Customary and reasonable fees - 90 days

[Green Hornet]

And the new law doesn't prohibit appraisers from bidding against each other for work.
The AMC business model will change. They'll have to be happy with whatever the lenders will pay them and whatever they can nickle and dime appraisers for (software fee, portal fee, panel fee, etc.). All they'll do is lay off the worker bees, downsize office space and the top execs will still have their toys.

There will not be a shortage of appraisers who will bid close to, if not the same, fee that they're getting now. Large fee shops will be all over this. The indie appraiser will not only fail to gain any work from the big AMCs but will find that the full fee work form local lenders will be adjusted down because local lenders will have to compete and match the low fees on the GFEs of the big boys.

Unintended consequences: Appraisers who didn't need a federal law to set their fees will find that the new "customary and reasonable" will be set not by lenders but by hordes of ding-dongs trying to low bid for work.

IMO a year from now fees will level off to or near where they are now. The other provisions of HR 4173 will start to take shape and the "customary and reasonable" zombies will find out life isn't pretty on the other side.

That is an interesting thought, however...the law does not prevent appraisers from bidding down fees. It does prevent the AMC from paying below C&R...and...C&R cannot be based on what AMCs are paying...hmm

 

[Green Hornet]

Green Hornet, I can accept your sarcasm and degradating reaction: I believe the approach you are using is exactly the same approach that the current U.S. president takes whenever they feel that a good offense is to slander the other side. Congratulations! When will you be announcing that you are seeking public office in your state?

WT,

We are from the same state. I guess that I won't be able to count on your vote Then again, if you are who I think, you can't vote anyhow.

To retrace, I originally asked for clarification of a post you thought was clever. I was interested in what you were thinking.

That resulted in another post that I am sure you thought was clever, but it was condescending and did not explain anything. Given those two posts, it appeared that you were more interested in poking folks than actually contributing.

Since then, you seem to have decided to post some actual ideas. Glad I was able to help

 

[prasercat]

That is an interesting thought, however...the law does not prevent appraisers from bidding down fees. It does prevent the AMC from paying below C&R...and...C&R cannot be based on what AMCs are paying...hmm

This is an illogical line of thought, which just points out it can't happen that way for lender assignments. The would have to come in or be broadcast with the C&R fee assigned to it. There will be no opportunity or need to bid it down; however, the fee may need to be bid up for more than baseline complexity. Broadcasting orders will require the C&R fee as the default without an opportunity to bid lower. The market for fees is derived from non-lender competitive work, so there is a market dynamic already in place in this conception. These procedural issues will need to make sense in relation to the purpose of the law. Allowing a "bid down" for lender work would essentially nullify the effect of the law, since the lenders will seek the lowest price point, as you imply. The problem is we would be bidding down in the face of a monopoly of companies controlling 70-80% of the lender business. A true competitive market does not work in this type of environment, since the pricing power goes naturally (if there aren't constraints) to the monopoly, not the appraiser.

 

[KenAZ]

What a load of shtt.

No kidding. If this is "Complex" to them, why are they in the appraisal or mortgage business?

I like what Green Hornet said

That is an interesting thought, however...the law does not prevent appraisers from bidding down fees. It does prevent the AMC from paying below C&R...and...C&R cannot be based on what AMCs are paying...hmm

There is nothing that prevents us from accepting low fee appraisals, but there is a hefty fine for anyone that PAYS less that R&C.

I am very tempted to accept a bunch of low fee solicitations, and then email them to the state board that is licensing the AMC's. After a few appraisers do this, I can promise that these cut rate offers will stop. And since the AMC has no idea which appraisers are turning them in, they won't know who to blacklist.

Here is the scenerio . . .

They broadcast a lowball fee. It gets immediately accepeted. The problem is that there are only three types of appraisers that would accept that assignment.

1) Skippy
2) An appraiser that has every intention of reporting them
3) A skippy that might also turn them in when he gets booted from their "List"

 

[KenAZ]

Guys,

You miss the point.

No where, in any rule, or policy is an AMC allowed to negotiate your fees. By law they can only collect them and pass them on.

Fee spliting is illegal in accordance with RESPA.

AMCs must charge a C&R fee for their services, their C&R fee is NOT the difference between what the borrower paid and the AMC paid the appraiser.


On about January 21 2011 there will be a federal hotline to report these issues, oh and monitored enforcement. They will have to act.


.

Thanks for making things more clear.

 

[Gregory Beck]

$400.00 for an appraisal of an averge home sounds reasonable and customary to me.

 

[Non Sequitur]

$400.00 for an appraisal of an averge home sounds reasonable and customary to me.

Maybe. But now you guys/gals down in Florida may have to deal with a bunch snowbirds who couldn't get licensed before the new reciprocity provisions of HR 4173. And who's to say these snowbirds wouldn't love to run around part time for $200?

Nothing happens in a vacuum. C&R isn't written in stone and it will not be written in stone. At best AMC appraisers will see a short term gain before C&R is adjusted down by their own peers who before HR 4173 competed with price and will continue to compete with price. The law doesn't say appraisers can't negotiate or that lenders can't ask for bids.

 

[Non Sequitur]

I am very tempted to accept a bunch of low fee solicitations, and then email them to the state board that is licensing the AMC's.

It isn't going to happen this way. The broadcast will go out for a Fannie 1004 at 123 Apple St with no fee solicitation. It will be up to the appraiser to offer a TAT and fee. And we all know it won't be long before a fee shop (or hungry/part time indie appraiser) will bid consistently at a price that will land them all of the work they want.

HR 4173 does not prevent this.

What will happen is when the large lenders are consistently able to quote a lower appraisal fee on the GFE and HUD a new C&R will be established and the local lenders will be forced to adopt the fee in order to compete.

 

[eld2310]

HR 4173 does not prevent this.

What will happen is when the large lenders are consistently able to quote a lower appraisal fee on the GFE and HUD a new C&R will be established and the local lenders will be forced to adopt the fee in order to compete.

The law doesn't say that lenders and AMCs can't entertain bids that are less than the established R&C, but it doesn't say they can either. It's sort of a chicken/egg thing, and one for the lawyers to hash out. I've read enough legal rulings (and my mother's a contract attorney and agrees with me) to feel that if it isn't explicitly provided for, or even implicitly in this case, you can't do it. We shall certainly see, won't we?​

 

[Green Hornet]

It isn't going to happen this way. The broadcast will go out for a Fannie 1004 at 123 Apple St with no fee solicitation. It will be up to the appraiser to offer a TAT and fee. And we all know it won't be long before a fee shop (or hungry/part time indie appraiser) will bid consistently at a price that will land them all of the work they want.

HR 4173 does not prevent this.

What will happen is when the large lenders are consistently able to quote a lower appraisal fee on the GFE and HUD a new C&R will be established and the local lenders will be forced to adopt the fee in order to compete.

The way it is currently written, it does prevent the lender from paying below C&R. If they cannot pay below C&R, then how will the fees be driven down?

If the large lender is using an AMC, then those fees cannot be included in the C&S.

That is what is currently says. If it changes, then who knows.