I'm not surprised..

[Mejappz]

AMCs should be competing with others AMCs for business...

Assuming the OP letter is accurate,

If true market competition is at play between the AMCs, how can an AMC make so much money on an order?

Something does not add up.

I can assure you; that it's accurate.

 

[Mejappz]

AMCs should be competing with others AMCs for business...

Assuming the OP letter is accurate,

If true market competition is at play between the AMCs, how can an AMC make so much money on an order?

Something does not add up.

Simple. Take Class Valuation, for example. Their approach is reminiscent of past systems like eAppraiseIT, LSI, and WaMu. They employ staff appraisers who handle most of the workload, often prioritizing their interests over those of the client or consumer. Meanwhile, for high-value or complex properties, they send out bid requests to independent appraisers, who, are starving, and might bid as low as $200-$300. Class Valuation then pockets the difference, which can be between $1,000 and $1,500.

 

[Zoe]

AMCs should be competing with others AMCs for business...

Assuming the OP letter is accurate,

If true market competition is at play between the AMCs, how can an AMC make so much money on an order?

Something does not add up.

I assure you if separation of fees were not destroyed, that is exactly what would have happened. AMCs would have been in death spiral competing against each other.

I understand economics very well.

 

[Mejappz]

I assure you if separation of fees were not destroyed, that is exactly what would have happened. AMCs would have been death spiral competing against each other.

I understand economics very well.

Zoe, now you have another place where you can submit evidence.

Thread 'Appraisal Regulation Compliance Council'

Aug 27, 2024

A new organization has launched to provide appraisers with a platform for submitting evidence of corruption and fraud involving AMCs, lenders, and GSE/FHA/TAF entities. For more details, visit the link provided.

ARCC

arcc-usa.org

• Mejappz

• 

 

[RCA]

My understanding of it is that the GSEs were established to act solely as a secondary market conduit, not as an alternative for loan origination or to compete with the originating lenders. To either accept or reject the loan package, not participate in it's development. I don't think they're even allowed to engage appraisals for loan origination.

Since they buy the vast majority of loans, the result of low quality appraisals impact them more than anyone else. -- So, it does make sense to give them the responsibility of hiring the appraiser or, as the VA does, providing a list of acceptable appraisers - and flat fee (no negotiation).

- IT DOES NOT MAKE SENSE TO LET ANY INTERMEDIARY HIRE THE APPRAISER and set the fee - IF THE LOAN IS GOING TO BE SUBJECT TO SALE TO, OR GUARANTEE BY A GSE.

Doesn't the VA require VA lenders to use VA approved appraisers? Don't they have a flat fee? What is wrong with that?

 

[George Hatch]

I'm not suggesting that there's anything wrong with it. I'm just saying the GSEs operate under a charter that was approved by Congress and which includes certain limitations.

Fannie Mae Charter | Fannie Mae

Our Fannie Mae About Us page tells the story of how we became an innovative leader in the housing industry and mortgage financing.

www.fanniemae.com

 

[George Hatch]

I don't see how Fannie has any incentive to assume on behalf of the lenders the responsibility for any aspect of the origination process. Including the appraisal. As it stands right now the lender is on the hook for everything they do. If Fannie has a problem with a loan they just make the lender buy it back. Fannie can't do that if there's an appraisal problem that was created by an appraiser they engaged.

The GSEs even get cagey with their usage of their AVM in their Waiver program. They refer to their usage as "validating" the lender's value estimate. In that manner the "value" of the property is still plausibly on the lender, not on them; so Fannie can still force the lender to buy back the loan if there's a value-related problem. Of course, if that value estimate is out of line with their AVM their "validation" protocol clues them into that point and enables them to reject the application on the basis of the value. Same as if they admitted they are using the AVM to underwrite, except this play enables them to tag the lender for it. A potato spelled with an "e".

We ran into the mission-creep issue with the Dodd-Crowley proposal for the IVPI. Three of us were thinking in terms of a review-oriented ombusdman as was originally agreed upon in the HVCC but Dodd and Crowley wanted to take it further to create the mother of all AMCs in order to put all the other AMCs out of business. (That's why it's called the Dodd-Crowley IVPI). The inherent conflict arose that such an AMC would go far beyond the GSE mission, even if it was operated as a non-profit as proposed.

