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I'm not surprised..

I also might assume the cost is a lot lower these days to run a panel due to the internet , software and portals -
The bank still has to interact with the AMC. I cannot imagine why it is much cheaper to use an AMC and pay high AMC fees when they can get the appraisal done a lot cheaper than the AMC charges...apparently the lenders don't give a crap how much the borrower pays for an appraisal. If they did they would do it themselves.
 
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The bank still has to interact with the AMC. I cannot imagine why it is much cheaper to use an AMC and pay high AMC fees when they can get the appraisal done a lot cheaper than the AMC charges...apparently the lenders don't give a crap how much the borrower pays for an appraisal. If they did they would do it themselves.
The lender does not pay any fee to the AMC (typically)
The AMC gets their compensation from a split of the borrower paid appraisal fee.
 
The lender does not pay any fee to the AMC (typically)
Actually, they do the old pass thru - They collect from the borrower, they pay the AMC, and the AMC pays the appraiser. Anyway, that is the way Wally-World banks do it. Title companies may handle the payments, but the bank (if a regulated bank) is supposed to collect such fees up front.
 
Actually, they do the old pass thru - They collect from the borrower, they pay the AMC, and the AMC pays the appraiser. Anyway, that is the way Wally-World banks do it. Title companies may handle the payments, but the bank (if a regulated bank) is supposed to collect such fees up front.
They pay as a past-through,, but there is no actual hard cost to the lender ( typically). That is why they flocked to the AMC's post-HVCC - the AMC provides a plausible deniability of a third party, does admin and QC review free of cost and engages the appraiser, all free hard cost to the lender - What other business gets to enjoy that perk of free of cost professional service paid for by the working vendors? None that I am aware of.

How can an individual appraiser compete against that? They can't. So appraisers have three choices: do no AMC work (which some can afford to do and others can not afford since the reality is limited director der clients), leave the business, or do only commercial or private. Either way, a sizable group of competent appraisers avoids AMC work, which means the investors and borrowers lack access to their services, and other comment appraisers have left the business because of it.
 
there is no actual hard cost to the lender ( typically).
Regulated banks are required to vet appraisers in their files as well as order the assignments from the AMC, which isn't free, just cheaper. The loan officer probably does not directly download the information to the AMC, rather goes thru their Credit Department or whatever they want to call it.
 
I have a direct lender that had to use AMC for hybrid appraisals. They hated it, said it cost more and took longer to get done than just ordering it as a 1004. And this lender pays my fee. It got to the point that when fannie ordered a hybrid instead of a 1004, the lender would override it back to their 1004 appraisers.

Unfortunately, the idiot savants found their way into our business like a virus. This talking is ok, but the train left the station a while back. We just happen to be good enough to be around till the last one of us says, go to h*ll fannie. Then when a big crisis hits fannie, there will be no one to help with values. fannie will then be broken up into smaller and smater companies, at a cost to all of use.
 
There’s so much bad behavior going on. It’s truly disgusting what we have in this profession. Like a previous poster said, you can get a better deal working with the mob. These gigantic AMC‘s are so corrupt and they break every law in the book. At some point, Regulators need to wake up. Perhaps it’s time to throw the appraisal portion of Dodd Frank in the garbage and redo it?
 
I will point out that the % profit reported in the chart isn't actually the profit. It is the percent of the cost of the appraisal. The profit would also need to deduct ALL of the costs of the Client... including overhead, insurance, labor, etc, etc.
 
If the lenders have the AMC captive they can set the rates. I'd imagine those using these AMCs are pretty sketchy in terms of following the rules themselves. Maybe its more worth it to pay an AMC $910 to find an appraiser they can browbeat into doing it for $220. What is so valuable about the AMC? Perhaps they can find an appraiser that is ethically challenged easier?

While its true most borrowers don't care about the split, I think they would care about paying over $1,000 when the appraiser is being paid $220. Of course they don't care about the split but they should be furious about paying so much oh and if the report is riddled with errors that prevents them from getting their loan, or perhaps that fee split is necessary to make sure they get a nice number hitter and the borrower likes it.
I know of 3 AMCs that are owned by the lender. All three take 150 out of an average 550 fee. Slightly below. Stage for my area…

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