No College Degree for Cert Generals or Residential Appraisers

[J Grant]

Even if we want to say those are the only significant participants the point remains they are competitors with each other. They're competing for the same accounts. In the Lender/AMC relationships it is the lenders who do the buying, not the AMCs.

There is not one AMC-using lender that couldn't convert to a cost-plus scheme. Today, if they wanted to. If (for example) Solidify wouldn't do it then one or more of the others most certainly would do it, like ServiceLink. And if Servicelink did go to Cost-Plus they would most likely continue to shop appraisers by fee because if ServiceLink didn't offer their lenders the combo their competitors would step in to do it instead.

That is why the "combo" of bundled fee must be changed on the regulatory side if the fee predation by AMCs is to be addressed.

The AMCs;s do not compete with each other the way normal businesses do, since typically none of the AMCs charge a hard cost to the lender. The lender in fact, does not benefit when an appraiser on the AMC panel is paid less. The lender passes the borrower-paid fee or an agreed-upon amount ( if the lender takes anyting off the top ) to the AMC regardless of what the appraiser is paid. The AMC's drive down appraiser fees not to compete for lender customers, the AMC's drive down appraiser fees because they are compensated from those fees and the less an appraiser gets, the more the AMC gets.

 

[George Hatch]

Yeah, I've been agreeing with you for years about that - only the govt can suppress how the lenders operate.

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Meanwhile as to the idea that those lenders don't care how much it costs.....
I strongly doubt you can you can find a single AMC worker who doesn't think their company competes for business. I also doubt you can find a lender who doesn't think they compete with each other for business.

The validity of your talking point (they don't compete with each other) would hinge on a scenario where the majority of them do "not compete". I doubt you could find even one, let alone a 50% majority.

 

[J Grant]

Yeah, I've been agreeing with you for years about that - only the govt can suppress how the lenders operate.

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Meanwhile as to the idea that those lenders don't care how much it costs.....
I strongly doubt you can you can find a single AMC worker who doesn't think their company competes for business. I also doubt you can find a lender who doesn't think they compete with each other for business.

The validity of your talking point (they don't compete with each other) would hinge on a scenario where the majority of them do "not compete". I doubt you could find even one, let alone a 50% majority.

What i said was this : they compete with each other, but not in the way that normal businesses do. The typical arrangement is that a lender DOES NOT PAY A HARD COST FOR AMC Service, so they comete on turn time and quality and perhaps what set amount the lender will pay for the total - whether the lender passes on the full amount the borrower paid for the appraisal or takes something off the top or gets a profit share portion from an AMC - who knows. It is a non disclsoure by design . The few states that require the fee breakout on the appraisal show something like like borrower paid appraisl fee $500 AMC fee $200 and appraiser fee $300 (for example )

However, when the AMC gets ther pass through payment of the appraisal fee from the lender - lets say $500 per report, the AMC then has incentive to shop for the lowest appraiser fee. If an appraiser bids or states their fee is $300 they will get the order over the appraiser bid/fee of $350 becaue the AMC made more from the cheaper fee appraiser. This is why the system is so relentless in dirivn fees down. The normal customer , incluidng direct orcer lenders ( meaning they do not use an AMC ) shops for reasxonable clost ( C and R), whears the AMC shops the appraiser fee as means for profit as their compensation. Whether any of that profit is further kicked back to a lender customer, I have no idea.

 

[Surf Cat]

Don't forget, some of the LENDERS chose not to operate through AMCs.

Okay.... but below are the top lenders Nationwide providing "most" of the work.

Rocket Mortgage: We work with an independent, third-party appraisal management company to order the appraisal for you.

United Wholesale Mortgage (UWM): United Wholesale Mortgage does not mandate the use of any specific appraisal management company (AMC), as it offers an in-house appraisal service called UWM Appraisal Direct, which allows brokers to bypass AMCs entirely.

Bank of America: United States
Bank of America uses multiple appraisal management companies (AMCs) to handle appraisal orders, with Solidifi and ServiceLink being specifically mentioned by appraisers as current providers for residential work. Additionally, the bank has historically used other AMCs, including LandSafe, which was sold by Bank of America to CoreLogic in 2015.

JPMorgan Chase: An alarming precedent has just been set for real estate appraisers in the bankruptcy case of Evaluation Solutions/ES Appraisal Services (ESA). Despite numerous objections from appraisers and agent/brokers alike, a Florida bankruptcy judge has ruled in favor of JPMorgan Chase in granting a Bar Order which absolves Chase of any liability on future claims from appraisers, agents, and brokers for unpaid fees for valuation services that were delivered to Chase through ESA. Opps...

Wells Fargo: Wells Fargo has used multiple appraisal management companies (AMCs) over time, with its primary AMC being RELS, which was jointly owned by CoreLogic and Wells Fargo before CoreLogic acquired full ownership in 2016.
Following this acquisition, Wells Fargo transitioned to using Appraisal Port, a platform owned by FNC, which was acquired by CoreLogic.
As of recent reports, Wells Fargo has also been building its own internal appraisal panel and has stopped using third-party AMCs in some capacities.
Additionally, Wells Fargo has been associated with other entities such as Mercury Network, which was acquired by CoreLogic, further linking the bank to CoreLogic's broader network.

In regards to my bold above, while AMCs may have staff who are appraisers, the regulatory definition and intent emphasize that the core function of an AMC is to manage a panel of independent contractors, not to perform appraisals through its own employees. This separation is critical to maintaining appraiser independence and compliance with federal regulations.

