The Appraiser Shortage Myth Part 43

[Eli]

no fee split by whom? Sorry, I don't know what you mean. In my experience at an AMC (and from friends still there) The AMC gets $zzz from the lender, out of that they pay the appraiser $YYY. Is that the fee split you mean?

That makes sense. Thanks.

You know my stance goes back to the borrower and public. An appraisal fee disclosed should be for an appraisal and a licensed professional. Not a partner. Lol

 

[Eli]

What is that old saying? With friends like you (partners), who needs enemies? Lol

 

[bnmappraisal]

I still believe the fees should be split out for the borrowers. I know many disagree with that, but I still think it should be so.
Total Appraisal Fee: $500 = Appraiser's Fee: $400 and AMC Fee: $100

 

[J Grant]

It really does cost them though unless all appraisers are doing demonstration quality. It costs somebody like the bailout.

I don't believe, and most don't believe that an appraisal has to be demonstration quality to be a well developed, reliable/credible appraisal. A demo quality appraisal is overkill for most purposes. On the other hand, the rote generic, canned comment, rushed appraisal may not be a good standard of credible or reliable under more scrutiny - but it does not get that scrutiny , just needs to pass a computer scrub portal or non checklist "review" for compliance.

 

[Eli]

I don't believe, and most don't believe that an appraisal has to be demonstration quality to be a well developed, reliable/credible appraisal. A demo quality appraisal is overkill for most purposes. On the other hand, the rote generic, canned comment, rushed appraisal may not be a good standard of credible or reliable under more scrutiny - but it does not get that scrutiny , just needs to pass a computer scrub portal or non checklist "review" for compliance.

Yes but trace it back to public trust and market structure. See, LA will shed light on Antitrust and the FTC knows that.

The securities and exchange commission may break in too!

 

[J Grant]

I still believe the fees should be split out for the borrowers. I know many disagree with that, but I still think it should be so.
Total Appraisal Fee: $500 = Appraiser's Fee: $400 and AMC Fee: $100

I agree, but it should be done upfront ( when borrower writes the check) not only at the end ( disclosed on appraisal) .AND the impact on appraiser selection (emailing bids out, choosing lower fee tier appraiser ) should be disclosed up front to the borrower. (I know that is a pipe dream but that would be true transparency)

BTW, the split you mentioned is reasonable...more typical can be $500 total fee, $200 to AMC, $300 to appraiser- at least in my area from what AMC's pay. ( and they can pay less than that)

A way to correct the situation of high $ charges going to an AMC for their management service, ( $500 total borrower fee, with $225 to AMC and $275 to appraiser), due to the potential for excess AMC charges which bloats the fee and ends up with reduced $ going the appraiser, with consequence of conflict of interest to choose appraiser ( and consequence of appraiser attrition)., the percent an AMC can charge as a percent off borrower paid should be capped ( max 25% for example).

If an AMC wants more profit and lender agrees to pay it, fine. The lender can pay the AMC additional $ over the capped percent AMC gets from the borrower fee.

Any of the reforms/ideas posted can work well with TRID. Using TRID is just the latest excuse- what was the excuse before TRID? And if TRID were to be struck down, they'd come up with another excuse ( the excuse now for paying below C and R is "we are paying the appraiser "their" fee. )The AMC's have plenty of $ ( thanks to us) to retain legal departments to examine policies and regulations for grey areas of compliance to allow them to operate as they do.

 

[Evincere]

The AMC gets $zzz from the lender, out of that they pay the appraiser $YYY. Is that the fee split you mean?

Most, will collect the Appraisal fee from the Borrower after the Lender sends the order over. Usually, the collection is done via Credit card. AMCs as a general rule do not wait for payment from the Lender/Client - they have the fee in hand before placing the order with the Appraiser.

 

[djd09]

If you keep AMC model alive, then you get what you deserve.

 

[bnmappraisal]

I think this borrower's circumstances are relevant to this thread and the "myth" out there (from another thread)

https://appraisersforum.com/forums/threads/cant-get-an-appraiser.217758/

 

[Terrel L. Shields]

other factor that no one has mentioned is that AMC are significantly less costly for lenders than maintaining their own appraisal department.

Ordering departments are cheaper than either one. That was why the largest regional in my state turned AMCs down years ago. This bank has since adopted a system hybrid. They order from their credit dept for commercial ag, they use a portal for secondary market, & have a staff of reviewers & evaluators to handle review and eval's