More AMC and PDC Bull

[glenn walker]

The Lenders don't and never have wanted to pay any appraisers fee's and it's a direct hit to their fees they generate originating loans.

If AMCs were eliminated the lenders would find more ways to eliminate the fee appraisers once and for all that's the ultimate end goal of the Money Center Banks Evaluations will replace most appraisals in the future.

The AMCs are actually extending the Independent fee appraisers lifes because as long as lenders can shove the total management and appraisers costs to borrowers it's not as urgent to eliminate the appraisers for good. Evaluation is the key magic word that replaces the licensed appraisers.

 

[Surf Cat]

I dunno about the cream rising to the top but I think the possibility exists that a lot of appraisers might not like the market's answer to the last part that question.

I'd be completely okay with that. It is what it is..... if my service for a full 1004 in my area is perceived by the market to be worth only between $200 and $300, I know where I stand and can make an informed decision.

But as it stands, it's hidden, bundled. No transparency there. The public trust deal for appraisers and appraisers only, is a fallacy.

 

[JM2187]

Is this really a unique business model? If I have flooring installed directly through a handyman the fee is $X, if I go to Home Depot for the same service, the fee is also $X, not $X + the Home Depot fee. If I buy a t shirt at Target, do they disclose the markup vs me buying it direct from a Chinese website? Nope. Why don't we have the appraiser disclose the fee he/she is paying the trainee while we're at it? Wake up, the fee disclosure is already mandatory for a number of states, the new forms have a specific field for it, which every appraiser will be filling out soon.

The real battle will be with those selling AI generated reports that potentially prove to be better than traditional appraisals, and the end of appraisal fees altogether.

 

[George Hatch]

Jesus. Cost plus is STILL not the same thing as the AMC fee to a alender 100% separate from the appraiser's fee.

The AMC fee is still bundled with the appraiser's fee as the appraisal fee charged to the borrower in a cost-plus.

When an IT professional comes in and services a computer for a lender, does the IT fee impact the appraiser's fee ? No.

Okay, apply that concept to an AMC management charge as a line item cost to the lender. The difference is, that the lender might be able to pass the AMC cost charge on to the borrower as a line item fee on the HUD if it was disclosed in a good faith estimate. Does the fee for title work, a separate line item charge covered by the borrower, affect the appraiser's fee?
No.
That is how a completely separate AMC charge would function.

I qualified that comment with an "even if" at the beginning. It will apply equally with any other scheme we can visualize. Even at the extreme of cost-plus. And I already showed you what the LENDER'S disclosure will look like if/when they do break it down into 2 separate lines.

 

[George Hatch]

By now even you know that nobody here disagrees with or opposes in any way the actual decoupling of the appraiser's fee from the AMC fee. Nobody disagrees with the merits of transparency despite the point that the borrower isn't a party to these contractor and subcontractor relationships.

You need to let go of the idea that the reason there's any disagreement about the effect on the appraiser's fee has nothing to do with the idea that your reasoning is somehow too sophisticated for anyone else to follow. That isn't even a thing, let alone the reason for these disagreements on the effects thereof.

Sometimes a disagreement is just a disagreement.

 

[J Grant]

Is this really a unique business model? If I have flooring installed directly through a handyman the fee is $X, if I go to Home Depot for the same service, the fee is also $X, not $X + the Home Depot fee. If I buy a t shirt at Target, do they disclose the markup vs me buying it direct from a Chinese website? Nope. Why don't we have the appraiser disclose the fee he/she is paying the trainee while we're at it? Wake up, the fee disclosure is already mandatory for a number of states, the new forms have a specific field for it, which every appraiser will be filling out soon.

The real battle will be with those selling AI generated reports that potentially prove to be better than traditional appraisals, and the end of appraisal fees altogether.

Your avatr from an AMC explains your argument wrt a unique business model!

Yes, regulated loans for mortgage lending is a unique business model, because unlike a normal business or consumer transaction, where a customer is free to choose where and from whom they purchase a product or service, the borrower customer of the lender is not allowed to choose the appraiser, and even the loan officer from the lener client can not choose the appraiser. The lender can choose the appraiser if they use a buffer department or a person not associated with the loan outcome, or the lender can outsource appraiser choice to an AMC.

