PDC + Value Acceptance

[George Hatch]

If there was no split and lenders had to pay for the AMC service as a hard cost, the way the lender pays for IT or accounting, the use of AMC's would disappear overnight.

Do you understand the concept of not having a split, but that the lenders pays a hard cost for the AMC service the way they pay for other services which benefit them ?

Perhaps a lender could pass that cost on to the borrower, or perhaps not, idk, but it would change the payout to appraisers, it would change how AMC's selects the appraiser, and imo it would change how many lenders might choose to use an AMC.

I realize it is doubtful it would happen, but one never knows. Once in a great while, a wrong is corrected. I might not benefit from it, but I'd like to see it happen.

There's no reason to believe that appraisers will get paid any better just because the fees are separated. Especially when the appraiser's end is determined via competition between the appraisers.

Coming to one theoretically possible future near you.

​

AMC Fee - $400​

Appraisal Fee - $100​

 

[djd09]

...it is a good thing they cut the mortgage broker out of the loop so they can estimate value without a license except in marin city hee haw hee haw

 

[J Grant]

At the fees the bottom dwellers are paying, isn’t this more of a hobby?

Who would want to do this as a hobby?
Maybe part-time income - but the bottom dweller fees might not even provide that. The expenses are fixed regardless of the income, and the deadlines and the threat of liability is always there, which takes it out of hobby territory -

Though if one is a masochist, then working for high-pressure, low fee, humiliating working conditions AMC's who will turn you into the state for a small infraction is an amazing opportunity.

 

[J Grant]

If lender direct pays appraiser $400....
And directly pays AMC $50....
Is this a split....

If the lender pays whatever the AMC charge out of the lender's pocket, it is not a split

a split means the AMC gets paid by a split of, or portion of, the appraisal fee , even if the lender cuts the check to the AMC out of it.

 

[ucbruin]

Though if one is a masochist, then working for high-pressure, low fee, humiliating working conditions AMC's who will turn you into the state for a small infraction is an amazing opportunity.

Forumite comments during 2023 seem to reflect the above....

 

[ucbruin]

If the lender pays whatever the AMC charge out of the lender's pocket, it is not a split

a split means the AMC gets paid by a split of, or portion of, the appraisal fee , even if the lender cuts the check to the AMC out of it.

The appraiser receives the full appraisal fee that the borrower paid....

The AMC fee is akin to title, credit check, etc....

 

[J Grant]

There's no reason to believe that appraisers will get paid any better just because the fees are separated. Especially when the appraiser's end is determined via competition between the appraisers.

Coming to one theoretically possible future near you.

​

AMC Fee - $400​

Appraisal Fee - $100​

I believe they would get paid better, and it is a fact now that they do. Appraisers paid directly from a lender get paid typically much better than when an AMC is involved for the same or similar order.

That is because the borrower covers the appraiser's fee, so as long as that fee is within what the lender quotes the borrowers, the lender has no incentive to shop fee competition among appraisers.

Your above fee breakdown where $100 is for the appraisal and $300 to the AMC seems to recognize it is the future ( starting tomorrow) of what the appraisal Fannie/Freddie "Modernization" archives.

Regulators and the general public, what say you, does the "appraisal modernization" seem planned to achieve it? Or is the enrichment of AMC's at the expense of appraisers just a casual coincidence?


WRT to your example, to be a HUD split, it would be an appraisal fee $400, and the payout for the appraisal is $100 from the $400 -Since the borrower makes a check for an appraisal.
So far, borrowers are not writing a check made out to an AMC for AMC service.

 

[Charles West]

One of the ways for appraisers to be respected again would be to follow through with the privatization of the mortgage markets and the FNMA and Freddie behemoths. Private money generally has tighter standards and higher expectations with respect to the quality and quantity of appraisers input if the hard money market is any indicator. Plus it would have the added benefit of more choices for borrowers, more opportunities for good appraisers with good skill sets, and would jump start the paydown of Federal debt by shrinking the length and breath of federal government involvement in the private economy.

 

[J Grant]

One of the ways for appraisers to be respected again would be to follow through with the privatization of the mortgage markets and the FNMA and Freddie behemoths. Private money generally has tighter standards and higher expectations with respect to the quality and quantity of appraisers input if the hard money market is any indicator. Plus it would have the added benefit of more choices for borrowers, more opportunities for good appraisers with good skill sets, and would jump start the paydown of Federal debt by shrinking the length and breath of federal government involvement in the private economy.

Perhaps, but how would appraisers accomplish this?

Ending FF backing would see mortgage rates skyrocket. Private mortgages would never be made at the advantageous rates and terms that taxpayer-backed Fannie and Freddie offer. That is what bothers me about the AMC fee split and enrichment to AMC's from Fannie and Freddie to their crony AMC's in"Modernization"- that it is the taxpayers backing the decimation of the tole of the appraiser

An appraisal product can be replaced by other valuation products, or a chopped up-up fast food version of an appraisal But the appraiser's role is unique, that of a disinterested third party with no vested interest in the outcome. The margination or elimination of the appraiser's role has been in effect ever since the HVCC was corrupted to give AMC control over the selection and it continued with the path FF took to get WAIVERS accepted .(where the mortgage lender estimates the value they need, how ironic since the HVCC was intended to prevent that very thing) The protection of the role of the appraiser would require a true firewall and that is not the AMC model which exists.. Waivers will be renamed value acceptance.

 

[George Hatch]

I've been working off of direct engagement for most of my career and I have always competed by fee. In part, anyway. I have never gotten all the assignments I've bid on, just as my clients have not always gotten the borrowers they have competed for.

Now the marketplace for the assignments I work on is far less efficient than how the AMCs operate so the level of competition I face is much lower than what you face. But the three limiting factors there are that

• These clients are portfolio lenders (it's literally their money that's going out the door) and
• The properties I appraise won't fit an automated underwriting process (my clients have to read the report), and
• "Acceptable substitute" for them means an appraiser they have a personal relationship with, not an otherwise anonymous name on a list

You apparently have the same factors going on with your clients. However, none of those conditions exist at the high volume residential lenders. Your anticipation that it will make a difference to them if the clerk putting the assignment on blast works directly for them or for an outside contractor is ...optimistic.