How long until HVCC goes away best case scenario?

[CANative]

There is no denying that AMC use has increased since May 1. Since there have been no changes in the AMC business model the reasonable conclusion to draw is that appraisal competency will be further eroded.

Yet appraisers participate in a multi-page thread complaining and whining about LSI administering an FHA knowledge test for appraisers wanting to do FHA work for them.

Slowly but surely the most competent will give way to their lesser counterparts - it's the AMC way.

Or it could go the other way. Goofy skippy will be replaced by more competent appraisers because Goofy skippy will not be tolerated by MBs and Loan Officers. The market will deceide.

 

[Lloyd Bonafide]

Exactly and what do you think the odds of that happening is? That was the intent of the whole HVCC fiasco anyway. It is time to start over. The current system is bogus.

If the HVCC is scrapped, or when it sunsets, it will probably be replaced by something similar to what FHA is doing on Jan. 1. So still, I don't see mortgage brokers ever being able to order conventional appraisals again in large numbers. The best we can hope for is that AMCs lose favor, to lenders ordering more of their own appraisals from their own panel of approved appraisers. That system worked well 10 years ago, and it is working good today where it is utilized.

 

[Kevin Mc]

AMCs are the leading cause of declining appraiser competency. This was inevitable given their business model. Mr. Evans recently said he reviewed the "WORST" appraisal report he has ever seen, and I believe he has seen many. It was done by an appraiser hired by an AMC and apparently had passed the AMCs QC.

Why do I bring this up? Because the HVCC makes AMCs the easiest one-stop solution for lenders to comply with The Code. Worse than that, by allowing lender AMC ownership it pits the lenders short term interests against its long term ones. This in particular was not the case under the broker-select system.

There is no denying that AMC use has increased since May 1. Since there have been no changes in the AMC business model the reasonable conclusion to draw is that appraisal competency will be further eroded. This is certainly appears how the HVCC is playing out from reading the posts here, from talking with sales agents, and reading national news about the effects of the HVCC (although the NAR position appears overblown and self serving). We are still in the AMC filtering stage of the blast of appraisers who recently entered the AMC system. Slowly but surely the most competent will give way to their lesser counterparts - it's the AMC way.

So yes, I dislike the HVCC but not because it moved the cheese. I could open an appraisal mill tomorrow and run Craigslist ads looking for 3 runners, I mean trainees, with little chance of repercussion. I dislike the HVCC because it has degraded my chosen profession.

BTW I'm worried about the IVPI. They're six months late to the party. Maybe we should call the police, check the hospitals, and start a search .

Dead on target John.

MarkRoberts- My biggest problem with the HVCC is that it inflicts restraint of trade on my business. I developed legitimate clients over many years and have no access to them any longer because of those who submitted to pressure. While I think the "value pressure" being removed is a good thing, it was never my problem to begin with because I refused to deal with it. The HVCC had a whole lot of nefarious goals that had nothing to do with bad appraisals, they still exist. What it has done is provide fast,cheap and a profit center for those (too big to fail) who acted in the most reckless manner to begin with. Very little has been remedied.

 

[CANative]

The AMC problem has been obvious for at least five or six years. Instead of trying to work at solving the problem many of the appraisers on this forum just viewed it as "not their problem because I don't work for AMCs."

Well, now it has become your problem and your still not trying to do anything about it except complain about HVCC.

 

[George Hatch]

However good or bad appraisal quality is right now is attributable to what the lenders will take in.

People always look at "meaningful and not misleading" in USPAP as if it only applies in the one direction on the quality scale. What happens when "meaningful" to a particular lender means a very low level of quality? What happens when there is no demand nor incentive from that set of intended users to do better? At what point do these lenders have to shoulder the responsibility for their requirements that contribute to a set of assignment conditions that results in a workproduct - that while perhaps sufficiently "meaningful" to them - is abysmally low?

If a lender wants to demand decent appraisals and is willing to cut the knuckleheads off then they're not going to have a problem with appraisal quality. Of course, they're probably not going to get that kind of quality through an AMC unless they're paying a lot more that $350.

