I'm not surprised..

[Joe Flacco]

The way I view AMCs is that they are for newer appraisers to gain experience on their own before moving on to better clients. They are stepping stones. Working with AMCs shouldn't be anybody's long term business plan. So from that perspective, AMC has their place.

 

[ZZGAMAZZ]

10-20 %? Lol More like 40-70%. It’s all part of the shell game that they are allowed to play by the regulators and their partners in crime the GSEs.

Probably explains why I've gradually increased my fees during the past 12 months...now almost up to where they were more than 20 years ago.

 

[Terrel L. Shields]

Probably explains why I've gradually increased my fees during the past 12 months...now almost up to where they were more than 20 years ago.

Yeah, that sucks doesn't it? Nobody here took a job for less than $300 in 1994, but 30 years later AMCs still offer $299 less 'technology fee'...what a laugh.

 

[ZZGAMAZZ]

Yeah, that sucks doesn't it? Nobody here took a job for less than $300 in 1994, but 30 years later AMCs still offer $299 less 'technology fee'...what a laugh.

I needed two new tires yesterday. The Allen Tire poster in the shop stated hourly labor fees of $175 !!!!!!!!!!!!!!!!!!!! Competition and pricing trends as affected by inflation exists among virtually every type of business, so why haven't residential appraisal fees increased accordingly? Of course the AF will cite low-ball appraisers who lower the bar, but why would that factor affect appraisals but not all other industries, e.g., Allen Tire has 100's of local competitors but they still charge a premium fee--at least from my perspecive. [Of course, nothing can explain why I had more $$$$ in my savings account at the bank when I was 15 years old than I do now after working a MINIMUM OF SIX DAYS A WEEK FOR 30 YEARS.....]

 

[Mejappz]

I needed two new tires yesterday. The Allen Tire poster in the shop stated hourly labor fees of $175 !!!!!!!!!!!!!!!!!!!! Competition and pricing trends as affected by inflation exists among virtually every type of business, so why haven't residential appraisal fees increased accordingly? Of course the AF will cite low-ball appraisers who lower the bar, but why would that factor affect appraisals but not all other industries, e.g., Allen Tire has 100's of local competitors but they still charge a premium fee--at least from my perspecive. [Of course, nothing can explain why I had more $$$$ in my savings account at the bank when I was 15 years old than I do now after working a MINIMUM OF SIX DAYS A WEEK FOR 30 YEARS.....]

Because The Allen Tire is in a market that is not regulated while you and I are strangled by regulations that are put in place to benefit those in power. All under the guise of “public trust”.

 

[J Grant]

Don't stress about it then. You know your target client type so focus on that and forget about those that don't fit.

I am not stressed about my own business ( which is 85% AMC free), though the threat is always present that a direct order client might use an AMC ( sometimes it happens, though sometimes a lender who uses an AMC drops the AMC and orders direct so it can work either way )

I write about it because some seem ignorant about the process; if appraisers are well-informed, they can make better decisions going forward and not post misinformation that clouds the issue. I also wrote about it because I hate what it has done to the profession and I had to spend a lot of my savings post-HVCC to avoid the low AMC fees and work to get direct lender clients back or find new ones - years of financial loss to rebuild a business- why was that necessary? Other appraisers have left the business because of it or suffered serious financial losses, whether they chose to work for an AMC or not, it negatively affected their business.

 

[Zoe]

If CFPB and/or FTC just asked for all truth in lending disclosures and other records that show splits on APPRAISAL/AMC fees to borrowers, the house of cards would fall quickly with CFPB and FTC.

Fees would get separated on truth in lending disclosures. Congress would say okay. No problem CFPB and FTC.

It would create intense competition between individual AMCs.

Nobody would have leg to stand on. HUD could not fight it. Literally nobody could fight it if CFPB and FTC said do it.

No amount of lobbying money could fight CFPB and FTC.

Politicians would lose their job if they fought it.

