HVCC-Seems ok, tell me why I'm wrong

[valuequestor]

Basically, just trying to understand how some appraiser's are okay with all of this...when so many AMC's out there are refusing new applicants....how are we suppose to get orders if AMC's are not allowing enrollment......and if the Lender is not using an AMC, what process are they going to use to locate an independent appraiser.

John

I feel you man. I had a good chunk of work removed with Flagstar going to their 3 -AMC solution. I never heard from Flagstar in advance to sign up if I wanted to continue doing there work and I have been stone walled by the three AMC's as far as getting the Flagstar work through them. I guess if these chuckle-heads (AMC's) already had an appraiser on their list, that appraiser automatically became "Flagstar Approved". How does that work??

I recently relocated and can't seem to get work in my new location from clients I've been working with for years. The system is not working very well.

 

[valuequestor]

In the past 3 weeks I have lost 3 good clients that primarily send FHA orders. Why? Because all of their companies have made it company policy that all orders, FHA or Conventional, are sent to their new AMC. One loan officer told me that their company pays the AMC a flat $400 fee and the same AMC contacted me to say that they pay $250 for FHA. Great........ I would charge $350 for FHA, so the consumer is getting fleeced for $50 and I am supposed to take $100 in the shorts. And the unknowing consumer is going to badmouth me when they see a $400 appraisal fee on their closing statement. Nice...

Exactly....and don't hold your breath. $250 is freaking high pay for an AMC. Most I know are now TELLING me that I will accept $200 or not receive any work and that I will accept $230 to do an REO and that includes the REO addendum and 1004MC.

And the fees are heading down. Most will not pay over $200 for anything soon with most fees between $150 to $175. Many of these A**Clowns are posting the work on bulletin boards to all rostered appraisers in the "market area" as a first come first served bidding approach. You are very likely to loose an assignment on your street to a desperate appraiser 50 or more miles away. But that's an efficient business plan...isn't it??

Its disgusting. We need to rally in March in Richmond, VA and in metro areas around the country. We need to be heard!m2:

 

[Frederick]

Right now before HVCC goes into effect some smaller AMCs appear to be moving the appraiser-broker relationship into their system. They get the broker business by telling the broker to refer their appraiser to them and they direct the broker's appraisal orders to that appraiser and take their cut.

When HVCC goes into effect they will have already re-established the broker directed appraisal ordering and circumvented all that HVCC says about the originator choosing and influencing the appraiser.

 

[OminousRun]

Having read through the Q & A a few times I can't find much wrong with it. While this thing may have been put together due to a lawsuit, the HVCC just makes good business sense for FNMA. The main thrust is to take the brokers out of the appraiser selection equation and put put it on the lenders shoulders where it should be. Then separate production from the appraisal process. Lenders are not required to use an AMC, they can if they choose to, and small banks are exempt.

I really like this part. Tell a banker about it every chance you get:

Q25. Is a lender required to use an appraisal management company for ordering appraisals? No. A lender may order appraisals directly from an individual appraiser.

As an added bonus, we will soon get a snitch hotline to complain about comp checks, pressure, etc.

The HVCC looks like it could have been written by many frequent posters on this forum. FHA is now the last refuge for the scoundrels.

In an ideal world, that would happen. The lenders just pick up the phone/fax/email and order the appraisal directly from the appraiser.

But in the banking real world, that's not how it's going to happen - and not how it currently happens. The lender will use an AMC to streamline their business. That is the appeal of the AMC to the bank. They take all of the legwork out of finding an appraiser, paying the appraiser, ordering the appraisal, checking status, etc.....and at no extra cost to the bank too!

Lenders will not be calling appraiser's directly, they will be calling the AMCs, and already are.

 

[rescom]

The lenders are the problem, not the AMCs.

Suppose you own an AMC. You are contacted by a lender that wants to send you all of their work and they don't care what you pay the appraiser, as long as they get an appraisal that is good enough to get through underwriting. You have no liability as an AMC. Thinking as a non appraiser, would you rather send orders to the lowest bidders and make $200 profit per order, or send them to the higher fee appraisers and make $25-$50 per order? I'll answer for you all. You would send them to the lowest bidder while trying to get the fees even lower for future orders.

AMCs are a business, in business to make as much money as possible, just like nearly all other businesses. If they can produce a product (appraisal) that their clients are content with for $150, then what motivation do they have to pay out more to another appraiser?

Lenders know what is going on, and they don't care. Direct your anger at the source. The users of AMCs are the problem. The AMCs are simply taking advantage of what is being handed to them. 99% of entrepreneurs would do the same thing, including all of you.

 

[ghrousseau]

Right now before HVCC goes into effect some smaller AMCs appear to be moving the appraiser-broker relationship into their system. They get the broker business by telling the broker to refer their appraiser to them and they direct the broker's appraisal orders to that appraiser and take their cut.

When HVCC goes into effect they will have already re-established the broker directed appraisal ordering and circumvented all that HVCC says about the originator choosing and influencing the appraiser.

The problem Frederick is that the HVCC clear states that the Broker can not originate the appraisal request even through an independent third party like an AMC. The lender loaning the money and making the loan needs to order the appraisal report. I suspect this part of the HVCC will have to be amended. When brokers start submitting loans without any idea of the appraisal value and without a complete package, the lender's workload will increase exponentially. If you approve a loan and the appraisal value comes in different, then the loan has to be re-underwritten. Also, it creates problems on the secondary market side for rate locks which also have to be updated any time there is a change in the loan to value or loan amount. Say originally the lender thought the loan to value was 80% and the appraisal comes in lower than expected. Now the LTV is 85% and the loan needs mortgage insurance. Totally different product and the price add on might 1.5% to the fee.

I'm telling you from the lender side of the business, this is going to be a giant charlie foxtrot and will dramatically increase the workload for lenders. And all those deals that fall through..................the lender is responsible for paying the appraiser and then collecting from the borrower.............going to be fun. This thing is definitely going to court without a doubt.

 

[JSmith43]

The problem Frederick is that the HVCC clear states that the Broker can not originate the appraisal request even through an independent third party like an AMC. The lender loaning the money and making the loan needs to order the appraisal report.

I haven't read the latest HVCC proposal other than skimming some parts.
How does one define "the lender loaning the money and making the loan?"

Does it matter how long they lend the money? The reason I wonder, is because many of the surviving brokers table fund loans. The major institutions still in the business typically hold the loans for as short a period as practical.

They want to deliver them to the secondary market. Perhaps they ortfolio some loans, but mostly it is loans that their LO's, processors or UW's botched up and need work or are uninsurable/unsalable even as "scratch & dent" paper.

I'm not so sure HVCC prohibits table funding brokers from ordering appraisals. However, investors may require them to order through a designated AMC. The brokers may have choices unless the wholesale market acts in unison.

 

[Kevin Mc]

I'm not so sure HVCC prohibits table funding brokers from ordering appraisals. However, investors may require them to order through a designated AMC. The brokers may have choices unless the wholesale market acts in unison.

Many brokers are teaming up with mortgage bankers in my neck of the woods. Given they are funding the loans themselves, HVCC does not apply. When they sell off to a warehouse it is part of a package and details such as who ordered the appraisal are a moot point.

 

[panappr]

Many brokers are teaming up with mortgage bankers in my neck of the woods. Given they are funding the loans themselves, HVCC does not apply. When they sell off to a warehouse it is part of a package and details such as who ordered the appraisal are a moot point.

I'm seeing that here too, and hope it continues...