Inadequate fees for Field Review Work

[Verne Hebert]

I haven't logged on to the forum for months and only a few times in the past 12 months. However when I pulled up the home page there were a number of threads regarding reviews; this wouldn't have been common in years past...it would seems many more are being done now (I wouldn't know, I have been billing real fees for real work).

Here is my issue today. And it is unsettling. I received a field review through the fax from LSI for $ 200.00. In 1994 FNMA 2000's came through at $ 250.00. Now in 1994 a quality FNMA 2000 could not be done for $ 250.00. I took a quick look at the appraisal; rural with 5 sales. The first three all bracketing down from the top. Sales 4 and 5 likely requested after submittal to bracket up from the bottom. Value $ 335,000, DOV 5/08.

Now. I performed a relocation appraisal on this property in October 2006; it was listed at $ 345,000-- I arrived at an anticipated sales price in a 120 period $ 271,000. It sold april 2007 for $ 265,000. I called LSI and apprised them it was rural with 5 comps, gas was 60 bucks, the field work and confirmation was one long day, then office report work the second day. Fee $ 500 bucks, and thats a deal because I was going fishing out there anyway. The comment was we only get $ 350. Now the market has been stable since early 07---I haven't performed the review--but I would suspect the market value is about $ 265,000.

So our mortgage industry problems continue in every arena. I can't imagine the hundreds and thousands of substandard reviews that are rubberstamping this kind of work on overvalued property across the nation.

Some one please email me when some govt official or department starts shoveling this S$$$ and shows some concern for American Citizens.

The US government is killing us.

 

[Tudor]

I haven't logged on to the forum for months and only a few times in the past 12 months. However when I pulled up the home page there were a number of threads regarding reviews; this wouldn't have been common in years past...it would seems many more are being done now (I wouldn't know, I have been billing real fees for real work).

Here is my issue today. And it is unsettling. I received a field review through the fax from LSI for $ 200.00. In 1994 FNMA 2000's came through at $ 250.00. Now in 1994 a quality FNMA 2000 could not be done for $ 250.00. I took a quick look at the appraisal; rural with 5 sales. The first three all bracketing down from the top. Sales 4 and 5 likely requested after submittal to bracket up from the bottom. Value $ 335,000, DOV 5/08.

Now. I performed a relocation appraisal on this property in October 2006; it was listed at $ 345,000-- I arrived at an anticipated sales price in a 120 period $ 271,000. It sold april 2007 for $ 265,000. I called LSI and apprised them it was rural with 5 comps, gas was 60 bucks, the field work and confirmation was one long day, then office report work the second day. Fee $ 500 bucks, and thats a deal because I was going fishing out there anyway. The comment was we only get $ 350. Now the market has been stable since early 07---I haven't performed the review--but I would suspect the market value is about $ 265,000.

So our mortgage industry problems continue in every arena. I can't imagine the hundreds and thousands of substandard reviews that are rubberstamping this kind of work on overvalued property across the nation.

Some one please email me when some govt official or department starts shoveling this S$$$ and shows some concern for American Citizens.

The US government is killing us.

So LSI gets 43% of the fee and for doing what exactly? When will the AMC's be held accountable?

 

[Verne Hebert]

I wouldn't bank on this being true. It may or not be. There contract (and all AMC's) fees are bid by the "product" to each of their clients. And here infact lies one of the dilemmas. The client believes they are getting a professional service for there money...............and this service is "somewhat" arms length and reliable (or do they?).

But LSI's margin is not the point here. The point is, they are bidding this very important appraisal work in the check and balance system.

 

[Elliott]

When I quote fees I have a pretty good idea of the amount of work
and time required. Just because an AMC says their fee is $X doesn't
have any affect on what my fee is. What don't I understand?

 

[Tudor]

But LSI's margin is not the point here. The point is, they are bidding this very important appraisal work in the check and balance system.

I think any AMC's margin is important, maybe the Lenders know, maybe they don't (actually I think they like the large margins, because I believe they get some of it).

Regarding your point, I agree, to them it doesn't matter how difficult or complex an assignment is, all of their fees are the same. LOW.

 

[Lee Lansford]

...
So our mortgage industry problems continue in every arena. I can't imagine the hundreds and thousands of substandard reviews that are rubberstamping this kind of work on overvalued property across the nation...

Believe it.

To some users of our services, nothing matters more than "fast & cheap" (or, is it "cheap & fast"?). They view appraisers similar to one views kernels in a bushel of corn: all more or less the same, so why pay more for one than the other?

 

[Lee Lansford]

...The client believes they are getting a professional service for there money...

I suspect that at least among the "higher-up appraisers" who work in QC for major lenders, they pretty much know what they are getting and are only hopeful that what they receive is not in fact worse than the original appraisal.

When it comes to managing the need for appraisals througout the US of A, national lending entities pretty much know what they are getting...and it isn't very good (IMHO).

 

[c w d]

Verne, the low fees are for exactly what you stated: A rubber stamp. And for $250 or less that's all they're given and all they want. I've been offered field review fees as low as $100. You can't tell me they don't know what's involved. And you can't tell me that for $100 they actually expect me to do more than just say OK.

I just completed a review. It took me the better part of a week to finish it. I spent 2.5 hours just driving around to view all 6 comparables that were in the original appraisal plus the 5 I decided to use. Total time to verify, comment, grid new comps, comment more, proof read, proof read again, approx. 8 hours.

For $250 minus my company's cut I could wash dishes instead of appraise.

 

[Kevin A. Spellman]

The new field review reports are an appraisal also. LSI fees and demands do not make economic sense for a skilled appraiser.

 

[Bama Bayou]

A field review takes me about three times as long as a 1004, so I should probably charge three times as much. I don't. I just charge twice as much and rarely have to do one.