Hybrid

[J Grant]

Anyone disagree with the notion that SFR fees would not suck so much but for the incursion of the AMC's?

Nearly everyone is cognizant of that, but for some reason George Hatch refuses to recognize it.

He keeps blaming it ONLY on supply and demand, which while a factor, is not the main reason fees have skydived down for SOME clients on res lending side...

How does he explain when in the same geo area with same supply of appraisers, including an over supply, that direct order lenders pay $450 and an AMC might pay $300 for the exact same kind of order?

 

[DWiley]

The whole thing is pathetic, the thinking of people like Chad ( who I just responded to), as well as the AMC and big box lenders who run appraisals as profit generators ( which is also a big reason why fees suck ).

Are you saying that you DON'T run your own appraisal business as a profit center?

 

[George Hatch]

No, making a profit isn't a bad thing at all. What can be a problem is short term thinking. The 10yr DCF for the "trainee gambit" starts out with grossing another $50k for a couple years, but ends up with making less in years 4-10, which in turn reduces the PV of the initial profits.

Now if the same appraiser hired semi-skilled clerical assistance to expedite their process and leverage their technical expertise during the fat years they wouldn't have to sweat the follow-on impact of that choice during the lean years.

 

[Eli]

The whole thing is pathetic, the thinking of people like Chad ( who I just responded to), as well as the AMC and big box lenders who run appraisals as profit generators ( which is also a big reason why fees suck ).

All of which are reasons the better appraisers wont' train and the short term thinkers/factory minded will train, which will hasten things headed in the wrong direction. But the AMC profit split is the engine driving the fees down never forget that.

Can you speak at the next TN appraiser coalition meeting? I can get you there to speak on separation of fees. You’ll have a standing ovation.

 

[J Grant]

Are you saying that you DON'T run your own appraisal business as a profit center?

I don't profit by ripping someone else off (sorry, being blunt) by driving down their compensation low for work I did not perform. ( the appraisal ). Obviously I am in the wrong side of things...

The AMC is entitled to run a for profit business! That is not the issue. But they should make their profit by charging their customer ( the bank or lender ) who benefits form using the AMC service, whether per file or annual retainer etc( whatever they arrange with their customer ) , keep it separate from, and not contingent on what $ appraiser makes or intermingled with the appraisal fee.

 

[J Grant]

Can you speak at the next TN appraiser coalition meeting? I can get you there to speak on separation of fees.

Send me a private email cant' do it for free ! But I can write a speech you can read or whatever you need if too $ for me to go in person.

 

[George Hatch]

Nearly everyone is cognizant of that, but for some reason George Hatch refuses to recognize it.

He keeps blaming it ONLY on supply and demand, which while a factor, is not the main reason fees have skydived down for SOME clients on res lending side...

How does he explain when in the same geo area with same supply of appraisers, including an over supply, that direct order lenders pay $450 and an AMC might pay $300 for the exact same kind of order?

What I recognize that many of you refuse to believe is that the HVCC expedited an inevitable trend. It was inevitable that the excesses of the MBs would have the results it had, whether the impetus for that evolution had come sooner or later, or been called the HVCC or some other legal mechanism. It was inevitable that the technology would enable the aggregation of the market, AND that the lenders doing the most volume would find it economically feasible to incorporate that tech to pit the appraisers against each other. It was inevitable that the oversupply the SFR appraisers created for themselves would come back to bite them in the *** on the fees via competition, or that appraisers would resort to swapping fee for volume.

100% Inevitable. You can shoot the messenger (the HVCC) but that doesn't the fact that we would have ended up here regardless of the trigger.

 

[J Grant]

I recognize that the HVCC expedited an inevitable trend. It was inevitable that the excesses of the MBs would have the results it had, whether the impetus for that evolution had come sooner or later, or been called the HVCC or some other legal mechanism. It was inevitable that the technology would enable the aggregation of the market, AND that the lenders doing the most volume would find it economically feasible to incorporate that tech to pit the appraisers together. It was inevitable that the oversupply the SFR appraisers created for themselves would come back to bite them in the *** on the fees.

Inevitable. You can shoot the messenger (the HVCC) but that doesn't the fact that we would have ended up here regardless of the trigger.

I call BS, because NOW, with the same technology that "aggregates the market " direct order lenders do NOT use this technology to drive down fees/fee bid on regular res work assignments.

YES or NO, is this true or not? I have asked this question numerous times and you never answer it ....

I know it is true, because, I work with both direct lenders and AMC 's in the exact same area and see the fee $ difference and they both have the same technology available.. (I will post a 2nd response)

 

[George Hatch]

AND that the lenders doing the most volume would find it economically feasible to incorporate that tech to pit the appraisers against each other.

Which, BTW, is the answer to why some lenders are using AMCs and others aren't. I keep telling you that but you just don't want to acknowledge it.

Tell me, do you really think the reason your direct engagement clients are doing that is out of altruism or morality or out of a sense of responsibility to you? Of are they doing that for other reasons such as wanting more quality or more control over a much smaller approval panel?

I have direct engagement clients whose approval lists don't amount to even a dozen heads. It should be obvious why they don't bother using an AMC.

 

[J Grant]

What I recognize that many of you refuse to believe is that the HVCC expedited an inevitable trend. It was inevitable that the excesses of the MBs would have the results it had, whether the impetus for that evolution had come sooner or later, or been called the HVCC or some other legal mechanism. It was inevitable that the technology would enable the aggregation of the market, AND that the lenders doing the most volume would find it economically feasible to incorporate that tech to pit the appraisers against each other. It was inevitable that the oversupply the SFR appraisers created for themselves would come back to bite them in the *** on the fees via competition, or that appraisers would resort to swapping fee for volume.

100% Inevitable. You can shoot the messenger (the HVCC) but that doesn't the fact that we would have ended up here regardless of the trigger.

Second reason this is false is because if lenders can not fee split with themselves, why would they care what an appraiser charges, as long as it is reasonable and covered by borrower ? ( they dont't care ). Only an AMC cares, (or lender division run as an AMC ) because the AMC can PROFIT from driving the appraiser fee portion lower.

It is the profit motivation, not the availability of technology that is the factor driving fees down, and would with or without X technology in place. Do you truly believe what you write on this topic? That is what I want to know have you convinced yourself of it despite evidence to the contrary (since you are rational in most other areas )