I'm not surprised..

[Zoe]

So you think the borrower would shop AMC fees?

I have been in this business a long time. I believe truth in lending disclosures should be true.

Do I believe it would create intense competition between amcccccs............with separation of fees?

hands down no doubt. Wager me.

 

[Zoe]

All we need is CFPB and or FTC to put that hammer down.

George talks congress crap. No. If CFPB or FTC says it is done.

It is done.

 

[Dublin ohio]

I have been in this business a long time. I believe truth in lending disclosures should be true.

Do I believe it would create intense competition between amcccccs............with separation of fees?

hands down no doubt. Wager me.

and who or what will drive that competition.

 

[Terrel L. Shields]

All we need is CFPB and or FTC to put that hammer down.

Oh, yes. And OJ wasn't the real killer. Jimmy Hoffa isn't dead.

 

[George Hatch]

No profession "floats fees" weekly.

The lenders do not want to waste time each week to check a fee difference, have to adjust it for all their customers etc.

Right now, the system works very well. A yearly fee survey is done for C and R and that fee is set for the year in a region for the lenders; panel for regular non complex work

Technology has already been of considerable effect on how these AMCs and lenders operate. What makes you think there are any natural limitations to whatever other evolutions in conduct the tech can enable?

Taken to its logical conclusion the possibility of fee volatility due to transparency to the appraisers could even affect which days a client selects and engages an appraiser for a particular assignment. It could even affect what time of day the appraiser is engaged. The lender or AMC version of the e-Bay "buy it now" button., hit the button and the system automaticaly notified all of the involved parties - no need for human monitoring at all.

Remember what I said earlier about more transparency vs less transparency. If what you really worried about was actually the effects on the borrower (which when appraisers make that argument it is a red herring , IMO) then you would embrace the logical outcome of max transparency in real time. Not clamor more transparency but only to a certain point.

So by all means, tell us again how worried you are about the consumer? We can't wait.

 

[J Grant]

The borrower could just as easily get billed for $300 if the AMC can find an appraiser to do it for that much.

Try thinking like a lender on this:

AMC#1 can deliver appraisals at $300-to-the-borrower​

or​

AMC#2 can deliver appraisals at $350-to-the-borrower​

As a lender you know that these AMCs are pitching these same proposals to all your competitors, so you know that if you won't take the low cost leader your competition will, and they might end up doing more deals than you as a result of it. What is the most logical decision you can make under those conditions?

Again, In the scenario I propose, the AMC does not decide appraiser fees, shop fees, or offer fees for appraisals. The lender establishes fees with the appraisers and the AMC manages, assigns, pays out does admin only.

 

[George Hatch]

We can hypothesize how such a system could work. If there was some tech geek who wanted to put some time/effort into putting it together.

Let's say I'm an appraiser who has some spare time this week due to low order volume. My oh-so-impressive array of direct engagement clients is slacking this week so I decide to engage in a little side hustle by taking on a couple of side orders, as opposed to not using that time for anything at all. I'm not cheating on my regular clients, I'm just stepping out with what amounts to a Tinder hookup.

I enter the system and see the low cost leaders are at $297.50 at this moment, so I just adjust my base fee on the list from $800 (because I'm way too good to work for less) down to $290. 2 minutes later I'm underbid by $5 by another competitor. So we go back-n-forth to see who gets the next order. Maybe a couple other peers enter into that bidding, or maybe they don't.

"Fly-By-Night" lender gets an order for an SFR that's located in our service area and their system automatically picks the lowest bid from whichever appraiser they have previously done business with - and can therefore nominally trust them. No phone call, no email except to award the assignment to that lowest pre-qualified bidder. Maybe I stick around after that to see if I can score another assignment or two; or maybe I reset me fee back to $800 because I'm already busy enough to get by that week and besides, I'm too good to work for less anyway.

 

[George Hatch]

Again, In the scenario I propose, the AMC does not decide appraiser fees, shop fees, or offer fees for appraisals. The lender establishes fees with the appraisers and the AMC manages, assigns, pays out does admin only.

There's absolutely nothing preventing that from happening now. Other than the lenders not having any interest in doing so. IRL the only way it can happen is if the govt forces them to do it that way. Against their will. That brings us straight back to the question of what it will take to motivate the govt to step that much further into the lender's business in order to impose those additional controls.

 

[J Grant]

Technology has already been of considerable effect on how these AMCs and lenders operate. What makes you think there are any natural limitations to whatever other evolutions in conduct the tech can enable?

Taken to its logical conclusion the possibility of fee volatility due to transparency to the appraisers could even affect which days a client selects and engages an appraiser for a particular assignment. It could even affect what time of day the appraiser is engaged. The lender or AMC version of the e-Bay "buy it now" button., hit the button and the system automaticaly notified all of the involved parties - no need for human monitoring at all.

Remember what I said earlier about more transparency vs less transparency. If what you really worried about was actually the effects on the borrower (which when appraisers make that argument it is a red herring , IMO) then you would embrace the logical outcome of max transparency in real time. Not clamor more transparency but only to a certain point.

So by all means, tell us again how worried you are about the consumer? We can't wait.

Lenders make their money from loans, not from shaving a few bucks off an appraisal fee, and that has nothing to do with technology.

Borrowers do not shop a loan by appraisal fee, unless the fee is extremely high compared ot the competition. They shop by loan rates , what programs a lender offers, personal connection with a loan officer or bank, and they might compare or shop the big ticket fees such as loan points and origination fees.

 

[George Hatch]

Lenders do things to save money, too. Starting with outsourcing a certain portion of the loan origination function and all/most of the appraisal function. Cheaper to pay a fee appraiser more when there's business than to carry an employee when there isn't enough business coming in to cover the carrying costs.

As for the borrowers, weren't you the one who was just fretting the prospect of how the borrowers would react if they "knew" who is getting paid what? How about you form an opinion and stick to it on a consistent basis?