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Loan "Markups": Part II

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Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Right back to 'buyer beware'.

I keep remembering the classic:

"There's a sucker born every minute"
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
It does all hang on their concept of the "guaranteed settlement cost package" to the applicant. So long as the borrower/applicant is quoted "final" numbers of interest rate and then closing costs, and they ACCEPT that quoted package number, then whatever else happens behind the scenes with mark-ups and over-charges and bonuses is off-the-table, so to speak. The borrower will not have any leverage to disagree with their practices later on. So, who's left to disagree with what's going on ? ....the lenders, their lawyers and those who right the rules. Where do we fit in ? We are simply insisting that we get the $300, $350, $400 respective of the work we might do. "They" want us to accept $150, $200, $250 so that when the borrower sees the appraisal fee on the laundry list of closing costs that number may not seen too high to them (borrower), and as such, raise no questions. When we do not agree to the un-fair fee for our service....they willingly go to the appraiser who will do it for cheap, or use an alternative "valuation" product sourced from an ever-growing pool of available options. What the borrower assumes, and may never know, is that the alternative valuation product may be quite detrimental in that it has provided no protection at all. We have all had situations through the years when a certain client may express as subtly, yet emphatically as possible, that we should not discuss OUR fee (from lender) with the homeowner. I've often wondered why some clients will get so bent-out-of-shape when we propose receiving c.o.d. from a homeowner. No doubt, it rocks the entire boat with respect to money already collected from them, or that in our mention of it to the h/o the secret about overcharges has a chance of surfacing. Of course, we are just one little cog in the big wheel.....and yet it can be so plainly evident that our cog is rendered being of such minimal significance. .....As we start another week in paradise.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Folks:

Here again there is a clear need for cohesive marketing to the public to raise awareness. HUD couldn't run it through but what if WE, HUD, the AI, NAIFA, Rural And Farm Appraisers and most of us got behind a program and PUSHED????

I think AVMs are inappropriate in many cases, but that they DO work in others ( 8O don't hurt me). But the consumer of that service should absolutely NOT be billed 'as if' an appraiser were involved. Fair fees = fine, non-disclosure = NOT fine by me!

I am talking with some other folks about an idea one of our forumites had to provide funding for an educational program..... look for something in the near future.

And please, give some consideration to the need for a CHOHESIVE NATIONAL Non-Designation-specific Appraiser marketing and information group which just might DO something about this issue :evil:
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
Markups should be made illegal to protect the consumer (a.k.a. average Joe, tax payer).

When someone providing a service (especially such a needed and important service) is allowed to 'markup' a product is translates to; higher fees and diminished service EVERYTIME!!!

If allowed to, the lender will shop for the lowest possible fee which is usually offered by the sweat shops (except in this case where they didn't even bother with an appraiser). Allowing this to happen is almost as rediculous as allowing a lender to 'choose' their appraiser without any risks. It smells of politics, and goes one step further to endanger our economy.

-Mike
 

Rob Bodkin

Junior Member
Joined
Nov 9, 2002
Professional Status
Certified Residential Appraiser
State
Washington
I think that this issue could be cured simply, quickly and finally. In a word

DISCLOSURE.

When the Lender or broker has to disclose any and all mark-ups, then they will quickly stop doing it. Frankly if I charge zzz.XX and the lender adds another $100 I could care less, as long as the borrower gets full disclosure. How is a lender/broker going to be able to spin the "add-on"? You would not have to be the sharpest pencil in the box to question if there was any value in the additional fee.

It's kinda like a "second sticker" on the car lot. That's all fluff and profit, but they have to disclose it.

Rob Bodkin
Freestone Partners
 
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