How long until HVCC goes away best case scenario?

[moh malekpour]

George,
Problem is not just the appraisers fee but how about 24 hrs turn around time that has nothing to do with supply and demand? As a matter of fact when they have higher supply of appraisers, they should give more time to appraiser to complete the report. This hasty turn time was unprecedented prior to HVCC. The current market is tougher than ever to do a due diligent appraisal and needs more than 24 or 48 hrs to get everything done correctly. There are foreclosure sales or listings , short sales or listings, auction sales and regular sales and listings out there. Some of these properties have unknown conditions and concessions that need to be searched and verified. Appraisers sometimes have to use REO or short sales or listings but they require adequate adjustments to their conditions, concessions and terms of sales. The information about them is not available in MLS. The agents don’t answer the phone right away and some of them need 2 or 3 days waiting for return calls. What appraiser is supposed to do if all these things were not done within 24 hrs? The appraiser does not get any more assignments if it was delayed. So, due to the pressure on appraiser to turn in the report on time, some appraisers take a risk and turn the report with unverified information which is going to be a misleading report.

 

[George Hatch]

This is what happens in a competitive market where there's an oversupply of vendors.

They're demanding the 24-hr turn times from you guys because right now there are enough of you who are willing to do it that they can get it. Their competitors are delivering 24 hr turn times and they need to compete.

I work on the other end of the market where the same lenders usually have to wait 3+ weeks for every single appraisal. Somehow they seem to be able to live with that without popping a vein.

If you guys were so busy that the average turn time for residential appraisals was 7-10 days then the AMCs wouldn't be able to get it in 24 hours no matter how pushy and aggressive they were.

Conversely, if you guys were so busy that some of you could extract a $150 premium for every 24-hr turn time I don't think you'd be complaining about AMCs or 24-hr TATs.

 

[CANative]

Moh speaks for me.

You guys might think the HVCC has come along and given the "lazy" an unfair advantage, but all it really did was to remove the ("fair") advantage that you guys used to have, thereby leveling that aspect of the playing field.

For me (at least) the playing field was not level because I couldn't compete with dishonest appraisers.

 

[moh malekpour]

So if they have 300 appraisers and 100 appraisal orders, they can push 100 of them to complete appraisals in 24 hrs and let the other 200 to sit there doing nothing. How about if the number of their appraisers reduced to 100 and they got 150 appraisal orders and asked the same 100 appraisers who were doing them in 24 hrs earlier to do them in 12 hrs and they willingly did them. Appraisers who are doing appraisals in 24 hrs don't care for due diligence of the report. they care for the quantity and money and if they could do them in 24 hrs, they can do them in 12 hrs as well. Problem is that short turn around time creates over-supply appraisals so as the demand for appraisers increases, the turn around time to do appraisals will decrease to compensate for extra demand and they can keep this balance all the times.
If they were giving appraisers 3 days to complete appraisals, they would not have over supply of appraisers but they created this over supply by pushing weak appraisers to do them in 24 hrs so they can pay lower fees due to over supply and this continues regardless of supply and demand. They can create the oversupply by demanding shorter and shorter tern times

 

[Kevin Mc]

For me (at least) the playing field was not level because I couldn't compete with dishonest appraisers.

I understand your point but I never wanted to compete with dishonest appraisers. They typically serviced clients who would never be on my radar. One of the greatest fallacies of the HVCC/mandatory AMC model for brokers is service and turn time. They will often get reports back quicker than when I serviced them but getting corrections and stips addressed apparently are nightmarish when dealing with many AMCs. That extra filtering time is negating any advantage 24 hr. turn time offers and the big box lenders are not closing anything faster than they ever did. Additionally challenging reports with AMCs appears problematic in that the MB (who actually may know something about values in their own market) often has a ridiculously hard time getting reconsiderations. Case in point I am currently attempting to help a MB get a report corrected that is easily $50K off the mark. Straight up, model match comps etc....The appraiser made a math mistake on time adjustments and the AMC refuses to address the issue. I understand the frustration from their side. I know the frustration from my own side.

 

[George Hatch]

Greg,

In all fairness, I did qualify my "leveled the playing field" by referring to "that aspect of the playing field" meaning how efficiently you guys market yourselves.


