More AMC and PDC Bull

[J Grant]

AI Overview



The cost-plus model in
appraisal management separates the fee paid to the appraiser from the fee paid to the Appraisal Management Company (AMC). The lender pays the appraiser their full, customary fee for the report, while paying the AMC a separate, additional fee for administrative management services, ensuring higher appraiser pay and improved quality.
orking RE Magazine +2
How It Works:

• Transparency: Unlike the traditional "bundled" model, the lender—and often the borrower—knows exactly how much the appraiser is receiving.
• Separate Invoicing: The appraiser submits a "full fee" invoice to the AMC, who then passes that cost directly to the lender, adding their own management fee on top.
• Appraiser Compensation: Appraisers are not subject to the "race to the bottom" fee bidding, allowing for fair compensation and higher quality reports.
• Lender/AMC Relationship: Lenders often select their own panel of appraisers, and the AMC manages the logistics (scheduling, quality control, delivery) for a flat management fee.
  orking RE Magazine +3

Key Advantages:

• For Appraisers: Higher fees (full compensation) and better working relationships.
• For Lenders: Higher quality appraisals and greater assurance of compliance with "customary and reasonable" fee regulations (like Dodd-Frank).
• For AMCs: A transparent business model that attracts exp

 

[J Grant]

That pesky principle of substitution must just be another manifestation of the Patriarchy and White Supremacy.

Another example of your gaslighting the topic trhough ridicule.

The AMC example is specific to the industry via the extreme supply/demand imbalance due to the narrow demand point of AMCls with volume, coupled with the unique form of compensation to the AMC coming from the fee split bundle on the HUD - a form of govt welfare to lenders - I thought you were against that sort of thing.

 

[George Hatch]

Gaslighting, huh? Seriously?

Why can't appraisers get the fees they want? Because the lenders and their pet AMCs can readily find (what they consider) a substitute who will do it for less. Because they have choice, because they have weighed and measured those choices and because they have the right and the ability to exercise those choices. Same as applies to their migration toward using more waivers and hybrids.

That's what you are complaining about. The lenders have choices, to which you and a lot of other appraisers object. You prefer they not have some of those choices.

Now don't do another JGrant reimagination on this. If the lender's choices and prerogatives were further infringed it would not bother me one little bit. Preferably as a means to inhibit or correct a known and quatified loss factor - the identification of which has so far eluded all attempts. But even if it was arbitrary and solely aimed at improving the economic well being of fee appraisers to the exclusion of all other parties in these transactions I would be perfectly fine with that. I WANT you to win, even if at the expense of everyone else. I just don't foresee that happening in the foreseeable future.

 

[J Grant]

Gaslighting, huh? Seriously?

Why can't appraisers get the fees they want? Because the lenders and their pet AMCs can readily find (what they consider) a substitute who will do it for less. Because they have choice, because they have weighed and measured those choices and because they have the right and the ability to exercise those choices. Same as applies to their migration toward using more waivers and hybrids.

That's what you are complaining about. The lenders have choices, to which you and a lot of other appraisers object. You prefer they not have some of those choices.

Now don't do another JGrant reimagination on this. If the lender's choices and prerogatives were further infringed it would not bother me one little bit. Preferably as a means to inhibit or correct a known and quatified loss factor - the identification of which has so far eluded all attempts. But even if it was arbitrary and solely aimed at improving the economic well being of fee appraisers to the exclusion of all other parties in these transactions I would be perfectly fine with that. I WANT you to win, even if at the expense of everyone else. I just don't foresee that happening in the foreseeable future.

The lenders could still have choices - to use an AMC, but the lender would have to pay that AMC a cost, rather than the cost be borne by the appraiser via a fee split.

Suddenly, the lenders would choose a whole lot differently if THEY, the lender, had to pay a cost for AMC service, which would put the AMC on an equal footing with every other business out there that charges their customers a cost for the service or product they sell.

Probably the lender could pass on the separate cost to the consumer anyway, but the lender would rather not , and continue to enjoy the govt perk of free of cost to them , or cash back to them if that is the additional perk we are not made aware of.

 

[George Hatch]

The lenders could still have choices - to use an AMC, but the lender would have to pay that AMC a cost, rather than the cost be borne by the appraiser via a fee split.

Suddenly, the lenders would choose a whole lot differently if THEY, the lender, had to pay a cost for AMC service, which would put the AMC on an equal footing with every other business out there that charges their customers a cost for the service or product they sell.

Probably the lender could pass on the separate cost to the consumer anyway, but the lender would rather not , and continue to enjoy the govt perk of free of cost to them , or cash back to them if that is the additional perk we are not made aware of.

But the choices they have would not include the current form of bundled fees. Right? So this is still an example of you wanting to further limit their discretion, their choices, their preferences.