Those lenders who want $350 fees and 24 hour turns are getting exactly what they want. There's only so far you can go in blaming the appraisers for conforming to the expectations of the market.

 

[ockyappraiser]

"My biggest problem with the HVCC is that it inflicts restraint of trade on my business. I developed legitimate clients over many years and have no access to them any longer because of those who submitted to pressure."

I'll grant you that. Same with me. I had 4-5 main clients that I had worked with for over 10 years. That doesn't mean they didn't ask for precomps and ask if I couldn't just get a "little more" out of that appraisal. But even with the best of them, I would see the business gradually slide to appraisers just coming into the business that would promise to make their deals work.

But step back and look at this from a business model. AMC's are clients now just as mortgage brokers were. There are good and bad AMC's. I will submitt that you can market to them in the same way you did the the MB's. Yes some AMC's will only use those who will do the appraisal for the lowest rate. . .just like some MB's would only use those who would deliver the highest number.

 

[John Hassler]

Or it could go the other way. Goofy skippy will be replaced by more competent appraisers because Goofy skippy will not be tolerated by MBs and Loan Officers. The market will deceide.

It may well play out this way for a very few AMCs who cater to lenders of non-conforming loans.



When you go to the big city in the coming weeks, give me a ring. Depending on the time of day, lunch or appetizers are on me.

 

[Kevin Mc]

The AMC problem has been obvious for at least five or six years. Instead of trying to work at solving the problem many of the appraisers on this forum just viewed it as "not their problem because I don't work for AMCs."

Well, now it has become your problem and your still not trying to do anything about it except complain about HVCC.

Agreed. 5-6 years ago is when the serious proliferation of both AMCs and newly certified hit the ground running. They fed off each other and eventually led to the current system. I didn't create it, I wasn't part of it and it isn't a problem that anyone seriously wants fixed soon. As long as people are allowed to circumvent rules, not be held accountable for their actions and pay no price for their behavior it will continue. I'll watch from the sidelines thanks.

 

[John Hassler]

However good or bad appraisal quality is right now is attributable to what the lenders will take in.

People always look at "meaningful and not misleading" in USPAP as if it only applies in the one direction on the quality scale. What happens when "meaningful" to a particular lender means a very low level of quality? What happens when there is no demand nor incentive from that set of intended users to do better? At what point do these lenders have to shoulder the responsibility for their requirements that contribute to a set of assignment conditions that results in a workproduct - that while perhaps sufficiently "meaningful" to them - is abysmally low?

If a lender wants to demand decent appraisals and is willing to cut the knuckleheads off then they're not going to have a problem with appraisal quality. Of course, they're probably not going to get that kind of quality through an AMC unless they're paying a lot more that $350.

Those lenders who want $350 fees and 24 hour turns are getting exactly what they want. There's only so far you can go in blaming the appraisers for conforming to the expectations of the market.

Your comments are absolutely true whether we were discussing broker-select yesterday or the HVCC today. The choice of who does the appraisal and what constitutes "meaningful" has always been under the lender's control - and it should be in a free market where there are consequences, good and bad, for ones actions. Unfortunately, it turns out we do not have such free market controls in some segments of the lending industry.

 

[George Hatch]

What the HVCC has done to you guys is it has rendered worthless the value of your ability to market yourselves to a widely dispersed set of clientele. It has vastly reduced the number of clients you can get work from and has completely negated the value of personal relationships with these clients by moving any personal interaction down to clerk (read: non-user) level.

The reason you guys were able to get full fees from your MB clients is because the inefficiency of the heretofore fractured market provided an advantage to those of you who would go out and market yourselves and penalized those of you who didn't. 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.

The reason the fees have eroded is because a more efficient market will always be more sensitive to supply/demand, and right now the efficiency of the AMCs to better match the oversupply of appraisers with the current demand has manifested itself in the amount of the fees. There is a flip side to that when the looming undersupply eventually occurs, but right now that's too far off in the future for most of you to relate to it. Commodity pricing is very effective at the utilization of the principle of substitution, whether its pork bellies, oranges, or 1004 widgets. Nevertheless, pricing does still relate to utility. Gold is a commodity and it usually sells for more than oranges.