Not that any of that mattered at the time. Most appraisers positively hated the idea of validating the idea of an AMC of any type because they were hoping the HVCC agreement would collapse so they could pick up where they left off with their existing business model. Besides that the GSEs were never going to agree to get directly involved with appraisals. Even if all the appraisers had supported the idea of a VA-style rotation panel for all GSE work the GSEs couldn't have done it. No legal basis to do it.

 

[djd09]

By all means do. The forum is starting to implode once again. I, am barely able to log in. Do you think this is by coincidence? I had to piggyback on Terrel's Avatar to get in.

i like to give them one of those audits DW brags about...

 

[djd09]

i wonder how much REVAA paid the auditors to look away...

 

[RCA]

I don't see how Fannie has any incentive to assume on behalf of the lenders the responsibility for any aspect of the origination process. Including the appraisal.

Well the GSEs create the selling guidelines, so in fact they are taking responsibility for origination to that extent. They certainly don't need to be involved in the sales aspect including interest rates, servicing loans and so on - that is better left to the lenders.

You are right they don't WANT to take responsibility for the hiring of good appraisers, because that would put the responsibility of poor appraisals from poor appraisers using a poor appraisal system they largely engineer - ON THEM. As should be the case.

As it stands right now the lender is on the hook for everything they do.

If Fannie has a problem with a loan they just make the lender buy it back.

So, that is what happened in 2007? Fannie Mae and Freddie Mac just had the lenders buy back the loans? And what if the lenders were already bankrupt, or broke? Then what? Do you know what you are talking about? Really?

Fannie can't do that if there's an appraisal problem that was created by an appraiser they engaged.

That is called taking responsibility for your actions. Or if you will, assigning responsibility.

Engaging intermediary AMCs to hire appraisers is the GSEs shirking responsibility.

The GSEs even get cagey with their usage of their AVM in their Waiver program. They refer to their usage as "validating" the lender's value estimate. In that manner the "value" of the property is still plausibly on the lender, not on them; so Fannie can still force the lender to buy back the loan if there's a value-related problem.

Well, if the lender is still around and isn't yet broke - and so on.

Of course, if that value estimate is out of line with their AVM their "validation" protocol clues them into that point and enables them to reject the application on the basis of the value. Same as if they admitted they are using the AVM to underwrite, except this play enables them to tag the lender for it. A potato spelled with an "e".

I don't believe AVMs are at issue here. What you say is kind of true - but irrelevant to the issue.

We ran into the mission-creep issue with the Dodd-Crowley proposal for the IVPI. Three of us were thinking in terms of a review-oriented ombusdman as was originally agreed upon in the HVCC but Dodd and Crowley wanted to take it further to create the mother of all AMCs in order to put all the other AMCs out of business. (That's why it's called the Dodd-Crowley IVPI). The inherent conflict arose that such an AMC would go far beyond the GSE mission, even if it was operated as a non-profit as proposed.

Maybe what you are referring to here is obfuscation. The first time I heared of Dodd-Frank, I predicted the outcome. It wasn't so hard to do. It was one reason I got out of appraisal and went back into software engineeering. You have to have been an idiot not to see what is coming.

Just like the racial BS we have to deal with now. You can figure where it came from and where it is headed, without much intelligence.

Not that any of that mattered at the time. Most appraisers positively hated the idea of validating the idea of an AMC of any type because they were hoping the HVCC agreement would collapse so they could pick up where they left off with their existing business model.

Most are idiots.

Besides that the GSEs were never going to agree to get directly involved with appraisals.

Congress has to force it on them.

Even if all the appraisers had supported the idea of a VA-style rotation panel for all GSE work the GSEs couldn't have done it.

Well, appraisers being appraisers, one could truthfully argue that they were screwed from the get go and no one could have done anything about what was coming down the turnpike - short of RE-ENGINEERING THE ENTIRE SYSTEM.

No legal basis to do it.

Congress can make the legal basis.

Somebody has to create a better sytem and sell it to congress. That's all!

Somebody need to declare war on the entire appraisal system and the current leadership.