Hybrid

[Meandering]

View attachment 36015

Yeah but Joe,

Fannie is not an Intended User,

How much technology does an AMC need to have to hire a picture taker, that can email pictures to appraisers?


Gheeze.

Appraisers can write that template and use their own picture taker.

No additional technology needed.



Where anywhere does it say AMCs get to write software for Appraisers?


.

 

[bnmappraisal]

For each hybrid there is the loss of a (higher paying) full order, no? How does one "make it up with volume" in such a scenario?

I would imagine an AMC (I'm not talking about the company you work for DW, just AMCs in general) would make up the difference in volume just like an appraiser does when they take on a "volume guarantee" (or whatever similar name is given).

The company accepts a lesser fee than their typical higher paying client(s) in return for more volume. AMCs do it all the time! Just like appraisers

 

[hastalavista]

Danny if you remember in the past I pointed out to DJ that the interest of the AMC would be for more full appraisals, and not more hybrids. Btw, out of the reported $195 fee, if the AMC keeps $90 to $100, percentage wise, its right in line with the AMC profit margin target, right?

Greg-
I have no idea what Danny's company's gross margin is, but the numbers you are suggesting are not what I've heard from sources I consider reliable.
$100 to $175 (gross) might be the AMC top-line target on a $550-$650 total fee.
On a hybrid, its more like $25-$35. But even at that rate:
$195 - $35 (AMC) = $160 to the appraiser and inspector.
If an appraiser demands $125-$150+ (a rate I've heard from appraisers in my markets... and they are the lower-end of those rates the $195 total fee charged to the client doesn't work.

Now, if the fees go to $250 (total) then we might see something like this:
$250 - $50 (AMC) = $200. Now we are getting closer to what is demanded in my market:
$140 to the appraiser, $60 to the inspector.

If the fees went to $300...
$300 - $60 (AMC) = $240.
$175 to the appraiser, $65 to the inspector.

I venture to guess at $175 to the appraiser, there would be plenty of takers. At that point and if the Hybrids start to become a larger substitute for 1004s (let's just say they take over 25% of what is available... and what is available will be shrink from what's available now due to the expansion of PIW programs), then in order for AMCs to survive, they'd likely have to get more than $60 a pop.

I would think a lender would be more than willing to pay $300-$350 (all-in) for a substitute of $550-$600 (all in) that they can get faster.
(Key word here is "substitute"; not an "equal substitute" because hybrids are not the same as a 1004. But a appropriate substitute if the loan is low-risk and the higher-quality valuation of the collateral isn't significant).
In fact, a lender ordering 2,000 appraisals a month who could substitute a hybrid for their low-risk loans should be willing to pay up to $550 because they will get the product faster. But in the real world, because the belief is that the competency requirements for the two tasks are worth something different (an inspector doesn't need the same skill set as the valuation-analyst; i.e., the appraiser), the overall cost should be less than $550 even with the faster service.
So, $450 (all-in) sounds reasonable to me from the lender's side.
$80 to $100 dollars sounds like a necessary gross target for the AMC's side.
$360 (gross) would be the result of the above to the inspector & appraiser.
If these were paying appraisers $275 (and the inspector $85), would that be reasonable for the appraiser? That answer is up to the appraiser.

But it will never get to $275 for the appraiser if appraisers take $75-$100, regardless of what a lender would be willing to pay.

 

[Joe Flacco]

Greg-
I have no idea what Danny's company's gross margin is, but the numbers you are suggesting are not what I've heard from sources I consider reliable.
$100 to $175 (gross) might be the AMC top-line target on a $550-$650 total fee.
On a hybrid, its more like $25-$35. But even at that rate:
$195 - $35 (AMC) = $160 to the appraiser and inspector.
If an appraiser demands $125-$150+ (a rate I've heard from appraisers in my markets... and they are the lower-end of those rates the $195 total fee charged to the client doesn't work.

Now, if the fees go to $250 (total) then we might see something like this:
$250 - $50 (AMC) = $200. Now we are getting closer to what is demanded in my market:
$140 to the appraiser, $60 to the inspector.

If the fees went to $300...
$300 - $60 (AMC) = $240.
$175 to the appraiser, $65 to the inspector.

I venture to guess at $175 to the appraiser, there would be plenty of takers. At that point and if the Hybrids start to become a larger substitute for 1004s (let's just say they take over 25% of what is available... and what is available will be shrink from what's available now due to the expansion of PIW programs), then in order for AMCs to survive, they'd likely have to get more than $60 a pop.

