or in many cases actually decline, there's a 'self-preservation' that takes place. Appraisers tilt towards the most conservative approach so as to try and avoid a burdensome litany of revisions and explanations driven by some clumsy AVM data dump that an all too inexperienced (an underpaid) underwriter is using to determine whether an appraisal is 'accurate'. The bottom line is that borrowers suffer from a diminished quality appraisal, markets suffer from the best and the brightest being driven from their industry by higher workloads and ever-diminishing fees and the public faces an ever growing risk of history repeating itself."
So this provision of the Dodd-Frank Act where lenders are now required to pay "customary and reasonable" fees to appraisers is meant to address the complaint that the AMC's have been driving down fees at the expense of quality. And we may see investors focusing on, or advertising, their appraisal process.
For example, SunTrust told brokers, "SunTrust Pays Our Appraisers 100% of the Appraisal Fee. We Think You Get What You Pay For! This process should help the turn times, quality, and the all-around appraisal experience." The investor provided brokers simple instructions on how its credit card payment process works, saying that the LO or the borrower may pay for the appraisal.
For certain scenarios, ClearPoint Funding "encourages and accepts the use of streamlined appraisal alternatives as directed by the DU/DO Automated Underwriting System. A Property Inspection Waiver is now permitted when recommend by DU/DO for the following scenarios: 1 unit, purchase & R/T refinances, standard loan balances, all occupancies permitted (excluding investment in TX), but the property may not be an REO, recent foreclosure or new construction. (Refer to CPF Guidelines for complete details and restrictions.)
http://www.mortgagenewsdaily.com/channels/pipelinepress/05232011-appraisal-appraisers-dodd.aspx
