Hybrid

[George Hatch]

I started 20 years ago and fee shops were more prevalent then, I went out after 3 years anyone had a choice...commercial shops make much higher $ per order so make sense for them to retain other cert appraisers and for complex/specialty work the head appraiser provides knowledge of some kind at least in some cases..in any event what is the point of constantly bringing up fee shops...though since you do, maybe their fee cut arrangement for res lending did not serve the profession well and if it is part of the problem then it was not a good precedent to base the AMC model on.

coulda, shoulda, woulda

It's all academic at those point except to the extent we are trying to rewrite history. The name of the game back during the big fee shop days was who had the relationship with the lender. The principal did, and the associates didn't; so that's why the principal was at the top and making a cut of each of the fees the principals did.

In fact, it was technology and licensing that broke most of the fee shops up, by enabling individuals to chase the scraps down that were unprofitable for the bigger operations to attempt to service.

 

[djd09]

A very respected, designated appraiser who has been published multiple times.

Is this like when you told me a poster was a lawyer when he was not?

 

[DWiley]

But The Cut is the $ paid to appraiser , out of the total $ for both services the lender sent you. ( thus it is a % relationship from the total, or a split, or cut ) .

IF the charge is between you and the lender, and lender sends you $ less as a total to get appraisal done including your service in an mount less than what borrower paid, what is lender doing with the rest?

In states where AMC and appraiser fee breakouts are mandatory in report, what does it look like

Does it look like this? : Borrower appraisal fee $500, AMC $200 Appraiser $300.

If it looks like the above, then it is a fee split, why are you saying it is not?

Lenders typically pass two charges to the borrower (1) the cost of the appraisal and (2) the cost of AMC management. The fact that the appraiser fee represents only a portion of what the borrower is charged does not mean that the appraiser is only getting a "cut." The appraiser is getting 100% of the fee that he or she agreed to. We don't pay appraiser X% of what we charge a lender. We pay appraisers 100% of what the appraiser charges us. There simply is no "split." Now, I understand why you want to characterize it that way, but it simply is not the case.

 

[sandpiperapp]

Lenders typically pass two charges to the borrower (1) the cost of the appraisal and (2) the cost of AMC management. The fact that the appraiser fee represents only a portion of what the borrower is charged does not mean that the appraiser is only getting a "cut." The appraiser is getting 100% of the fee that he or she agreed to. We don't pay appraiser X% of what we charge a lender. We pay appraisers 100% of what the appraiser charges us. There simply is no "split." Now, I understand why you want to characterize it that way, but it simply is not the case.

So those two charges that are passed on to the borrower are represented as two charges to the borrower, or is just listed as one "appraisal" charge?

 

[DWiley]

So those two charges that are passed on to the borrower are represented as two charges to the borrower, or is just listed as one "appraisal" charge?

That is entirely up to the lender who prepares the documents and has nothing to do with the AMC. Regardless, what relevance does it have to what the appraiser should charge/collect? The fact that a lender might blend another fee into that category has nothing to do with what you should charge for your appraisal services, does it?

As I have said before, this angst that some have about how fees are dislcosed/passed along is aimed at the wrong party. AMCs do not prepare those docs, nor do they have any input into lender policies about those docs. Some lenders separate it; most do not. Not really my concern. My contract is with the lender, not the borrower. My concern is that the lender pays me. What they do with the borrower is really none of my business.

As I noted before, during the comment period I support separation of the fees. Those making the decision did not go that route.

 

[J Grant]

Lenders typically pass two charges to the borrower (1) the cost of the appraisal and (2) the cost of AMC management. The fact that the appraiser fee represents only a portion of what the borrower is charged does not mean that the appraiser is only getting a "cut." The appraiser is getting 100% of the fee that he or she agreed to. We don't pay appraiser X% of what we charge a lender. We pay appraisers 100% of what the appraiser charges us. There simply is no "split." Now, I understand why you want to characterize it that way, but it simply is not the case.

I have never said characterized, the split as the appraiser splits a part of his or her payment ( fee) from the AMC back to the AMC! You keep inventing that, and it's hard to imagine why.

When you say lenders typically pass two charges to the borrower the borrower pays it as ONE appraisal fee, correct? YES or NO.

The answer is YES. I applied recently to refinance my mortgage to 2 lenders, both use AMC' s (I asked ) . I got a good faith HUD estimate statement from both and both had ONE appraisal fee listed. So the "2 charges" , 1) the cost of the appraisal and 2) the cost of the AMC management are "split" from the ONE appraisal fee the borrower paid

We don't pay appraiser X% of what we charge a lender. We pay appraisers 100% of what the appraiser charges us. There simply is no "split." Now, I understand why you want to characterize it that way, but it simply is not the case.[/QUOTE]

Duh of course you pay appraisers 100% of what appraiser charges you. But you stated prior to that the lender passes 2 charges to the borrower 1) cost of appraisal 2) cost of AMC management therefore 1 and 2 are SPLIT from the total borrower appraisal fee the borrower paid.

 

[J Grant]

That is entirely up to the lender who prepares the documents and has nothing to do with the AMC. Regardless, what relevance does it have to what the appraiser should charge/collect? The fact that a lender might blend another fee into that category has nothing to do with what you should charge for your appraisal services, does it?

As I have said before, this angst that some have about how fees are dislcosed/passed along is aimed at the wrong party. AMCs do not prepare those docs, nor do they have any input into lender policies about those docs. Some lenders separate it; most do not. Not really my concern. My contract is with the lender, not the borrower. My concern is that the lender pays me. What they do with the borrower is really none of my business.

