Fighting AMCs alone or in groups?

[Randolph Kinney]

When Big Banks control more than half of the work, there is no way to compete. As I said, your local lender is not competing with the nationals. They are in different games. Borrowers who are shopping for the dead lowest rate are not borrowing from your local lenders. Their borrowers value the ability to walk in and speak to the people who are handeling thier loan. They pay the additional fees/interest because they want that "community" servicer who will hold some of the mortgages and will fund some of the products the big guys won't touch. Your clients are trading on quality customer service which comes at a premium over, big, fast, cheap.

You are in a different game. The issue is to remove, big, fast, cheap from the lending world thereby trickling down to the appraisal world.





Which is fine until the nationals are not receiving the services they require. When that happens it will be an all new game again, reshuffling the deck and the players.

Adam Smith and the invisible hand

" ...every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good."

You don't believe in market forces where individuals acting independently of each other can affect the society as a whole and whole industries? That's your AMC model, excess supply of appraisers willing to work cheap, independent of each other while other appraisers are not willing to work that cheap.

Wait and see what happens. It may be by force of government that put people into the appraisal business that will take those people out of business. Or it may be the invisible hand of appraisers acting independently of each other to maximize their own wellbeing and personal gain.

 

[Meandering]

Adam Smith wrote, thought and spoke from the perspective of community among the masses. Not from the current state of society. How many appraisers came to fight AMCs before AMCs took more than half their income?

The problem is that we, the head count, look to each other for the same spirit that stood up to the English during the Revolution, and don't see our brethren standing beside us.

We puff our chests over a proud history of standing up for what we believe, the Civil War gave us such heroes on both sides. We are Americans, a force to be reckoned with, our spirit will not die.

But sadly, that might have been our history, but after WWII, we, as a people, have not stood together for anything else, and might not, ever again. Brave, strong, and sometimes stoned, young people stood up in the 60s and 70s against Vietnam and the political animals. But they did not stand together, and we as a people, did not stand with them. When survival was more closely tied to community, there was greater availability for congregation and consensus of actions toward the benefit of our shared interests.

But Industrialization fractured the family units, The Information age has further fractured us into individuals fully capable of not just survival, but success without community. If it affects me, I might care, If it does not affect me right now, I’m too busy with my own problems.

As a people – a society, we have become feral cats not wanting regulations, less than not wanting to be bothered with others and their problems.

We are focused on “us” as individuals and can’t get back to the community level with any success, save, all but the smallest of groups, without some catastrophic event that would affect the largest majority of us with such deep ramifications that we could not ignore as individuals, such as a failure of all crops and international transportation issues causing wide ranging starvation.

Even $4.00 a gallon gas did not unite us as a people, many with HUMVEE vehicles were interviewed on TV stating they could afford the gas so # U $%@ you can’t afford their gas sucking vehicles.

Americans are deeply generous, but only to foreigners that we don’t want here. We have jumped to help every country in the world, except our own. Because as an American, you have a duty to survive and thrive. We hate people that think they have a right to live, and our tax dollars should buy their food and pay their medical bills, when they are fellow Americans.

The people that died on 9/11/01 outraged the country, because they were survivors, thriving, taxpayers with jobs.

That many people, ten thousand times over, are homeless because of subprime mortgages and unemployment. Do we rally as a nation to their aid? Do we build homeless shelters and shut down the greedy that were responsible for profiteering the very shelter that keeps men, women and children alive? Nope, not at all, if they were victimized, then American society has deemed them as not worthy, pushed under the rug until they can yet again become taxpayers with jobs, thriving in our society.
This is what we must over come to be heard. And we will not be heard from a position of underemployment, enslavement or hopelessness, least we move to a foreign country and scream from there.

 

[Vetteman]

Remove enough and we will fall victim to supply/demand ratios causing a shift in the market from humans to computers.

I remember being told in a CE class over ten years ago that if we appraisers were not careful, we would be replaced by AVMs. Many companies have gone out of business because they don't provide their customers with what they want. Why should appraisers think they are any different? Apparently the national lenders just want to go the easy route...therefore they outsource to AMCs. Without enough appraiser slaves, the AMCs will cry and complain, then simply offer up AVMs or whatever. If our bail-out government doesn't think an accurate appraisal by an ethical, conscientious and experienced appraiser is really all that necessary...game over. I see it coming, because the times they are a-changin.

 

[Squareitup]

I remember being told in a CE class over ten years ago that if we appraisers were not careful, we would be replaced by AVMs. Many companies have gone out of business because they don't provide their customers with what they want. Why should appraisers think they are any different? Apparently the national lenders just want to go the easy route...therefore they outsource to AMCs. Without enough appraiser slaves, the AMCs will cry and complain, then simply offer up AVMs or whatever. If our bail-out government doesn't think an accurate appraisal by an ethical, conscientious and experienced appraiser is really all that necessary...game over. I see it coming, because the times they are a-changin.

Minor comment: over ten years ago then, this real estate and economic crash hadn't occurred yet. AVMs and other methods of irresponsible shortcuts have been reconsidered along with many other things, post-epiphany as damages are itemized and causes revealed. There are so many points at which inaccuracies and systemic corruption of information can enter the appraisal process, especially with an automated or semi-automated model.

I'd like to see the identity of "the customer" shift from being the secretive, manipulative AMC/lender bank to become the open market home buyers, home sellers and Realtors who would demand objective, complete and current data provided by professional independent appraisers. Fully informing the home owner and home buyer masses to the AMC and corrupt appraisal report issues still holds some potential to allow appraisers more clout in facing down the AMC phenomenon. How it will happen could be a matter of economic necessity?

