Hybrid Appraisals

[J Grant]

You can swap any number you want in there and t won't change the conversation. The deal will occur at wherever the point is for the meeting of the minds, just like any other transaction.

Regardless of however much the AMC agrees to work for, they aren't in the lending business where the mortgage deal is the thing and for whom the appraisal assignment is a trivial distraction. The AMC is in the shopping-for-appraisals business where the appraisal is the thing. Just like a fee shop.

lol - it won't change an imaginary conversation in your head - okay.

An AMC is not a fee shop. A fee shop consists of appraisers producing appraisals.

The AMC manages the process. The appraisers still produce the appraisal when an AMC is used. The AMC is a middleman, and the lender would pay a cost to the AMC for middleman services instead of the AMC getting compensated by a fee split from the borrower's covered amount.

 

[George Hatch]

Remember, the lenders we're talking about right now are the ones who use AMCs. Not the ones that don't. If I were you I would not ignore their pattern of conduct over these many years or attribute to them some altruistic virtues they have never previously demonstrated.

I expect people to act the way they normally act. I think you should adopt the same expectation.

 

[J Grant]

To further show why it is ridiculous to think a lender would pay $250 to an AMC if the lender covered the cost, lenders are allowed to own an AMC under an umbrella division. When that happens, the AMC is run on a cost-plus basis - I do some work for a lender AMC ( the only AMC I work with ). The AMC takes about $100 off C and R fee in region paid by borrower and the appariser gets the rest.

The lender is not even "paying" their own AMC $250 for a noncomplex order!

Another lender-owned captive order AMC pays similarly - it is called cost plus.

 

[J Grant]

Remember, the lenders we're talking about right now are the ones who use AMCs. Not the ones that don't. If I were you I would not ignore their pattern of conduct over these many years or attribute to them some altruistic virtues they have never previously demonstrated.

I expect people to act the way they normally act. I think you should adopt the same expectation.

Well IDK, how do you act?

I am not saying the lenders would be altruistic. I am saying they would be unlikely to pay an AMC $250 per order !! The lender would offer the AMC as little as possible, and if teh AMC's charge too much, he lenders would order directly. If the lender could pass the AMC cost charge to the borrower, they would do so as a line item.

 

[George Hatch]

OMG, what part of "the number itself is irrelevant to the gist of the conversation" is going over your head?

Here, I'll redraw the picture in crayon so that even you can understand the basics of this exchange between these two types of entities operating at this level of avarice. Whatever you do, please don't eat the crayon. Eating crayons is bad for your knees.

Me: Okay, so we agree that your end is $250 $100 and is billed separately in our disclosures from the appraiser's fee, right?​

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AMC: Of course. Does this mean you don't care what the appraisers' fee is? After all, the borrower is paying both fees, not you.​

​

Me: Are you high? Of course I expect you to bring me the best deal on appraiser fees that are available. Why else would I do business with your company EXCEPT to control the total of the fees I'm passing on to my borrowers? I do not intend to lose business to XYZ bank across the street over a $25/deal difference in the fees they're charging their borrowers.​

​

AMC: But what of the appraisers? Don't you care about their well being?​

​

Me: You need to step away from the crack pipe. I'm in the lending business, not the appraiser-nanny business. Appraiser lives don't matter to me. I only care that they make their work look good enough to get me by without causing me any problems. That's your other job; to ensure the work is "good enough" before sending it to me.​

​

Me: And just in case I haven't made myself clear, if you won't do it I'll just go find another AMC who will. After all, you have well over 100 other competitors in North Carolina as we speak. There's nothing special about your company. ​

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AMC: No need to repeat. We always understood this aspect of it from the outset. ​

 

[J Grant]

OMG, what part of "the number itself is irrelevant to the fundamentals" is going over your head?

Here, I'll redraw the picture in crayon so that even you can understand the basics of the conversation. Whatever you do, please don't eat the crayon. Eating crayons is bad for your knees.