As I noted before, during the comment period I support separation of the fees. Those making the decision did not go that route.

For appraisers, its' not just angst about disclosure, it's the MONEY, (lower t appraiser ) . This splitting of the borrower appraisal fee means naturally, an appraiser can not earn 100% of the borrower paid appraisal fee ( which is based on appraiser C and R), because that would not lead any room for profit to the AMC. Therefore, the appraisal fee split should not just be disclosed, the appraisal fee should not be split at all, the borrower appraisal fee paid at application should go to the appraiser and borrower write out a different fee for AMC management (or lender pay AMC a yearly sum or retainer it;s up to them )

We'v established by the term fee split we understand the appraiser gets paid 100% of what appraiser charges AMC. But what is paid to appraiser is split off the borrower fee,/amount lender sent to the AMC , so the AMC now has an incentive to obtain the cheapest appraisal possible ( which is not how direct lender or private work operates, where the $ a borrower or client pays for appraiser is the amount an appraiser earns. ) This sliding scale of AMC earns more when appraiser earns less naturally drives compensation to appraisers down, and despite the fact that 3, and only 3 low population COW states that AMC's are leveraged to pay more due to severe under supply shows that.

Minus this sliding scale payment relationship from the split, a client chooses by who is more qualified, or turn time in some cases, or on rotation, as long as the appraisal fee is reasonable/covered by borrower. Since they are not in the business from profiting from appraisals, they do not fee hunt for lower on every order, even if there is an over supply of appraisers, and even if the technology exists to do so. Imo this is a much better policy for taxpayer backed work, to remove the conflict of interest of profit in the very same companies (AMC ) that are outsourced with due diligence of selection for lender.

Yeah, they show real due diligence ( sarcasm): either an alogrithm /app chooses appraiser by lower fee or a blast email chooses by lower fee ( assuming turn time the same ) Does not splitting in a relationship % from lender to AMC for borroer paid result in better pay to appraisers that would benefit appraisers? Yes, and I see that as a positive too. Besides retaining and attracting qulaity people, it means appraisers do not have to pile on volume to make a decent living, meaning they can spend a bit more time on each order to get better results. Maybe they would even train again, if they thought the next generation of appraisers actually had a future in res lending work...

 

[J Grant]

DW_The fact that a lender might blend another fee into that category has nothing to do with what you should charge for your appraisal services, does it?

Of course it affects what appraiser should charge for their service if they want to get AMC orders.

Virtually all lenders uses one blended appraisal fee for borrower. Borrower pays $500 and lender passes through $500 to AMC, Which means the appraiser can not charge AMC $500 because AMC makes no money and would go out of business. ( I am aware on occasion if AMC having trouble filling in order will pay $500 or more and lose or make no money but they cant do that on a regular basis and stay in business.)

So of course it impacts what an appraiser should charge for their appraisal service to an AMC if they intend to actually receive work from that AMC. In Above scenario, AMC gets $500 from lender, AMC shops for an appraiser. Clearly an appraiser who charges $300 will have a far greater chance of getting that order than one who charges $400. So of course the fee split of X $ to AMC and Y $ to appraiser from the one blended fee borrower paid, will impact what appraisers can charge as a fee to actually receive orders as "their" fee .

 

[DWiley]

DW_The fact that a lender might blend another fee into that category has nothing to do with what you should charge for your appraisal services, does it?

Of course it affects what appraiser should charge for their service if they want to get AMC orders.

Virtually all lenders uses one blended appraisal fee for borrower. Borrower pays $500 and lender passes through $500 to AMC, Which means the appraiser can not charge AMC $500 because AMC makes no money and would go out of business. ( I am aware on occasion if AMC having trouble filling in order will pay $500 or more and lose or make no money but they cant do that on a regular basis and stay in business.)

So of course it impacts what an appraiser should charge for their appraisal service to an AMC if they intend to actually receive work from that AMC. In Above scenario, AMC gets $500 from lender, AMC shops for an appraiser. Clearly an appraiser who charges $300 will have a far greater chance of getting that order than one who charges $400. So of course the fee split of X $ to AMC and Y $ to appraiser from the one blended fee borrower paid, will impact what appraisers can charge as a fee to actually receive orders as "their" fee .

I am done. You have convinced yourself that you know how the AMC business works, and you don't. No matter how many times I try to explain it, you simply revert back to your incorrect assumptions/assertions.

 

[J Grant]

There is nothing incorrect in what I said. You said much the same thing in your prior posts when you explained it. I am just commenting on the implications of how it affects what appraisers charge and you don't like that.

Recap: lender charges appraisal fee to borrower, typically one blended fee. one $ amount fee for appraisal paid by borrower Are you now saying that is not so? We've all applied for mortgages and gotten our own loans and HUD good faith estimates or settlement statements so we know it is true

The lender sends a pass through payment to the AMC, you wrote that above in your own post, from which 2 costs are paid 1) to AMC 2) to the appraiser ( known as a fee split, from borrower paid appraisal fee, this language is used commonly describe it ) I acknowledged I am aware appraiser gets paid 100% of what appraiser charges the AMC,

AMC's shop for lower fees from appraiser for orders, most of us appraisers have bid for or submitted a fee for AMC work and know that to be true.

So what then, explicitly,, am I saying, that is incorrect or an assumption?

I am aware an AMC performs QC and reviews etc as a service