Banks would not fight it.

Joan Trice would not fight it.

Nobody would fight CFPB or FTC.

Nobody.

I know how fees got combined. It was lobbying money.

CFPB and FTC did not know what they know now.

 

[J Grant]

I wouldn't say never on that. When I appraise SFRs for the regulated lenders they always ask for a bid. But sure, if a company's sole business is to engage and manage appraisals then that function isn't some tertiary function for them. It's literally the primary function in which they have specialized, so it would be inevitable for them to look to control costs as much as possible.

These are not GSE orders that you bid on, it is not the same as the AMC presence wrt impact on fees and bidding that exists in GSE orders..

WRT your verbiage about if a company's sole business is to engage and manage appraisals( an AMC), it would be inevitable for them to control costs-that is not the issue, the issue is these AMCs do not charge their customers ( the lenders or banks ) for their service, as other business do.. The AMC gets compensated from a split out of what the appraiser ( who they call a vendor) is covered by the borrower. Thus, the AMC fee bidding is not about "controlling costs ", it is about gouging the fee as much as possible because that is the way they stay in business since, due to the govt perk of the HUD blended appraisal fee, they are allowed to legally siphon money from the vendor and not charge their bank customer.

Give me examples of other businesses that operate that way. I can't think of any. I want free lawn service and free housecleaning service or free accounting service that a middleman provides because they dock their worker's pay and therefore do not charge me, the customer. I have not seen this offer from any business or professional. Only appraisers have to subsidize a third party because of the bundled appraisal fee, which the AMC system exploited to create a thriving industry. Prior to the HVCC, there were AMCs, but they mainly did title work, and if they also managed appraisals, their cut was low, around 10% or so - those very same AMC companies, post-HVCC, increased their fee split to 40-60% and other entrepreneurs, seeing the goldmine opportunity, jumped in to form AMC;s and grab as much business as they could. .

 

[J Grant]

I have long (as in 30+ years) thought that lenders should not be able to pass any expenses straight through to a borrower. None. Including the appraisal cost. The appraisal is done for the lender, and it should be at the expense of the lender. Asking the borrower to pay a direct fee for the appraisal is no different, to me, than asking them to pay a pro rate share of the rent, the electric bill or any other cost of doing business as a lender. But, hey, I don't make those rules.

My only intent in posting in this thread is to help some better understand how the business actually works. When I was in AMCland we did have orders where our gross exceeded the appraiser's fee - and for everyone of those I could show you several where there was a gross loss because the appraiser fee was more than the AMC total fee.

I hope you all have a great weekend. I am out.

We appreciate your participation ( and for taking the heat for a system you do not control.)

WRt your idea that the lender cover teh appraisal cost - won't happen, it would cost they far too much and they'd take a loss every time a borrower switched lenders or did not qualify for the loan or a deal died for various reasons. It would also make them resort to intense pressure since they now take a direct $ loss for an appraisal that does not make value.

It would be far cheaper for teh lender to pay $100 for the AMC service then for the lender to pay for the entire appraisal. The problem is not AMC;s per se, the problem is the way they do not get compensated as a charge paid by the lenre, but rather from a fee split of the consumer paid appraisal fee.

 

[chad hampton]

The way I view AMCs is that they are for newer appraisers to gain experience on their own before moving on to better clients. They are stepping stones. Working with AMCs shouldn't be anybody's long term business plan. So from that perspective, AMC has their place.

Not disagreeing, but this is the complete opposite of what it should be. New/green appraisers should not be the ones out there doing the lions share of the mortgage work for the nations largest lenders. All of which use their friends who run the largest AMC out there. New appraisers should be using small/local clients who have a real QC system in place and not some automated bull**** computer based QC that is worthless. A real human reviewer with an appraisal certification should be reviewing newly minted appraiser's field work.

It shouldn't be the appraisers with 25 years of experience fighting over the last 15-20% of the pie.