I'm not surprised..

[CGinMN]

UWM has a deal with RSDS and I heard that they give them as many orders as they can even if their scores are bad. UWM calls them first and they take as many orders as they can for their appraisers. The rest of us just get whatever that company doesn't take. Have any of you heard anything similar?

Not commenting on the legitimacy of this, because it's hearsay. But I think that it demonstrates a lot of the AMC hate, not all of it, is misplaced and should be directed toward the IMBs.

IMBs do not care about appraisal quality, even when they are direct engagement. It is a simple math equation. They make more money with churn and burn appraisals than they lose in collateral repurchases. Meanwhile, portfolio lenders, some of which operate as direct engagement, some of which use AMCs, and some of which do both, tend to care more about the collateral risk and are willing to pay for competency as long as it's staying on their books. Some portfolio lenders have a direct engagement panel for the in-house loans, but then use Fast-N-Cheap AMC when they are selling to Fannie and Freddie. It's not about ethics or doing what's right, it about being able to control outcomes to improve the bottom line.

All appraiser dissatisfactions come down to one thing which is the implicit government guarantee of MBS issued by the GSE.

It cannot be said enough.

 

[J Grant]

If those AMC-users ever thought the $500 appraiser was worth more to them than the $150 appraiser they'd have been acting accordingly all along. They'd issue those directives to the AMCs. After all, the AMC works for the lender, not the other way around. Regardless of what you think.

You can't acknowledge the reality of "these lenders would ditch appraisers altogether if they could" in one breath and then claim in the next breath that they don't care about the accumulation of their costs.

We look at it differently - ( and there seems to be a disconnect due to the limitations of communication online.

The AMC users are lenders or banks, and any one of those lenders can drop the AMC tomorrow and order directly ( and some do). The lender does not care about a borrower paying $150 or $500- the lender does not pay either way. Hopefully, that is clear. The lender in facts needs a $500 to allow room for the AMC to take a split under the current system. And since no person can afford to, or would choose to remain in the appraisal field working for $150 an appraisal; therefore, the fee ends up being on the low side of at least a liveable income at $500 per order (noncomplex)

Moving on from there, my statement about lenders ditching appraisals was not about the cost of the appraisal, it was about the function of an appraisal (or any valuation )- that is why I also included the statement that lenders would also ditch an income verification or credit heck if they could - ( which is what they did in the bad old days of no income no doc loans.

 

[George Hatch]

The disconnect lies in one of us watching those AMC-users for what they actually do vs watching them for how we think they should act.

Regardless of the mechanisms used for getting those fees, those lenders obviously consider those appraisals to be sufficient for their usage; otherwise they would have made different choices. After 15 years of this we eventually have to acknowledge that they have developed fully informed opinions on the matter. And have formed the opinion that the lower-paid appraisers are doing good enough to the point that it's not worth it to them to direct the AMCs into a cost-plus.

The only way you can connect the dots of your talking points is to suggest the lenders are being fooled by the AMCs and don't know what they're doing. You apparently think they don't know what they're doing whereas I think they do know but simply don't care.

 

[Joyce Potts]

Compare the number of appraisals ordered by these AMC's over the same period of time and put in context.

If appraisers were regularly getting at least 75% of the fee, no appraiser would be screaming 'it's all about consumer protection and the public trust'.

The AMC split as in the example that Josh Tucker put together is NOT illegal. The problem goes back to the appraiser who accepts the fee and split.

Fannie is looking to rid itself of 90% of residential appraisals. Appraisers are now mostly obsolete, much like travel agents and taxi drivers, except that they voluntarily gave their data up to the GSE's.

 

[djd09]

where is the blue chipper...didn't he have a thread where the AMC just stiffed him for 600

 

[NC Appraising]

I'm still waiting for someone to give me current stats on the % of waivers, hybrids and traditional 1004s.

Not just waivers.

Two weeks ago mortgage applications for refis were up 35%. Not a peep. Silent.

How much of the market (hybrids or avms with pcr) has these staff appraisers at the AMCs that control 60% of the market share have taken?