I would think a lender would be more than willing to pay $300-$350 (all-in) for a substitute of $550-$600 (all in) that they can get faster.
(Key word here is "substitute"; not an "equal substitute" because hybrids are not the same as a 1004. But a appropriate substitute if the loan is low-risk and the higher-quality valuation of the collateral isn't significant).
In fact, a lender ordering 2,000 appraisals a month who could substitute a hybrid for their low-risk loans should be willing to pay up to $550 because they will get the product faster. But in the real world, because the belief is that the competency requirements for the two tasks are worth something different (an inspector doesn't need the same skill set as the valuation-analyst; i.e., the appraiser), the overall cost should be less than $550 even with the faster service.
So, $450 (all-in) sounds reasonable to me from the lender's side.
$80 to $100 dollars sounds like a necessary gross target for the AMC's side.
$360 (gross) would be the result of the above to the inspector & appraiser.
If these were paying appraisers $275 (and the inspector $85), would that be reasonable for the appraiser? That answer is up to the appraiser.

But it will never get to $275 for the appraiser if appraisers take $75-$100, regardless of what a lender would be willing to pay.

There are some real estate agent sites with agents talking about doing the exterior inspection for the hybrids and they are saying they get $25 from Servicelink. Appraisers are reporting that they are receiving $50-$75 (Not from Servicelink). You do the math.

 

[Eli]

Mortgage Insurers have nothing to do with the decision to remove PMI. That is the lender/servicer's call. If the lender does not want us to insure a mortgage any longer, all that they have to do is to send us a cancellation request or stop paying the premium and we will cancel coverage. Coverage is required to be cancelled on monthly policy's due to federal law/regulation when the principal balance of the mortgage is first scheduled to reach 78 percent of the original value of the secured property. PMI can also be terminated upon the borrower's request under certain other circumstances that would require a current valuation of the property. Whether a lender would accept a bifurcated appraisal for such purposes is their call.

It’s all clear now since I know where your bread and butter is with a PMI as your insurer.

 

[bnmappraisal]

But it will never get to $275 for the appraiser if appraisers take $75-$100, regardless of what a lender would be willing to pay.

worth repeating

 

[gregb]

This $195 hybrid is based on a third party exterior inspection. No sketch, no MLS cited and assumptions as to condition of the improvements. A concern to some lenders might be how the exterior inspector determined the finish status of the basement and if the appraiser states allocation method for estimated site value and paired sales for sca adjustments, why not show them in the report? Also, if an AMC has staff appraisers, why not use them to complete these hybrid reports?

https://www.visitcss.com/application/files/3815/2108/3920/CSS-Hybrid-Report-5.10-1.compressed.pdf

 

[George Hatch]

Must be nice when someone can edit a post, after the edit by the poster time has lasped. But take a look at yourself.

But you guys must be getting nervous.



View attachment 36014

You are the only one saying "competent" or most.

I'm saying where is the data that indicates what peers do????

No surveys.
No studies.
No white papers.
No Joan advertising.
Very few if any active appraisers on state boards that are peers of those doing residential lending work.

Where is the "proof" of what peers are doing?

And hand in hand with that is,

The only "proof" of what parties who are regularly intended users is,
wait for it,
Fannie Mae Forms.

Yup, lots of proof there

Oh and lots of proof can be found there for what "peers do" for Similar Assignments.

because "Similar" is residential Lending.
No Bob with great credit score and only needs a $40k loan on a $300k property.
Nope, That one is Specific.

You can attempt to spin "regular users for similar assignments" to mean all mortgage lending assignments if you want. You have never allowed the facts to stop you before.

And remember what I said about the burden of proof being on the state to make their case, not on the accused to prove a negative. You can assume otherwise, also on the fact-free basis.

But hey, if you're so convinced you're right on the subject then you should be picking up the phone and alerting your state board to provide fair notice that the board opposes these products and will investigate/penalize any licensee who is found to be doing them.

And Really George,

Where's those "Free Market" people,

Writing the software programs to sell to Appraisers for Appraisers to use, and hire their own inspectors???



What is the barrier there, George?

Oh and hey,

If these aren't GSE loans, nobody even needs them converted to XML for CU either, 'cause Fannie isn't an "intended user"

Right George?


Easy software to write. All appraisers need to do is hire a picture taker.

Nice strawman on the completely fact-free basis. When have I ever suggested that appraisers can't develop their own alternatives?


In fact, I can demonstrably prove the negative to that. Perhaps you have missed my previous comments about having developed my own set of appraisal forms back in 2007 and having using them in lieu of any appraisalware products for the last 10 years? And not just for SFRs, either. I use those forms for most property types I appraise.

You should apologize to me for the false accusation and refrain from doing it again.[/QUOTE]

 

[bnmappraisal]

Also, if an AMC has staff appraisers, why not use them to complete these hybrid reports?

Many (most?) do

 

[Artemis Fowl]

Why is the assumption made that adding a 3rd party inspector into the mix will speed up the process? Reduced turn time from AMC & Appraiser vs. AMC & Inspector & Appraiser?
Who is the inspectors client? Who selects the inspector?

Forgive me if these questions have been addressed...hard to find simple answers within 79 pages and counting.