The Appraiser Shortage Myth Part 43

[timd354]

I do work with some MBs who originate loans for some of the local banks. However, the appraisers are preapproved by the banks. The situation with MBs has dramatically changed over the past decade; the pressure that existed back then is gone (at least with the MBs I deal with).

There is no doubt that things have changed regarding mortgage brokers as they simply no longer have control over appraiser selection.

 

[The Warrior Monk]

Agreed. Many of those reasons are why I don't work for CC. Fees are borderline C&R but I won't take the risk of getting nagged by some Cali kid. Pass every time.

IMHO, the fees are not even borderline C&R. A big problem with the C&R issue is that apples aren't being compared to apples.

We're a service industry, and we need to charge for services. If an appraiser is paid, say $500, for an appraisal with a 2-week TT, no daily updates and phonecalls, no stips and "revisions" because someone is to lazy to read, etc., that is not the same as $500 being paid by a client that expects responses to blast orders (which takes time and doesn't always result in an order) 48 TTs, endless harassment, more of the appraiser's time after the report is completed, and risk payment. Back when I was actually bidding for AMCs jobs, I considered all of the nonsense that goes along with working for AMCs, and was bidding 50% to 100% more than the problem-free lenders. Obviously I never received any orders (barring 3 high-value assignments from Timberlink back in the day), so I finally stopped bidding.

The appraiser market is essentially bifurcated at this point; those who work with AMCs, and those who don't. And that is a situation the AMCs created of their own doing.

 

[The Warrior Monk]

I just talked to a buddy of mine at Servicelink the other day who confirmed the 48 hr "goal" (not a requirement) and he asked why that was so hard. I told him, if that's the ONLY assignment I was working on, in my market, it wouldn't be too difficult. I'm urban/suburban and 48 hrs after inspect isn't too difficult. The REALITY of it, though, is that I am full time and generally do NOT have just one assignment sitting on my desk. He didn't like that answer, but he's never been on this side of the fence either.

Much of the work at AMCs if form-oriented, and as such are viewed as widgets. Problem is, if they want better appraisers, they have to understand that better appraisers don't just sit around banging out cookie-cutter reports all day long. In the non-AMC world, 5-day TTs are considered a rush..because those clients understand that the appraisers aren't sitting around at their computer screen trying to grab a blast order and run out the door to do that one assignment. For many appraisers that don't do cookie-cutter work, a residential report could easily take 1-3 days to complete. So if an appraiser schedules three appointments in one day, there is no way on God's green earth that all three of those reports can be turned around in 48 hours.

 

[Meandering]

There is no doubt that things have changed regarding mortgage brokers as they simply no longer have control over appraiser selection.

But most of them can "get you approved" if you're an appraiser they want to work with.

It's no big mystery. Search out some mortgage brokers and tell them you'd like to do their work, ask if they can get you approved. Heck, that's how you get on many AMC panels to start with. You get recommended by the LO, who recommends you to the AMC, who then takes half the money to let you work. But you can get to the top of the "approved" list if you make the numbers work all the time. Happy LOs make for happy appraisers. That hasn't changed.

And there is no sense in arguing with me that this is not EXACTLY how it works. Search out some mortgage brokers and loan officers and see for yourselves.

Besides, C&R, AMCs and all that other happy lending crap is only applicable to loans for the brrower's primary dwelling. Not vacation homes, not their investment properties. There are lots of loans that do not fall under the TILA requirements for "appraiser independence".

that is incorrect. there are two methods of determination of C&R.
C&R is a joke. .

What is a joke is that after 7 years appraisers still refuse to read and comprehend a few pages of text.

There are NOT "two methods to determine C&R"

Why Appraisers accept the partial truths of admittedly paid shills, that are collecting good salaries to sit on the internet and tell appraisers how appraisers perceptions are wrong, is just beyond me.

So try reading the few lines underlined in red and tell Denis and Tim to stop posting HALF what the law says.