Me: Okay, so we agree that your end is $250 $100 and is billed separately in our disclosures from the appraiser's fee, right?​

​

AMC: Of course. Does this mean you don't care what the appraisers' fee is? After all, the borrower is paying both fees, not you.​

​

Me: Are you high? Of course I expect you to bring me the best deal on appraiser fees that are available. Why else would I do business with your company EXCEPT to control the total of the fees I'm passing on to my borrowers? I do not intend to lose business to XYZ bank across the street over a $25/deal difference in the fees they're charging their borrowers.​

​

AMC: But what of the appraisers? Don't you care about their well being?​

​

Me: You need to step away from the crack pipe. I'm in the lending business, not the appraiser-nanny business. Appraiser lives don't matter to me. I only care that they make their work look good enough to get me by without causing me any problems. That's your other job; to ensure the work is "good enough" before sending it to me.​

Geore, have a nice night. You are becoming overwrought and making imaginary conversations and then going on to justify it with insults - none of which makes sense !

 

[George Hatch]

Ah, so you finally DO get the point that the AMCs will never be allowed to stop shopping by fee. Noted.

 

[glenn walker]

HARD Stop we helped manage a direct lender's in house fee panel for 8 years and paid 100% of what we collected directly to the appraiser the order was sent to. At that time the average was $450.00. The company covered reviews, tech QC and ordering and receiving the appraisals and the 1,000 Sf Ft office space, utilities and three hourly employees at $15.00 to $20.00 per hour.

After 2022 year end and accounting and tax preparations the CPA had a hour visit with the lender's owners, myself and a manager. He advised us that we lost on average $200.00 dollars per appraisal ordered,delivered, reviewed and funded and some less and some more. The owners realized to cover in house orders a gross fee of $650.00 plus would have to be collected from borrowers. Then we had to seperate the fees say $450 to appraisers and $200.00 to XYZ Funding.

That wouldn't fly because borrowers would say what's the extra $200 for ? They don't believe we do anything but they do believe a big AMC with a big Name Like Copper Logic who has brochures the loan officers can give them showing a Team of Young hot chicks on giant computer screens with data streaming.

Those borrowers believe the AMC is worth the $200.00 to assure their appraiser and quality is done right.

There ya go it costs too much to manage your own fee panel and it was easier for that lender to contract with AMC who if borrowers complained about fees or the appraiser it was easy to have loan officers blame the AMC. If it was easy or made money there wouldn't be any AMCs it's worth every dime to have them manage your appraisers.

 

[djd09]

FAIR is a coalition of five of the nation’s largest AMCs,1 which operate networks of individual appraisers and appraisal firms for the completion of appraisal reports. FAIR members have become leaders in the industry by adopting responsible polices and procedures to protectappraiser independence, promote quality appraisals, and serve lender-client needs in a timelymanner for the ultimate benefit of homeowners.

1 The five AMCs are: (1) LSI, a division of Lender Processing Services, Inc.; (2) ServiceLink Valuation Solutions,LLC, a Fidelity National Financial, Inc. company; (3) Valuation Information Technology, LLC d/b/a RelsValuation, an affiliate of CoreLogic, Inc. and Wells Fargo Bank; (4) CoreLogic Valuation Services; and (5)PCV/Murcor.

https://financialservices.house.gov/uploadedfiles/hhrg-112-ba04-wstate-dkelly-20120628.pdf

An industry is generally considered an oligopoly when the four-firm concentration ratio (CR4) is above 50% or 60%. This means that the largest four firms in the market collectively hold a market share greater than 50% or 60% of total sales or output.

...

 

[J Grant]

Ah, so you finally DO get the point that the AMCs will never be allowed to stop shopping by fee. Noted.

IDK if AMC's will ever be prohibited from shopping by fees. And if you read my posts , you would see that I never asked for that. I asked that the appraisal fee paid by borrower not be split with an AMC ( all needs be done is exclude appraisal fees from the bunded fee on the HUD.

The lender pays the AMC as a cost. THAT is what I asked for . That is different from saying AMCs are prohibited from shopping by fee. However, if the lender paid the AMC and the AMC could not get a split of the appraisal fee, the AMC would not have the incentive it has now to shop fees.

Surely, the bank could raise other fees to compensate for the fact that they are now paying the AMC cost, and you would see banks negotiate low AMC charges if that were to happen.