Moh,

You seem to be assuming that the people who are killing themselves to meet the 24hr turns are volunteering to do so for the heck of it and because they totally don't care. I disagree. I think those people who are doing it are doing so because they don't think they have any choice or options. I also don't think that if a 300-member appraisal population declines to 100 appraisers that the group that survives will only consist of the 24-hr friendlies.

While we're on the subject I would note that the balance of power in the appraiser/AMC relationships won't change until the assignment-per-appraiser ratio exceeds 1.5. When an AMC (or a lender) has more orders than heads they will be forced by their own volume to extend their turn times.

 

[MDAPPR]

Don't blame me for the over supply of appraisers. That is why I never mentor trainees that would be my future competition. Thank you guys for nothing that did mentor trainees.

 

[sunsetvalley]

I can tell you that the way the system was before isn't going back. It's time to get our heads out of the sand...I kept thinking that we'd be here only 6 months...looks more permanent now. So now I feel I have a mandate to push ahead with advocating more for the high quality, high fee appraiser.

I speak several times a month to small lenders who are getting sick and tired of the big AMCs and their crappy quality appraisals. They don't want to take the huge task of developing an appraisal ordering system because some have to cover several states, but they are sick of the cheap AMC model.

What they are looking for is appraiser owned and operated small regional AMCs who value quality, competency, fair fees and ethical transactions.

The tide is turning...slowly...but it's turning. I don't think unless we get some miraculous change that the big 5 are going to have a "coming to Jesus" moment anytime soon and change their ways. But what about the small correspondent lenders? They are looking for the quality that they had before.

If you care passionately about making a change in the AMC world...offer them the quality they want and need. Be very strict with who is on your panel. Only accept the best. You can't demand the world in fees...there's only so much the borrower is willing to pay especially when they can get a cheap appraisal from a big bank.

The GOOD ethical mortgage brokers were there before HVCC, I know we had at least 2 of them as clients. Those same brokers are looking for lenders that value appraisers and shun the AMCs.

It's an opportunity to increase business...it's tough, it drains everything out of you. BUT ultimately, you can make a difference and save your industry.

Appraisers have a VERY good opportunity to stand up together and speak LOUDLY now that we've had to deal with HVCC for 6 months. IT's showed what doesn't work. Appraisers (not banks or busines investors) need to stand up and show what DOES WORK. What is right. What quality is.

Fees are eroding because of the big AMCs. Until they find a way to start making them play fair, it's going to keep pulling the fees down.

 

[moh malekpour]

You seem to be assuming that the people who are killing themselves to meet the 24hr turns are volunteering to do so for the heck of it and because they totally don't care. I disagree. I think those people who are doing it are doing so because they don't think they have any choice or options

George,
Yes, I think they are doing it volunteerly because they have chosen the easy way and they know they can get away with it. They are not killing themselves, they are cutting corners. No body has put a gun to their heads to do that kind of work. They have option and reason to say they cannot complete due diligent report in 24 hrs time but they have compromised their integrity and accepted 24 hrs turn time for the heck of more money and more assignments. There is always an excuse for any wrong doing. It is called irrationalization but it is not acceptable to a rational mind. What was the skippy's thought process when he was accepting free determined value orders from mortgage brokers during the boom time? They were told to Do it or no more assignments. No more assignments was an option but skippy did not want to take that option. They tought, they had to it if they wanted to get more assignments. Was that excuse acceptable? We got exactly the same situation and mentality now but in a differetnt set.

 

[Dutchman]

Moh and George,

You are overlooking one part of the TAT time equation and that is clock time required to complete an appraisal. Even though it may require 6 work hours to complete a cookie cutter from start to finish, most of that 6 hours is split into smaller time periods of actually working on the report. I know of few appraisers that actaully take one report and work it straight through. Most try to achieve some sense of efficiency by scheduling inspections in the same sections of town on the same day and then following that up by inspecting the comps at the same time. Doing the research for these inspections ahead of time etc. etc. Thus the 6 work hours required maybe split into 3 or 4 different clock hour sections and these sections maybe split over several days depending on the appraisal. Thus requiring a faster turn time is dependent on available clock time and available clock time is a function of the location and proximity of subject, comps and office, availability of RE agents (check for concessions, you know) and availibility of public records. In other words, although it is theoretically possible to do an appraisal in 6 hours, physical limitations of distance, schedule and that possibility of phone calls from the AMCs causing interruptions make it very unlikely that it will happen on a consistent basis