I'm piling on....F the AMCs

[George Hatch]

We sign that cert along with several others which are violated if/when the appraiser lies in an appraisal report. That's separate from the lender's responsibilities under the banking regs. The lender is still held to account for all of the appraisals they engage and use. When they used an MB they could claim they didn't know how the appraiser was engaged or whether/not the appraiser was pressured to return the desired outcome because 100% of that process occurred outside of their or their assigned agent's (the AMC) direct control. They can claim the MB lied to them.

They effectively can't claim the AMC worked behind their back to cheat them nor does the AMC get paid more or less based on the outcome of the appraisal.

The critics are fixated on the amount of the fee; the banking regs are fixated on protecting the appraiser's objectivity and impartiality. Whether that appraiser starves or not isn't their concern.

 

[J Grant]

We sign that cert along with several others which are violated if/when the appraiser lies in an appraisal report. That's separate from the lender's responsibilities under the banking regs. The lender is still held to account for all of the appraisals they engage and use. When they used an MB they could claim they didn't know how the appraiser was engaged or whether/not the appraiser was pressured to return the desired outcome because 100% of that process occurred outside of their or their assigned agent's (the AMC) direct control. They can claim the MB lied to them.
They effectively can't claim the AMC worked behind their back to cheat them.

Sure they can claim that! Which is why they use an AMC! ( in additon that it is a free service )

 

[George Hatch]

There are always paper trails between the lender and the AMC which document who said what in these situations. That paper trail and the pattern of conduct over the number of examples is exactly how eAppraiseIT and WAMU got caught. They were able to narrow the illegal conduct right down to the emails that documented those conspiracies and the individuals who sent them.

And you had sure better HOPE evidence of AMC pressuring appraisers to return the desired results - and that those results caused additional damage - shows up because if the evidence doesn't show up then that will completely justify their model and make it impossible to force the lenders to go to direct engagement only.

After this many years the critics would already have a ton of such evidence to make that case if the AMCs had been actively shopping assignments around for the desired result or not paying uncooperative appraisers for not returning that desired result. Instead, all you have is that appraisers get dropped from future assignments. As also happens with that direct engagement model you and I prefer.

But hey, if the critics can assemble the evidence to make that case and force the lenders to go to direct engagement whereupon they will advance to getting dropped by the offending lender itself instead of the offending AMCs - same outcome.

Transitioning to requiring direct engagement only is a possibility but I wouldn't consider it a very likely possibility at this point.

 

[J Grant]

There are always paper trails between the lender and the AMC which document who said what in these situations. That paper trail and the pattern of conduct over the number of examples is exactly how eAppraiseIT and WAMU got caught. They were able to narrow the illegal conduct right down to the emails that documented those conspiracies and the individuals who sent them.

And you had sure better HOPE evidence of AMC pressuring appraisers to return the desired results shows up because if the evidence doesn't show up then that will completely justify their model and make it impossible to force the lenders to go to direct engagement only.

After this many years the critics would already have a ton of such evidence to make that case if the AMCs had been actively shopping assignments around for the desired result or not paying uncooperative appraisers for not returning that desired result. Instead, all you have is that appraisers get dropped from future assignments. As also happens with that direct engagement model you and I prefer.

But hey, if the critics can assemble the evidence to make that case and force the lenders to go to direct engagement whereupon they will advance to getting dropped by the offending lender itself instead of the offending AMCs - same outcome.

The AMCs are too slick to have a paper trail of pressuring appraisers. They simply stop giving work if an appraiser does not hit value ( to whatever threshold the AMC deems acceptable ). That is why the system is insidious. The AMCs do not shop for the desired result. They are too smart for that! They stop giving work to appraisers who do not hit values often enough, end of story. They give no reason, and if the appraiser asks why, they say volume has dried up . Nearly every appraiser here, I bet, has had it happen to them if they worked for AMCs. A lender can do the same thing of course. However, the reason the AMCs came into existence as the solution with the HVCC was to avoid the value pressure conflict of interest.

