I'm not surprised..

[J Grant]

You ain’t kidding. Most can’t understand anything beyond supply and demand in a vacuum.

The supply /demand dynamic is very skewed to the AMC model, which is why they have so much leverage over fees.

 

[George Hatch]

The supply /demand dynamic is very skewed to the AMC model, which is why they have so much leverage over fees.

That's another way of saying most of the lenders are doing the one thing and not the other. For reasons which aren't going to just magically disappear if/when the AMC option is stripped from them. So much of the volume (70%-80% by your own estimates) is going that way that it's of catastrophic effect on the appraisal business.

They knowingly and deliberately use the low-cost appraisals now in order to compete. They're still going to want to compete if/when the AMC fees are capped or the AMC option is otherwise stripped away from them.

 

[J Grant]

That's another way of saying most of the lenders are doing the one thing and not the other. For reasons which aren't going to just magically disappear if/when the AMC option is stripped from them. So much of the volume is going that way that it's of catastrophic effect on the appraisal business.

If the FREE OF COST to the lender option of using an AMC were gone, lenders would either revert to ordering direct as a cheaper option, or they can opt to pay the AMC out of pocket if they can negotiate an acceptable cost, or the lender (might ) be able to pass on the cost as a charge to the borrower.

 

[George Hatch]

I challenge the assumption that those AMC users will stop caring about costs enough to stop shopping appraisers by price. You assume it will be so; I don't. I think that those particular lenders will hire those ex-AMC clerks and direct them to continue what they've been doing to control the costs.

Regardless, it will still be getting to the "if the option was gone" that will be the hard part. Only the govt can kill it.

 

[alebrewer]

If the FREE OF COST to the lender option of using an AMC were gone, lenders would either revert to ordering direct as a cheaper option, or they can opt to pay the AMC out of pocket if they can negotiate an acceptable cost, or the lender (might ) be able to pass on the cost as a charge to the borrower.

If the FREE OF COST to the lender option of using an appraisal were gone I can assure you - every lender on the planet would be using a bid model...

 

[George Hatch]

Like I have said before, what fee appraisers should really fear is the possibility of a transparent online bid process for the base fees. Where every appraiser can see what their competitors are actually doing. Crab Bucket 2025

"Banksters-R-Us, N.A., is please to present a bid proposal for SFR assignments in the Houston MSA. Participation in this online process is limited to appraisers based within 50 miles of downtown Houston, and with at least 3 years licensing status as documented by license dates. You will be issued a vendor I.D. number that can be used to submit your base fee bid for all non-complex SFR assignments with a property value of $1M or less in the Houston Metro, subject to fee upgrade requests for complex appraisal assignments as necessary. The individual base fee bid will be listed by vendor I.D. on our webpage, with appraisers being encouraged to adjust their base fee at their discretion. The following table shows all vendor bids starting with the lowest fees up to the highest fees. Thank you for your consideration and we look forward to working with our valued partners. Just follow the link below to get started"​

​

Come to think of it, if I operated an AMC or an approved appraiser panel for a lender I'd consider doing that right now. There would be nothing to prevent me from doing it.

 

[Dublin ohio]

Seems like a number of forumites have never been in a position to know how the upper levels of business think and operate. They are all bottom line oriented. How to cut costs and maximize profit. Makes no difference what business it is except for what I call "hobby" businesses.

 

[J Grant]

I challenge the assumption that those AMC users will stop caring about costs enough to stop shopping appraisers by price. You assume it will be so; I don't. I think that those particular lenders will hire those ex-AMC clerks and direct them to continue what they've been doing to control the costs.

Regardless, it will still be getting to the "if the option was gone" that will be the hard part. Only the govt can kill it.

You still dont; get it !!

If the AMC can not profit by one dime, whether the fee is lower or higher, they no longer have an incentive to fee shop. The fee paid to the appraiser would be the fee collected by the lender from the borrower -which removes the AMC out of the appraiser fee connection The AMC can then simply manage assigning, check cutting if need be, and QC review.

I agree the option to strike an appraisal from a bundled fee , or put a cap on teh amount an AMC can split, won't come about because the lenders own or use an AMC will jump up to volunteer for it-

 

[George Hatch]

Have you ever asked an AMC employee about how their employer competes for business with the other AMCs? I have. Consider this: what's a more profitable strategy for an AMC:

$150/assignment x 100 assignments per month

or​

$150/assignment x 600 assignments per month

The amount of their fee/assignment is fixed, but when it comes to the deliverables more volume is going to be more profitable for them than less volume.

Don't get me wrong, I have no objections whatsoever to separating the disclosures or capping AMC fees. I just don't think it will have much impact in how the AMCs compete with each other or how the lenders pick the winners of that competition. You obviously think otherwise.

Fun fact, one of the other panel members of the Dodd-Crowley IVPI proposal was the chief appraiser for a well despised AMC. I spent hours talking to them about these and other elements of their business.

 

[djd09]

I am sure the borrower will be pleased that an AMC blasted an order to every appraiser in FL.

eappraiseit sure missed out...