Terrel L. Shields
Elite Member
- Joined
- May 2, 2002
- Professional Status
- Certified General Appraiser
- State
- Arkansas
I ran into a banker I've known for 20 years, but who I have not seen for over a year. He was promoted to do credit analysis for the loan department and was shifted from his Loan Officer job at a smaller branch bank. This bank uses mostly evaluations. So eventually I got around to the subject and prices.
He said that evaluations "as far as I am concerned, are not worth the paper they are written on..." That was a quote I remember verbatim. But he went on to say, they met the compliance requirement of the bank holding company (powers that be) and they wanted faster reports and wanted to save the borrower money (more on that later).
He also said the loan officer inspects the property and photographs it, describes the surrounding properties, and includes an interior, front, rear, and street view. These evaluators charge $175 but are ordered thru an ordering system (AMC? Portal?) and the ultimate cost to the borrower is between $200 and $300. They offer the borrower the opportunity to pay extra for a bonafide appraisal and the end cost is $400 - $500 for an appraisal. (Most appraisers here are from $350-450, I don't see many charging more except VA.)
He said that he didn't agree with management but it was not his call. He felt the loan officers actually were left with less information upon which to make a lending decision because he didn't see the evaluation as aiding in the decision to lend. Credit history and credit score are more important along with income history.
He said his bosses were anxious about competition and in some parts of their bailiwick, particularly around Bentonville and Walmart people, they felt if the loan process was taking more than a week or so, these folks were likely to bail out and use Quicken on line or something. And he said the evaluation was usually a bit quicker "most of the time." His final remark was the more amusing. He said that at board meetings the head honchos always expressed a big concern about saving the borrower money when it came to title work or appraisals and always liked to emphasis that the evaluation was a good selling point with borrowers about how they kept fees low. Then he chuckled, "But when it comes to our origination fees, $2,000 is just fine..."
He said that evaluations "as far as I am concerned, are not worth the paper they are written on..." That was a quote I remember verbatim. But he went on to say, they met the compliance requirement of the bank holding company (powers that be) and they wanted faster reports and wanted to save the borrower money (more on that later).
He also said the loan officer inspects the property and photographs it, describes the surrounding properties, and includes an interior, front, rear, and street view. These evaluators charge $175 but are ordered thru an ordering system (AMC? Portal?) and the ultimate cost to the borrower is between $200 and $300. They offer the borrower the opportunity to pay extra for a bonafide appraisal and the end cost is $400 - $500 for an appraisal. (Most appraisers here are from $350-450, I don't see many charging more except VA.)
He said that he didn't agree with management but it was not his call. He felt the loan officers actually were left with less information upon which to make a lending decision because he didn't see the evaluation as aiding in the decision to lend. Credit history and credit score are more important along with income history.
He said his bosses were anxious about competition and in some parts of their bailiwick, particularly around Bentonville and Walmart people, they felt if the loan process was taking more than a week or so, these folks were likely to bail out and use Quicken on line or something. And he said the evaluation was usually a bit quicker "most of the time." His final remark was the more amusing. He said that at board meetings the head honchos always expressed a big concern about saving the borrower money when it came to title work or appraisals and always liked to emphasis that the evaluation was a good selling point with borrowers about how they kept fees low. Then he chuckled, "But when it comes to our origination fees, $2,000 is just fine..."