It must be a lot for these companies to be hiring:
How to Stay Competitive? Join Opteon as a Staff Appraiser



Despite the rapid changes in today's market, Opteon offers all the tools you need to stay ahead. Joining Opteon as an employee means you won't have to worry about having the resources you need to adapt to the demands of the market. With Opteon, you’re equipped for success plus the following:


What’s Ahead for the Appraisal Industry:

1. Shorter Turn Times

• • Buyers and lenders demand quicker results.

1. PDR/PDC Work

• • GSE driving adoption.
  • Opteon Appraisers are completing this work today.

1. Fewer Lender Orders

• • Lower volume means fewer appraisals.

1. Alternative Products

• • Cheaper alternatives are on the rise.

 

[J Grant]

The disconnect lies in one of us watching those AMC-users for what they actually do vs watching them for how we think they should act.

Regardless of the mechanisms used for getting those fees, those lenders obviously consider those appraisals to be sufficient for their usage; otherwise they would have made different choices. After 15 years of this we eventually have to acknowledge that they have developed fully informed opinions on the matter. And have formed the opinion that the lower-paid appraisers are doing good enough to the point that it's not worth it to them to direct the AMCs into a cost-plus.

The only way you can connect the dots of your talking points is to suggest the lenders are being fooled by the AMCs and don't know what they're doing. You apparently think they don't know what they're doing whereas I think they do know but simply don't care.

I do know to who this is directed to, but it is clear to me they know and don't care ...or, to be more accurate, a number of loan officers and UW t lenders do care and are frustrated at the AMC product, but they are not the bean counter decision makers.

 

[RCA]

The disconnect lies in one of us watching those AMC-users for what they actually do vs watching them for how we think they should act.

Regardless of the mechanisms used for getting those fees, those lenders obviously consider those appraisals to be sufficient for their usage; otherwise they would have made different choices. After 15 years of this we eventually have to acknowledge that they have developed fully informed opinions on the matter. And have formed the opinion that the lower-paid appraisers are doing good enough to the point that it's not worth it to them to direct the AMCs into a cost-plus.

The only way you can connect the dots of your talking points is to suggest the lenders are being fooled by the AMCs and don't know what they're doing. You apparently think they don't know what they're doing whereas I think they do know but simply don't care.

ChatGPT says:

"You're absolutely right, and I appreciate your pointing out the crucial role of Government-Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac in the context of home loan appraisals and the potential repercussions of overvaluation.

When homes are overvalued and the loans are subsequently sold to GSEs, these entities assume the risk associated with these loans. If a significant number of such loans default—particularly if a downturn in the housing market occurs—Fannie Mae and Freddie Mac could face substantial financial losses. Here’s a more detailed breakdown of how this affects various stakeholders:

1. Government-Sponsored Enterprises (GSEs): When homes go into foreclosure and sell for less than the outstanding mortgage balance, GSEs like Fannie Mae and Freddie Mac absorb the financial shortfall. If these losses accumulate, the financial stability of these institutions can be threatened.
2. Lenders: While initially offloading the loans to GSEs does indeed mitigate immediate risk for lenders, a systemic issue with overvalued properties leading to widespread defaults can lead to broader market corrections, affecting even those lenders with diversified or hedged portfolios.
3. Taxpayers: During the 2007-2008 financial crisis, the federal government had to bail out both Fannie Mae and Freddie Mac to the tune of billions of dollars to stabilize the housing market and the broader financial system. Ultimately, taxpayers bear the burden of such bailouts when government funds are used.
4. Broader Financial System: The stability of Fannie Mae and Freddie Mac is crucial for the overall health of the housing market and, by extension, the financial system. Their struggle or failure can lead to tighter lending standards, reduced availability of mortgages, and can be a precursor to broader economic troubles.

Thus, the integrity and accuracy of home appraisals are not just a matter of individual or institutional finance but are also integral to the health of the broader economy. Accurate appraisals help prevent bubbles, mitigate risks, and ensure that GSEs, buyers, and other market participants can operate in a stable and predictable financial environment."

 

[chad hampton]

I'm still waiting for someone to give me current stats on the % of waivers, hybrids and traditional 1004s.

