New Wisconsin Appraiser Cooperative AMC

[mary jane muth]

Fellow appraisers
We are in challenging professional times in which many of our professional partners are attempting to share part of your hard earned fees. Conventional orders via the AMC’s continue to expect unrealistic turn times and pressure for values. And with FHA on the horizon ready to implement similar policies as of January 1st 2010, “What is an appraiser to do?”
A local group of appraisers in Metro Milwaukee are currently in the process of creating an Appraisal Management Cooperative. This would be in the legal format of an LLC, with Ownership and profit distribution based on orders that you have performed. In short, you would not give up any of your business but you would participate in the cooperative proportional to the amount of your appraisals.
We have checked with the Appraisal Institute practices department with this proposed structure. The Institute maintains that there are no issues in USPAP that would present conflicts. We are currently requesting a position statement from Wisconsin DRL on this type AMC structure. The DRL has given initial indications that there are no problems with this type of ownership simultaneously to the cooperative members in performance of appraisal reports.
IF you are interested in becoming part of this cooperative, please email us at mjm@mjmappraisals.com
We would appreciate your reply no later than 11/7/2009.
Your participation in this proposed venture in no way limits your abilities to work with other AMC’s which you are currently receiving orders. This practice will serve to enhance and control your business.
Thank you to your prompt attention to this matter.
Mary Jane Muth
414-483-9300
mjm@mjmappraisals.com

 

[Green Hornet]

Fellow appraisers
We are in challenging professional times in which many of our professional partners are attempting to share part of your hard earned fees. Conventional orders via the AMC’s continue to expect unrealistic turn times and pressure for values. And with FHA on the horizon ready to implement similar policies as of January 1st 2010, “What is an appraiser to do?”
A local group of appraisers in Metro Milwaukee are currently in the process of creating an Appraisal Management Cooperative. This would be in the legal format of an LLC, with Ownership and profit distribution based on orders that you have performed. In short, you would not give up any of your business but you would participate in the cooperative proportional to the amount of your appraisals.
We have checked with the Appraisal Institute practices department with this proposed structure. The Institute maintains that there are no issues in USPAP that would present conflicts. We are currently requesting a position statement from Wisconsin DRL on this type AMC structure. The DRL has given initial indications that there are no problems with this type of ownership simultaneously to the cooperative members in performance of appraisal reports.
IF you are interested in becoming part of this cooperative, please email us at mjm@mjmappraisals.com
We would appreciate your reply no later than 11/7/2009.
Your participation in this proposed venture in no way limits your abilities to work with other AMC’s which you are currently receiving orders. This practice will serve to enhance and control your business.
Thank you to your prompt attention to this matter.
Mary Jane Muth
414-483-9300
mjm@mjmappraisals.com

mjm,

Without passing judgement...why only 8 days for comment? What is the rush and the reason for the cut off date? Is there a place to read the details? If it looks good , the maybe a possibilty in my state, but... the devil is in the details.

 

[mary jane muth]

Absolutly correct-a statement that I use daily...detail is always in the details...

Our goal is to get appraiser information, organization structure and website in place long before Jan 1st so that our members may give lenders a better option than allowing AMC's to have windfall profits at our expense.

We are trying to get some feedback from FHA about direction on structure and alternative billing practice. We strongly feel that the only way to get in front of this problem is get huge numbers of appraisers envolved. That will be like hearding cats

mjm

 

[Esox]

When you say lenders do you mean mortgage brokers? Is this being set up to give your current mortgage broker clients that can still order an FHA appraisal an option after 1/1/10 when they lose that ability? The timing of your effort to organize would indicate to me you're trying to salvage FHA mortgage broker business. If so, what if an appraiser that has no mortgage broker clients were to join your cooperative? Would that allow such an appraiser a chance at MB FHA business on some sort of rotational basis? Maybe I'm dense, but you're initial post seems a little vague about what you're trying to accomplish and what type of clients you're targeting.

Kevin

 

[mary jane muth]

Kevin

I am not sure where the word lender appears in the initial post?

The purpose of this cooperative is to have a AMC entity in place to handle both conventional and FHA reports. It is clear from the new FHA guidelines that mortgage brokers can not order reports however it is not clear if either lenders or FHA will require a rotation. Should that be the case, lenders have more options. There are still local funding lending businesses that are local open to installing non-national AMC's. The other option of course is that this could be an option for large and small lenders for FHA orders. And certainly is the proposed sunset of HVCC occurs, it will serve as a local alternative for national lenders who want to continue with maintaining independant appraisers exclusive of the nation AMC.

There is enormous value in very large groups of appraisers banding together and sharing common goals. We need to speak with one voice in order to control of future. The reason we are in the postion we are in is because the national AMC's have convinced lenders they are providing services not required by HVCC. The joke is that these AMC's have actually slowed down the process, creating more issues with false issues of review (not done by appraisers and from 10 states away and finally created suedo needs for half of our fees.

As far as the business available. Member Appraisers in the cooperative could provide our AMC as an alternative to any lender/clients who are unsatified with current AMC, FHA lenders/clients based on how Lenders develop internal policy and interpret how to manage FHA orders after 1/1/2010. The details of FHA rotation with lenders is rather vague. In short, our coopertive/AMC simply is a struture which could slowly provide better service at lower costs to the lender/borrower and yield the members higher fees. This is because the entity is not seeking a corporate profit


hope that helps....Are you in Wisconsin

 

[Esox]

The word lenders was in your second post. It seems curious to me that your plans for a cooperative appear shortly after the announcement that FHA will no longer allow mortgage brokers to order appraisals. The HVCC has been in place longer than that, so I guess I wonder why your cooperative was not started sooner. You say "we" a number of times in your posts. Are you forming your cooperative with other WI appraisers? Could you give me a rough estimate of how many appraisers/appraisal firms you have interested or involved?

I have been appraising in WI for 20 years, specifically within your marketplace, though your website indicates your firm covers a greater territory than I. How many appraiser's in your firm, Mary Jane, if you don't mind my asking? Do you have trainees?

At present, all my clients directly engage appraisers using HVCC compliant systems. I wouldn't work for an AMC, at least under the fee and turn time conditions most set forth. I notice your website stresses fast turn times and competitive fees, I don't generally market myself in such a manner, so I would be concerned that your cooperative/AMC may be run in a manner typical to existing AMCs.

Do you have an idea how you would handle ordering and assigning of work? Do you have software in place to be a viable AMC/cooperative? What are your plans regarding marketing?

I understand you may not be willing to answer these questions in a public forum, and I ask you forgive my skepticism upon reading your posts. They strike me as similar to many I read here that trumpet that we need to do something, we need to band together, etc.

Kevin