I'm not surprised..

[J Grant]

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.

You still don't get it - the bank does not pay a hard cost (typically ) to the AMC; the AMC gets paid a split from the BORROWER paid appraisal fee. (even if th bank cuts the check for it )

Which means the AMC service is essentially free to a bank - or the bank in some cases owns the AMC under a division and thus can profit from it.

 

[J Grant]

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…

One closed shop due to low volume

That is my experience with lender-owned AMCs as well. The fee that reaches the appraiser is not full C and R ,irect, but the fee is better than the AMC's that bid out or price shop orders.

 

[jay trotta]

I wonder if the mob clears that type of percentage of the action.

the difference between the mob and banks; you know what the vig is right up front,
banks take your money first, then give you possible costs/expenses (the over/under so to speak) what did they name that paperwork.........

 

[Zoe]

When we will as appraisers realize how bad we are being taken advantage of. View attachment 90488

I cannot see how CFPB and FTC have not jumped all over that.

 

[Zoe]

Some of the lenders own the AMC as their captive order department.
Wrt kick backs, I have no idea, I suppose it is possible.

WRt other reasons a lender uses an AMC - I have posted many times that they get this service free of hard cost to them via the HUD govt perk entitlement that allows the AMC to get paid from the appraisal fee split rather than then AMC charging their customer a cost like every other business out there -
A lender using an AMC saves the cost or admin of running their own appraisal panel= though amazingly, some lenders still use their own panel due to better quality control - I also might assume the cost is a lot lower these days to run a panel due to the internet , software and portals -

It is legal theft. It is fraud to the appraiser and the borrower.

 

[Zoe]

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.

That is why banks and AMCs fought hard to keep fees commingled on truth in lending disclosures to borrowers. They did not want AMC fee being separate from APPRAISAL fee on truth in lending disclosures.

 

[J Grant]

I cannot see how CFPB and FTC have not jumped all over that.

Because appraisers are not consumers. We are professionals being exploited by a HUD loophole of the blended fee allowing third party fee split of the borrower paid appraisal fee.

 

[J Grant]

That is why banks and AMCs fought hard to keep fees commingled on truth in lending disclosures to borrowers. They did not want AMC fee being separate from APPRAISAL fee on truth in lending disclosures.

Well, Imo disclosing the rot won;t change the rot - it just states what it is. t. The AMC fee needs to be PAID for by as a cost to the lender. If the lender can pass that cost on to the borrower, that is their business.

Disclosing the fee split in the TILA does not cure the problem, except to bring out in the open an extremely egregious fee split..

 

[Zoe]

That is my experience with lender-owned AMCs as well. The fee that reaches the appraiser is not full C and R ,irect, but the fee is better than the AMC's that bid out or price shop orders.

That is why Joan Trice was saying a long time ago that she thought appraisal fee should be at least $1,000 to $1,500. Joan knew where most of the appraisal fee would go to.

An AMC.

That is the part I don't get where CFPB and FTC have not jumped all in.

 

[Zoe]

Well, Imo disclosing the rot won;t change the rot - it just states what it is. t. The AMC fee needs to be PAID for by as a cost to the lender. If the lender can pass that cost on to the borrower, that is their business.

Disclosing the fee split in the TILA does not cure the problem, except to bring out in the open an extremely egregious fee split..

Many big companies have been in big trouble for hiding fees in their disclosures to their customers.

Several banks have been in that category that got in big trouble.