OF course, by now it barely matters since the GSEs have done an end run on the appraisal regs to not hit a pre-determined value - the WAIVER /value acceptance hits the pre-determined value with the mortgage lender estimating the property value for the LTV that makes the deal work!!! How crazy is that - the very thing the HVCC and later Dodd Frank sought to stop !! There is no violation of an appraisal regulation because there is no appraisal. Genius!!

 

[glenn walker]

It seems instead of destroying an entire profession and the way we get clients, they could’ve just licensed the mortgage brokers and said if you’re caught pressuring or threatening an appraiser, you lose your license. Seems that would’ve been a simpler route.

But that would have resulted in appraisers keeping their small businesses and not having that money get funneled into the breakfast club.

Mortgage Brokers are licensed.

 

[George Hatch]

The AMCs are too slick to have a paper trail of pressuring appraisers. They simply stop giving work if an appraiser does not hit value ( to whatever threshold the AMC deems acceptable ).

All true except for the part that it's the AMC that's unhappy with the value conclusion. They don't care because they still get paid regardless. If an AMC is pressuring appraisers that pressure is coming from the lender THROUGH the AMC.

But since we're worried about blacklisting, lets speak directly to it. The direct engagement lenders also drop appraisers without a paper trail. Going from AMC to direct engagement will not get appraisers away from how blacklisting works. What the current setup HAS accomplished is in cutting way back on the contingent engagement/compensation forms of pressure.

 

[George Hatch]

Mortgage Brokers are licensed.

By the states. For the most part they won't have federal banking regulators showing up 4x a year to go through their loan files. They won't have regulators from multiple agencies camping out in their conference rooms for 2 weeks at a time pulling files and looking for problems.

There is no silver bullet to the issue of completely isolating the appraiser from the loan originators. But there is more vs less of it. Better vs worse.

 

[J Grant]

All true except for the part that it's the AMC that's unhappy with the value conclusion. They don't care because they still get paid regardless. If an AMC is pressuring appraisers that pressure is coming from the lender THROUGH the AMC.

But since we're worried about blacklisting, lets speak directly to it. The direct engagement lenders also drop appraisers without a paper trail. Going from AMC to direct engagement will not get appraisers away from how blacklisting works. What the current setup HAS accomplished is in cutting way back on the contingent engagement/compensation forms of pressure.

The AMC's does not care about the value conclusion since they are not an end user, and will get paid. Yet, the AMC does care because their lender customer will drop them if the AMC delivers too many "low " values. This is the flaw in the system.

This is not progress if the AMC system has cut way back on the component engagement/compression form of pressure -it simply switched the pressure from the front end to the back end. And with this comes an additional problem - there are far fewer AMCs (and lenders) than there were mortgage lenders, so an appraiser could easily replace a client. The worst offenders in my experience were two AMCs that were captive orders for a lender, but oddly enough, a year ago, one of them came back and must have gotten spanked because now they are a great client who does not drop for a low value, though the ROV is pretty rough. A direct lender, as well as AMC's, have dropped me for not hitting value, so it is client-specific. And yet, I have clients who are direct lenders and wholesalers who do not drop for a "low value" - as long as it is supported.

It is unfortunate that the issue has been so poorly handled despite the HVCC and Dodd Frank. That is because the stakeholders, imo, never wanted true appraiser independence, which would have meant a round-robin or other solutions to effectively isolate the appraiser from pressure. In all these years, a simple, cheap 1-800 number for appraisers to file a complaint and be protected has never been established.

 

[glenn walker]

There's really no way to ever make appraisers happy. By nature most are extremely negative people and bitched and moaned years before licenses had been required. That's why most were divorced or living alone and everyone was out to get them they don't play well with other.

 

[George Hatch]

Blacklisting for non-cooperation occurs with probably most client types. MBs do it, too; and so do legal and accounting clients. It's not specific to AMCs or lenders. . I'm just pointing out that it's the lenders who drive that conduct in the AMC engagement loop even if they're not doing it directly. If the lender didn't want an appraiser to get cut the AMC would keep using them .