- Joined
- Jan 15, 2002
- Professional Status
- Certified General Appraiser
- State
- California
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. .
Name one business that is oriented and operated to serve the interests of the vendor and not the customer. You can't.
That's because the lenders' usage of appraisals is all about them. It's not all about you or me. It never has been. The only reason the fee appraisal business came into being the thing starting in the 1970s was due to the lenders outsourcing that function instead of carrying it in house. We have essentially been living off the scraps they discarded from their process when they outsourced our function as well as the loan origination function. Instead of complaining about the lenders leaving fewer scraps for the fee appraisers to scavenge we should consider ourselves lucky that we even got this far.
I have come to accept the fact that at some point and WRT mortgage lending assignments I will most likely be replaced by an AI-enabled alternative that is being operated out of a concrete tilt-up located in a rural town in Nebraska or the Philippines. I think most appraisers should give that possibility as much consideration as I have.
In parallel, if I were operating an AMC right now then I would be figuring out what I'm going to do when the lenders choose AI-Karen to replace the AMC function. Because there's already nothing THEY do that can't be operated from a concrete tilt-up in Nebraska or the Philippines.
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