And stop beliving the shills are telling you the truth, and do the research and verification yourselves.

.

 

[J Grant]

Residential appraisals, just because they are done on a form, are not supposed to be "banged out" , or "cookie cutter"...there is no reason for the 48 hour TT for res reports, other than that the POS AMC;s imposed it, and some appraisers on the hamster in wheel on staff or fee aid yes. Now they all expect it, demand it. TT should be 3-4 days, and many appraisers would turn it in before that, but that's how long it can take to verify, do research, maybe another comp is needed. And of course the 48 hour turn time is absurd if people have more than 1 job at a time ( which most do ).

 

[J Grant]

And you too can complete in the open market. I have about 25 assignments on my desk right now with about 15 being residential, not one of them is from an AMC.

Please stop making your posts about "me", as I don't make mine about "you". I post about the topic. My business is fine, I compete successfully. Now stop it. Get back to the topic.

It would be simple to implement a max percent fee cap on what an AMC takes from the borrower paid total appraisal fee, a reasonable cap appropriate to the relative contribution such as 20% or 25%. The AMC is free to make as much additional profit as they can by charging a lender additional to that and lender is free to pay it Or let the AMC develop other lines of business, let them compete in the open market. A cap on the AMC percent would stabilize things for appraisers and consumers and stop the bleeding out of the profession by appraisers since the present system is an AMC agenda of driving the appraiser portion as low as they can. .

Res lender fees are limited because most borrowers can only pay so much for an appraisal. If a borrower pays $500 for an appraisal, that's the money in total. A) $500 can go to the appraiser, or B $400 can go to the appraiser and $100 for management, or C $250 to the appraiser and $250 to AMC management. A cap on the percent an AMC can charge would prevent C..

 

[DWiley]

It would be simple to implement a max percent fee cap on what an AMC takes from the borrower paid total appraisal fee, a reasonable cap appropriate to the relative contribution such as 20% or 25%. .

Yes, that is simple, and if passed today would have no effect whatsoever. AMCs take 0% now from the borrower paid fee. Any fees that the borrower pays go to the LENDER, not the AMC. Any charges/fees a lender assesses to a borrower is irrelevant to an AMC. The AMC charges the lender, and what the lender does with the borrower fees is a matter between the lender and the borrower, and has nothing to do with the AMC.

Oh, by the way - good luck on the legality of capping what a company can charge. You did see how the FTC recently reacted in the case of a regulatory body trying to set fees, right?

 

[J Grant]

You are good at parsing words to distract a post from what it conveys. Yes, the lender pays the AMC - we know the AMC does not directly take it from the borrower pays - I was writing about where the money goes as a percent of fee split-, assuming it is known you do not take it literally from the borrower. ( we are not idiots) Yes, the borrower pays the lender, we know that too..

Clearly the lender takes a portion of the borrower fee and passes it along to the AMC as payment for the AMC service, correct? ( yes or no)

. Otherwise, the lender would pay for your service as a cost to them , and they don;t do that, correct? (yes or no that they pay from their own operating costs outside of taking a portion from what borrower paid and passing it along)

 

[J Grant]

Setting a fee and capping a percent on the HUD are two different things.

But yes, it would be difficult to pass, I doubt it would happen any time soon and I personally don't have the energy to project so time consuming. The cap however does not cap or limit the total amount an AMC can charge, it only caps the % AMC can get that comes from the borrower paid amount. The AMC is free to charge as much additional $ to the lender client as they want. No limit on that

I think a feasible project for appraisers would be to work on a consumer outreach website that informs borrowers about AMC issues , fees, and how it impacts appraiser selection for their order.

 

[J Grant]

DW- The AMC charges the lender, and what the lender does with the borrower fees is a matter between the lender and the borrower, and has nothing to do with the AMC

Really? Doesn't' the lender take a percent from the total $ appraisal fee the borrower paid, and pass that percent on the the AMC as payment for the AMC service?