Well.... so much for federal regulations. Let the AMC grift continue....

 

[J Grant]

To clarify, post HVCC it is not simply that the demand narrowed from 5000 individual loan officers ordering to 200 AMCs ordering a large portion of the volume. The difference is the AMC;s were not simply shopping by cost, they were shopping by profit back to themselves since their compensation comes from how little they can pay an appraiser.

That is a stark difference to how mortgage brokers or direct order lenders shop, which is by C and R fee, since the lender is not keeping a split as profit ( since they are not a third party). Even the worst of the mortgage brokers pre-HVCC did not keep a portion of the appraisal fee.

The above figures are for example purposes. I am aware that a portion of loans are ordered by lenders or wholesalers with no AMC , but the discussion centers on AMC's on these posts.

 

[glenn walker]

What i said was this : they compete with each other, but not in the way that normal businesses do. The typical arrangement is that a lender DOES NOT PAY A HARD COST FOR AMC Service, so they compete on turn time and quality and perhaps what set amount the lender will pay for the total - whether the lender passes on the full amount the borrower paid for the appraisal or takes something off the top or gets a profit share portion from an AMC - who knows. It is a non disclsoure by design . The few states that require the fee breakout on the appraisal show something like like borrower paid appraisl fee $500 AMC fee $200 and appraiser fee $300 (for example )

However, when the AMC gets ther pass through payment of the appraisal fee from the lender - lets say $500 per report, the AMC then has incentive to shop for the lowest appraiser fee. If an appraiser bids or states their fee is $300 they will get the order over the appraiser bid/fee of $350 becaue the AMC made more from the cheaper fee appraiser. This is why the system is so relentless in dirivn fees down. The normal customer , incluidng direct orcer lenders ( meaning they do not use an AMC ) shops for reasxonable clost ( C and R), whears the AMC shops the appraiser fee as means for profit as their compensation. Whether any of that profit is further kicked back to a lender customer, I have no idea.

Normal business has always been to undercut your competitors by price and that's true of AMCs to. The appraisers were price fixing for years by telling lenders their Standard Fee was $$ say Example $450.00.

In about 1990 most in my area charged $275 and we went out and solicited the mortgage brokers with $225.00 fees and in 6 months put 4 or 5 old timers out of business.

That's why we also never had a standard set fee and negotiated as many as possible. That's no different than today's AMC they compete against eachother every day.

 

[Joe Flacco]

There are only two people we can be mad at.

1) Your competition
2) Yourself

If you look at Angis List, they say the average appraisal fee is $357. That's based on what people using Angis List actually paid. Angis List isn't even an AMC.

That is just what a lot of appraisers charge.

 

[J Grant]

Normal business has always been to undercut your competitors by price and that's true of AMCs to. The appraisers were price fixing for years by telling lenders their Standard Fee was $$ say Example $450.00.

In about 1990 most in my area charged $275 and we went out and solicited the mortgage brokers with $225.00 fees and in 6 months put 4 or 5 old timers out of business.

That's why we also never had a standard set fee and negotiated as many as possible. That's no different than today's AMC they compete against eachother every day.

Your bad then.

I never cut my fee to compete by undercutting, which was $275 in those days. Most appraisers did not need to cut their fees to compete. The mortgage brokers had the borrower pay for the appraisal so unless the mortgage brokers you worked with were crooks and keeping the $50, why did they care?

What you did is on you, becaue appraisers did not have to cut their fee back then to get work. I never had a mortgage broker ask me to lower my fee and I was not desperate or sleazy enough to lower it to get business. (Were your mortgage broker clients keeping the $50 discount ?) Or did their borrowers pay less for an appraisal?

Back then, if a mortgage broker wanted to compete by reducing fees to a borrower, it was common for the mortgage lender as a loss leader (advertise free appraisal! ) and they would cover the cost of an appraisal. No need for the appraiser to lower their meager $275 fee. The mortgage brokers made thousands and tens of thousands of $ per loan and could easily cover it.

Even the worst mortgage brokers back then that I ever dealt with or any of my appraiser colleagues dealt with were not keeping part of an appraisal fee.

The AMC;s do not shop appraisers by price, the AMCs;s shop by which appraiser offers the lowest bid / low fee returns the most profit to the AMC from the split of the lender pass-through payment made by the borrower for the appraisal. A legal form of pay-to-play. The appraiser who offers an AMC the most kickback via the lower fee from the split gets the work.

 

[J Grant]

There are only two people we can be mad at.

1) Your competition
2) Yourself

If you look at Angis List, they say the average appraisal fee is $357. That's based on what people using Angis List actually paid. Angis List isn't even an AMC.

That is just what a lot of appraisers charge.

The stupid, incompetent ones would charge that little as the only way they can get work. I imagine if they charge that to an AMC it seems normal. If college were the entry bar, I doubt we would see it. In my area for private work, appraisers charge C and R- $500 -plus range. Anyone charging that little should have been gone years ago.
Off the small segment of Angis' list orders and back to AMC s which is the main topic.

 

[glenn walker]

If you have staff of say 5 appraisers and an Assistant you often had slow periods where you don't want to lay off anyone and so you adjust your business model to keep them employed.

Some month's we made no money but kept good appraisers on staff. A one person operation can stand harder on fees in slower times but not one with employees. The AMCs are no different they adjusted fees based on how busy or slow they are. A fixed set fee usually results in getting stuck and behind the economy's ups and downs.