The Appraiser Shortage Myth Part 43

[Evincere]

And therein lies the rub!


When you're dealing with hundreds or even thousands of orders per week, and each appraiser on EACH order may have a different fee (even within the same market - I know my fee isn't the same as my competition) I guess that could make it a problem for TRID rules/regs ...

You set your fee, you review the order and decide if the fee being offered is appropriate. Accept, decline or request an increase. Or do you fret, worry or vet your fees against another for a difference of a few dollars. How many are working for AMCs right now who pretty much offer a standard, consistent acceptable fee. Which may differ from the guy down the street but still be considered their sufficient C&R?

 

[Evincere]

duplicated deleted

 

[Terrel L. Shields]

they are paying each appraiser "their fee."

Not the appraisers fee. Is desperation coming to SL and their ilk? I mean why blast me? I've never been on their list, never been contacted by them before. How did they even contact me except a blind search of the Roster? And for a job 90+ miles away in a different market? For some of us "our fee" is far higher than their willingness to pay. We, by refusing AMC work, bypassed the constraint of TRID, which honestly isn't difficult for most in-house banks, why so for Fannie? Sign loan papers some time. Half are disclosures and "voluntary" waivers.

 

[J Grant]

Nailed it.

Technically, it can be done but I have yet to meet a lender who wants to do that as often as cost plus would require when the system they have now works for them (at least with regard to disclosure)

Thank you for the honest response. Or course it could be done, ( technically and in reality) Surely it would not be that difficult. The reality is that the system now works for lenders, but it is not working for appraisers.

How many lenders own stock in AMC's or own an AMC as an affiliated division? I assume AMC profitability per order would be adversely affected by cost plus. Or are lenders now with current system, , able to retain some of the fee split now as a portion if they claim they also perform a management function? I am trying to figure out what reasons lenders have to be so resistant to cost plus if all it is is about disclosure.

 

[Eli]

The attorney general of LA may change it, at least within their boundaries. They have laid the ground work. It took them many years. The FTC will get an ear full.

I'm sure the securities and exchange commission is paying close attention too.

 

[Evincere]

Read Evincere's post, # 257, who has direct experience working with an AMC, and Evincere understands the problem as I do. if AMC and appraisal management fees are both considered a single cost under TRID, there is nothing stopping as you say, from separating the two out, at time of application, as to what segment is going where. Evincere explains how it works ( similar to my call in above post for a flat fee)

I assume lenders could opt to pay for AMC service out of their pocket, there is no requirement for them to pass it on as a charge to the consumer? ( I know they are not lining up for that to happen, just saying)

People wanting separation of Appraisal vs AMC fee on closing statement are demanding it out of futility, frustration and righteous indignation so that all the world including the Borrower can see how much AMCs are ripping them off for. When the Borrower is at the table - it's too late. All they want is the key to their new property. And yes, it could be an accounting nightmare, especially when there is no SLA between the Lender and AMC determining specific amounts or percentages awarded to the AMC for their services.
.

 

[Michigan CG]

What kind of rocket surgery challenge would it be under TRID? Lenders disclose the appraisal fee to consumer, and disclose the management fee to the AMC to the consumer.

If it were that easy many would have done it already.

Have you ever actually talked to people in a lending department? In the world of AMCs most appraisers haven't talked to their actual customers in a long time. I have a couple I talk to on a regular basis and they HATE TRID. The paperwork is overwhelming, but hey, some love that onerous bill passed by the past administration.

 

[bnmappraisal]

In fact AMC's used to do have lists of the fees they pay in an area

But when appraisers set their fees - as DWiley often states on here, and again, I can confirm from first hand contacts - this argument doesn't apply.

I think more and more AMCs are pulling away from setting fees. IMO, just as many are heading toward bids for assignments. We (RES world) see more and more "fee and turn time" emails instead of "we have XX property for YY dollars"

 

[Michigan CG]

Please do a little research on the zero-tolerance requirement and how the regulated institutions are taking steps to ensure they never (in deed or in perception) cross that line.

Research? Surely you jest, uninformed arguments are so much more fun (and a waste of time).

 

[hastalavista]

Read Evincere's post, # 257, who has direct experience working with an AMC, and Evincere understands the problem as I do. if AMC and appraisal management fees are both considered a single cost under TRID, there is nothing stopping as you say, from separating the two out, at time of application, as to what segment is going where. Evincere explains how it works ( similar to my call in above post for a flat fee)

I assume lenders could opt to pay for AMC service out of their pocket, there is no requirement for them to pass it on as a charge to the consumer? ( I know they are not lining up for that to happen, just saying)

I read it. And I don't dispute what s/he is reporting ($450 SLA, $350 must go to the appraiser).
But riddle me this... What happens if the AMC cannot fill the assignment at $350? What happens if it must pay $400? Not the appraiser's problem, you may think, and you'd be right. Except that if the AMC in question has other clients who do not set the minimum fee to be paid, then they will be under pressure to squeeze out the margin from those other clients' assignments. And, the AMC may decide to dump the client (that happens, BTW, despite the order volume); then, the client tries another AMC until the same scenario occurs. That isn't a sustainable solution and doesn't address the problem.

The one example isn't a solution to a systemic problem.
For cost-plus to have a chance at being adopted, appraisal fees have to be removed from the no tolerance bucket. We are talking about the current regulatory environment scheme.

But, I've posted enough. Gnashing teeth and wailing at the AMCs is a waste of time because that is not where the issue is in regard to the cost-plus model.