Due to regulations around who can order an appraisal as well as dislosures on the HUD etc - nothing about the appraisal business regarding regulated loans is normal.

So it is not anyting like you or me, picking a handyman or other service provider from Home Depot or a t-shirt at Target.

If AI-generated reports really are "better" than traditional appraisals in the future and traditional appraisals are not used, I imagine the AMCs would end, as would appraisal fees. I doubt that will happen any time soon -jmo.

 

[J Grant]

I qualified that comment with an "even if" at the beginning. It will apply equally with any other scheme we can visualize. Even at the extreme of cost-plus. And I already showed you what the LENDER'S disclosure will look like if/when they do break it down into 2 separate lines.

Of course appraisers fees for their appraisal has to fit into the market, as you observed, the lender is not in the business of profiting from a split of appraisal fees, the lender is in the loan business, thus the lenders benchmark for choosing appraisers relative to their fee is very different from an AMC.

A lender chooses an appraiser for competency and then wants the appraiser fee to be in line with the C and R covered by the borrower. The AMC has a special interest in shopping each appraisal order by fee for the lowest or lower, since the AMC's interest is to mark up the appraiser's fee portion of the split form the appraisal fee as much as possible.

 

[George Hatch]

Your avatr from an AMC explains your argument wrt a unique business model!

Yes, regulated loans for mortgage lending is a unique business model, because unlike a normal business or consumer transaction, where a customer is free to choose where and from whom they purchase a product or service, the borrower customer of the lender is not allowed to choose the appraiser, and even the loan officer from the lener client can not choose the appraiser. The lender can choose the appraiser if they use a buffer department or a person not associated with the loan outcome, or the lender can outsource appraiser choice to an AMC.

Due to regulations around who can order an appraisal as well as dislosures on the HUD etc - nothing about the appraisal business regarding regulated loans is normal.

So it is not anyting like you or me, picking a handyman or other service provider from Home Depot or a t-shirt at Target.

If AI-generated reports really are "better" than traditional appraisals in the future and traditional appraisals are not used, I imagine the AMCs would end, as would appraisal fees. I doubt that will happen any time soon -jmo.

You're "not free" to pick an unlicensed lawyer to represent you in court, not free to pick an unqualified doctor to perform a Lasik on your eyes. The lenders are "not free" to use appraisals they or their agent have not engaged.

 

[George Hatch]

Of course appraisers fees for their appraisal has to fit into the market, as you observed, the lender is not in the business of profiting from a split of appraisal fees, the lender is in the loan business, thus the lenders benchmark for choosing appraisers relative to their fee is very different from an AMC.

A lender chooses an appraiser for competency and then wants the appraiser fee to be in line with the C and R covered by the borrower. The AMC has a special interest in shopping each appraisal order by fee for the lowest or lower, since the AMC's interest is to mark up the appraiser's fee portion of the split form the appraisal fee as much as possible.

The AMCs interests include clearing a profit from their operations but they can't even get the account without first competing for it. Nor can they retain the account without continuing to compete for it on the ongoing basis.

Not to mention your repeated allegations of "unqualified" and "incompetent" in those appraisals even though 90% or more of everyone has been doing most of their work via those conduits.

 

[J Grant]

You're "not free" to pick an unlicensed lawyer to represent you in court, not free to pick an unqualified doctor to perform a Lasik on your eyes. The lenders are "not free" to use appraisals they or their agent have not engaged.

Oh come on...
I know it is Friday, but the issue is not an unlicensed vs licensed lawyer or doctor...I am free to pick licensed lawyers and licensed doctors!! Thus, a licensed doctor or licensed lawyer operates in a free market enviromnent with access to unlimited clients or patients.

But a borrower for a loan is not free to pick a licensed appraiser, and even the loan officer for the lender is not free to pick a licensed appraiser. The licensed appraiser operating within the realm of mortgage lending, therefore, has a limited set of buyers due to these restrictions. Thus, the appraisers for mortage work are not operating in a free market supply and demand system; thus, the C and R ruling made to protect fees - which became corrupted in the second HVCC ruling and thus a fail for the AMC side wrt appraisr fees when bundled with the AMC charge.