 

[sunsetvalley]

Not all homeowners who refinance want the truth. Homeowners are very emotional about their homes...they don't understand why the market doesn't recognize the custom mural painting in their bathroom and give it "significant" value. Of all the parties that can violate "HVCC", the biggest problem we have is the homeowner, second is the realtor.

Honestly, HVCC guidelines, with exception of WHO can order the appraisal, have always been around. It's never been ok to pressure the appraiser to make a value. The only issue has been that MANY appraisers forgot that they are not supposed to be biased in their valuations and allow themselves to be pressured and the governmental agencies have not enforced their rules.

The pressure is still there, it's just focused on the AMC or Appraisal Ordering Department. The problem is that the majority of the AMCs are run by unscrupulous people and they put the pressure on the appraiser.

The game hasn't changed...it just changed players. If they were really interested in changing, they'd go to a VA Panel Rotation ran by appraisers.

 

[Squareitup]

That's ignoring, not competing.

Not getting involved with them DOES apply competitive leveredge.

AMCs are a ripple in the pond; snake pit economics while the nation circles the drain. It's a phase that can't last. I don't know what the solution is to increase the independence and standards of the appraisal profession if they can't cooperate enough to do it themselves, but it wouldn't involve subsurvience to the unsustainable banking practices that have taken the country to this inevitable bankruptcy.

 

[Captain Common Sense]

Adam Smith wrote, thought and spoke from the perspective of community among the masses. Not from the current state of society. How many appraisers came to fight AMCs before AMCs took more than half their income?

The problem is that we, the head count, look to each other for the same spirit that stood up to the English during the Revolution, and don't see our brethren standing beside us.

We puff our chests over a proud history of standing up for what we believe, the Civil War gave us such heroes on both sides. We are Americans, a force to be reckoned with, our spirit will not die.

But sadly, that might have been our history, but after WWII, we, as a people, have not stood together for anything else, and might not, ever again. Brave, strong, and sometimes stoned, young people stood up in the 60s and 70s against Vietnam and the political animals. But they did not stand together, and we as a people, did not stand with them. When survival was more closely tied to community, there was greater availability for congregation and consensus of actions toward the benefit of our shared interests.

But Industrialization fractured the family units, The Information age has further fractured us into individuals fully capable of not just survival, but success without community. If it affects me, I might care, If it does not affect me right now, I’m too busy with my own problems.

As a people – a society, we have become feral cats not wanting regulations, less than not wanting to be bothered with others and their problems.

We are focused on “us” as individuals and can’t get back to the community level with any success, save, all but the smallest of groups, without some catastrophic event that would affect the largest majority of us with such deep ramifications that we could not ignore as individuals, such as a failure of all crops and international transportation issues causing wide ranging starvation.

Even $4.00 a gallon gas did not unite us as a people, many with HUMVEE vehicles were interviewed on TV stating they could afford the gas so # U $%@ you can’t afford their gas sucking vehicles.

Americans are deeply generous, but only to foreigners that we don’t want here. We have jumped to help every country in the world, except our own. Because as an American, you have a duty to survive and thrive. We hate people that think they have a right to live, and our tax dollars should buy their food and pay their medical bills, when they are fellow Americans.

The people that died on 9/11/01 outraged the country, because they were survivors, thriving, taxpayers with jobs.

That many people, ten thousand times over, are homeless because of subprime mortgages and unemployment. Do we rally as a nation to their aid? Do we build homeless shelters and shut down the greedy that were responsible for profiteering the very shelter that keeps men, women and children alive? Nope, not at all, if they were victimized, then American society has deemed them as not worthy, pushed under the rug until they can yet again become taxpayers with jobs, thriving in our society.
This is what we must over come to be heard. And we will not be heard from a position of underemployment, enslavement or hopelessness, least we move to a foreign country and scream from there.

WOW! Nice post.

 

[jnordquist]

I have gotten one of my old clients to use the Appraisal Firewall system (works great) and another to use the NVS. It is possible Pete.

Do not forget the Alamode/Mercury Network, I am getting more and more from them. Same sort of system as Appraisal Firewall. Just another option.

Jon N

 

[Mike Kennedy]

I suggest that the premise of this thread is "tilting at the wrong Windmills". Lenders were legally authorized prior to 1989, and prior to the HVCC, to CHOOSE in-house or external appraisal selection, ordering, and processing. Several of the larger AMCs have been in existence, and profitable, since the 1970s. The utilization of ALL third-party vendors (including Independent Appraisers) is a CHOICE made by Chief Risk Officers employed by every Lender. The Appraisal Industry must make it's case to LENDERS, their Regulators, and the ASC based on demonstrated expertise, competence, and USPAP compliance to effect change.

 

[mayflower]

There is something missing here. Appraisers have always been "hand sitters" and lone rangers. They never attempt to work together to better their own lot. If one is doing well, to hell with the profession, until the wheel of adversity turns their way. Then they see the problems again.

Congress of the United States is where the power is, and it is always for sale. Always has been. The day Appraisers start to put away $2.00 per assignment and send it to representatives of their choice to buy the influence they want for their industry is the day they get to work and live with some dignity.

Either play by the "rules of the game" or get out of it. Whiners can have some cheese with the whining and see where that takes them. Dodd/Frank is being gutted by those who have bought the government as you read this. Appraisers, get with the game. See how Bankers and Realtors are powerful? Who has blamed Bankers and/or Realtors for what is going on so far?

Get the gist? Buy members of congress.