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Here's a good Idea

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hal380

Thread Starter
Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
Problem: AMC's work for the bank, and they make money by the spread between the amount they charge the bank's borrower and the amount they pay the appraiser.

Issue: AMC's add nothing to the quality of the appraisal service, but they do render a useful service to the bank.

Suggestion: Since the appraiser is rendering a service needed by the borrower, the appraiser is to be paid by the borrower, (at the time of inspection) and the AMC which is providing a service to the bank will be paid by the bank.

Result: There would be no incentive for the AMC's to reduce fees, so quality appraisers would be willing to accept AMC work, and fees would return to market levels.

Now I realize this is not a finely crafted piece of legislation as I have presented it. But I would like to think the concept is a good starting point for others to contribute and refine.

Regards

Hal
 

Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Don't think it will fly. I have also thought it the same way.

The banks have got to preceive a value in the service, if they can do it for less or the same as an AMC I think they would.

The AMC there for cuts some of the cost to the bank and passes that, then cuts the appraisers fee to make up the difference. That is where their gross porfit is at. They are saving the bank money on the back of the appraiser.

Banks are bottom line people. AMC want a large profit, it all falls on what fees the appraiser will accept as payment from the AMC.

So you have
bank savings.
AMC cost of operations
AMC profit
=
Low fees for the appraiser who will work for next to nothing.

Just my thinking.
 

jay trotta

Elite Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
it's a good plan, but I have now reviewed several articles that note "States" are now implementing Bills to keep AMC's out of the picture and provide various other requiremetns for the Banks, all under State Housing Act's. Currently our State is surrounded by NY & Mass., which have pending legislation on the issue. There will be new regulation's soon, so Lenders may want to check out those new requirements also.

Banks may end up having to go back to "pre- AMC regulation" and lets face it, most AMC's are Bank owned anyway, it was just a way for Banks to profit off your work. AMC's actually provide nothing to the Lender. Everyone keeps talking about "one central location or portal" BS - we live in a world now consumed with computerology, Banks can set up their own portal, allow a "Certified" appraiser to pick off the jobs and return the finished product threw the same portal. Hey, they (Banks) still have the ATM machines working and it's been ten+ years now - what kind of profit have they made from that ?? lets cut the BS out of the work area, we're not Selling anything, we are providing a required service by Federal Regulation for Risk Management.

It ain't over yet and there will be more to come, I'm sure
 

Jim Hill

Member
Joined
Oct 13, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Hal Pollack

I have thought the exact same thing for a long time.

The consumer picks the real estate agent, lender, lawyer, termite inspector and just about everything else when buying a home why not let them pick the appraiser?

This would solve many of the problems we face today such as comp checks from lenders or MB's who don't want to get stuck for the cost of an appraisal when they think the consumer is shopping their loan around.

Once the consumer had their appraisal in hand they could shop all the lenders they wanted.

The lender could then take the appraisal and have an AVM run on it to see if the numbers make sense or send out another appraiser to look at the home.

I would love to try this method and see if it works.

It just might solve many of the problems we have we getting paid our FULL FEE and stopping comp checks.

Please remember that the lender still can order their own appraisal or just using an AVM for $25.00 bucks if they want.

Jim Hill
 

PLCG

Member
Joined
Jul 12, 2006
Professional Status
Certified General Appraiser
State
Pennsylvania
I'm new. Isn't that the way it worked before the great 1985 crisis?
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
The problem is the appraiser doesnt provide a service to the borrower. Their lender does that. The appraiser provides a service to lender, who is their client. Its the whole client, intended user, intended purpose issue.
As best as I can tell, the AMC really provides a secretarial service to the lender and not much more.
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
The problem is the appraiser doesnt provide a service to the borrower. Their lender does that. The appraiser provides a service to lender, who is their client. Its the whole client, intended user, intended purpose issue.
[]

...............as do all the other providers you mention....except the agent. I like Jim's and Hal's ideas....although they are not new but a return to the way it was done many years ago and is still being done by many lenders. I get calls all the time from property owners who want an appraisal for refinancing purposes. I tell them that the LENDER must order it and to call their loan agent. A few minutes later I will get a call from the agent to place an order. So, in reality, who has ordered the appraisal? I think the main appeal of AMCs to a lender is that it takes the decision of who to call out of their hands and eliminates the necessity of maintaining a fee panel.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Issue: AMC's add nothing to the quality of the appraisal service, but they do render a useful service to the bank.
what service? The bank has to send the AMC an appraisal order, who then divvies it out to the cheapest appraiser. The bank has to write and/or automate the ordering procedure so why not provide that directly to an appraiser? Any newbie secretary for a loan dept could route dozens of appraisals every day saving them a bundle over AMC fees. The AMC serves one purpose. That is to create a legal firewall between them and the pressure they exert on appraisers. It is called "plausible deniability"...
 

hal380

Thread Starter
Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
Hi Terril;

Far be from me to give any praise to AMC's, but they do "Supposedly" screen appraisers, they review the report as a first screening, and they deal with the questions and issues raised by the appraisal, and eventually they pay the many appraisers.

I think they are over paid etc etc, but they do provide a modicum of service to the bank

Regards

hal
 
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