Not just waivers.

Two weeks ago mortgage applications for refis were up 35%. Not a peep. Silent.

How much of the market (hybrids or avms with pcr) has these staff appraisers at the AMCs that control 60% of the market share have taken?

It must be a lot for these companies to be hiring:
How to Stay Competitive? Join Opteon as a Staff Appraiser



Despite the rapid changes in today's market, Opteon offers all the tools you need to stay ahead. Joining Opteon as an employee means you won't have to worry about having the resources you need to adapt to the demands of the market. With Opteon, you’re equipped for success plus the following:


What’s Ahead for the Appraisal Industry:

1. Shorter Turn Times

• • Buyers and lenders demand quicker results.

1. PDR/PDC Work

• • GSE driving adoption.
  • Opteon Appraisers are completing this work today.

1. Fewer Lender Orders

• • Lower volume means fewer appraisals.

1. Alternative Products

• • Cheaper alternatives are on the rise.

One of the gse directors was in a podcast last year where he said hybrids/desktops were 3-5% and would not be increasing.

But they’ve all lied in the past, so i trust nothing a gse employee says at this point.

My issue is with state boards at this point. Hybrids, etc aren’t even permitted based on the laws in my state, AMC licenses should be revoked, etc. boards are stuck in the stone ages bringing appraisers up for what amount to minimal infractions while these bohemoth companies engage in illegal and unethical practices on a massive scale daily.

 

[Zoe]

ChatGPT says:

"You're absolutely right, and I appreciate your pointing out the crucial role of Government-Sponsored Enterprises (GSEs) like Fannie Mae and Freddie Mac in the context of home loan appraisals and the potential repercussions of overvaluation.

When homes are overvalued and the loans are subsequently sold to GSEs, these entities assume the risk associated with these loans. If a significant number of such loans default—particularly if a downturn in the housing market occurs—Fannie Mae and Freddie Mac could face substantial financial losses. Here’s a more detailed breakdown of how this affects various stakeholders:

1. Government-Sponsored Enterprises (GSEs): When homes go into foreclosure and sell for less than the outstanding mortgage balance, GSEs like Fannie Mae and Freddie Mac absorb the financial shortfall. If these losses accumulate, the financial stability of these institutions can be threatened.
2. Lenders: While initially offloading the loans to GSEs does indeed mitigate immediate risk for lenders, a systemic issue with overvalued properties leading to widespread defaults can lead to broader market corrections, affecting even those lenders with diversified or hedged portfolios.
3. Taxpayers: During the 2007-2008 financial crisis, the federal government had to bail out both Fannie Mae and Freddie Mac to the tune of billions of dollars to stabilize the housing market and the broader financial system. Ultimately, taxpayers bear the burden of such bailouts when government funds are used.
4. Broader Financial System: The stability of Fannie Mae and Freddie Mac is crucial for the overall health of the housing market and, by extension, the financial system. Their struggle or failure can lead to tighter lending standards, reduced availability of mortgages, and can be a precursor to broader economic troubles.

Thus, the integrity and accuracy of home appraisals are not just a matter of individual or institutional finance but are also integral to the health of the broader economy. Accurate appraisals help prevent bubbles, mitigate risks, and ensure that GSEs, buyers, and other market participants can operate in a stable and predictable financial environment."

I agree. GSE can now ask for buyback.

So many people got those like 2%-3% mortgages and don't want to sell. They don't want to pay higher interest rates right now unless they have to.

GSEs and lenders could care less if property is overvalued. They know Feds will bail them out if the Feds have to.

VA don't really operate that way.

They do not want a veteran getting over leveraged on their home or paying too much for it. Even 5% or 20% is big when a borrower overpays for their home or they borrow way more than the home is worth on a refinance.

HELOCs are in mix too.

The next fall will be worse than the last big bailout.

It could literally break the Country. Credit card debt is at all time high. When FED lowers the short term borrowing rate to banks, it will ease some pressure on credit cards and things like car loans. Mortgage rates are already reacting to Fed lowering rates but mortgage rates are tied more to long term bond rates. Like 10 year bond rate.