BTW, the appraisers aren't paying the AMC fees. You should stop using that FuzzyMath untruth in your talking points. You bid a fee, you get a fee. You pay them nothing our of your fee. (upload fees or such being the possible exception)

 

[J Grant]

Gaslighting, huh? Seriously?

Why can't appraisers get the fees they want? Because the lenders and their pet AMCs can readily find (what they consider) a substitute who will do it for less. Because they have choice, because they have weighed and measured those choices and because they have the right and the ability to exercise those choices. Same as applies to their migration toward using more waivers and hybrids.

That's what you are complaining about. The lenders have choices, to which you and a lot of other appraisers object. You prefer they not have some of those choices.

Now don't do another JGrant reimagination on this. If the lender's choices and prerogatives were further infringed it would not bother me one little bit. Preferably as a means to inhibit or correct a known and quatified loss factor - the identification of which has so far eluded all attempts. But even if it was arbitrary and solely aimed at improving the economic well being of fee appraisers to the exclusion of all other parties in these transactions I would be perfectly fine with that. I WANT you to win, even if at the expense of everyone else. I just don't foresee that happening in the foreseeable future.

If you want us to win, it would be helfptul to support the appraisers position instead of defending the status quo.

wRt principe of substitution, this is a professional service, not picking sneakers on Amazon. There are a limited number of appraisers in a given region and a limited number of buyers for their work in the regulated lending end. That limited number of buyers in the AMC realm are not retail end user buyers shopping for appraisers by quality and reasonable cost, they are wholesale level shopping for the cheapest, which is not disclosed to the borrower customer, or to the later loan investor.

Normal supply and demand principle of substitution is not operable in the specific context of the AMC system, and it cheats borrowers of the service of capable area appraisers who are "substituted" with less competent or inexperienced if that choice profits the AMC more.

 

[J Grant]

But the choices they have would not include the current form of bundled fees. Right? So this is still an example of you wanting to further limit their discretion, their choices, their preferences.

BTW, the appraisers aren't paying the AMC fees. You should stop using that FuzzyMath untruth in your talking points. You bid a fee, you get a fee. you pay nothing our of your fee.

That is correct, I want to stop the bundled fee split that allows the AMC to take huge chunks of the borrower-paid appraisal fee, instead of the lender paying a cost for an AMC service, which benefits the lender, the way other businesses operate. Your defending what amounts to government welfare to the lender and AMC via a HUD fee split seems contrary to your free market stance.

If the fee split went away ( or was capped ) and it was free market, if the services of the AMC are so awesome, then lenders would be lining up to pay them A cost of $200 and mroe an order. You and I know that won't happen, which is why the lenders and AMC fight tooth and nail to keep their govt perk protecting them against the free market here.

The appraiser is compensating the AMC. That is the language I use because it is true. The compensation to the AMC comes from taking a chunk of the borroer paid fee for the appraisal and keeping it. That fee split lowers the amount $ to the appraiser, so the appraiser is effectively paying the AMC. No fuzzy math involved. The appraisal fee was covered by the borrower, and the lender might send that fee to the AMC, but the lender paid nothing, as in zero $ of their own funds, as a cost for the AMC service.

BTW, if you think this is funny, I estimated that an average appraiser, doing 5 a week for AMC's of regular orders, has lost an estimated $400,000 in income over 10 years due to the AMC being compensated from the fee split. That $400,000 could buy a house, pay for retirement, ensure the future of offspring etc. And that is a very conservative average of loss. Which is why almost nobody is entering the field despite PAREA and the lowering of the education barrier.

 

[George Hatch]

If you want us to win, it would be helfptul to support the appraisers position instead of defending the status quo.

wRt principe of substitution, this is a professional service, not picking sneakers on Amazon. There are a limited number of appraisers in a given region and a limited number of buyers for their work in the regulated lending end. That limited number of buyers in the AMC realm are not retail end user buyers shopping for appraisers by quality and reasonable cost, they are wholesale level shopping for the cheapest, which is not disclosed to the borrower customer, or to the later loan investor.

Normal supply and demand principle of substitution is not operable in the specific context of the AMC system, and it cheats borrowers of the service of capable area appraisers who are "substituted" with less competent or inexperienced if that choice profits the AMC more.

Ah, another day, another attempt at tone policing. Typical

If by "supporting the appraiser's position" you are preferring that I engage or condone or agree with the untruths and fallacies and illogic of some of these talking points then I'm not doing that and neither should you. As far as I'm concerned, YOU should be apologizing for the errors you make.

I might engage in an unconditional relationship with my wife in exchange for her favors, but I don't have that kind of relationship with my peers. I'm not lying for them because IMO doing so is counterproductive to the long term interests of the profession as a whole, of which the SFR fee appraisers are but a subset.

 

[OSU Beavers]

Excess profits breed ruinous competition.

 

[George Hatch]

Most everyone here initially got into this business in their pursuit of (what they thought) were some of those profits.