The Appraiser Shortage Myth Part 43

[J Grant]

http://appraisalvaluationservices.com/state-fee-disclosures/

Read the first paragraph, where it says "disclosure of fee split " between AMC and appraiser.

The amount lender sends to AMC is between AMC and lender...but if the lender sends the AMC the payment for their service from the appraisal fee total borrower paid lender, how is that described?

The disclosure in the appraisal, which is what I posted about, is labelled correctly - fee split, not restaurant bill allusion or (detailed accounting).

 

[The Warrior Monk]

http://appraisalvaluationservices.com/state-fee-disclosures/

Read the first paragraph, where it says "disclosure of fee split " between AMC and appraiser.

The amount lender sends to AMC is between AMC and lender...but if the lender sends the AMC the payment from what borrower paid, then how is that described?

The disclosure in the appraisal, which is what I posted about, is labelled correctly above and in other articles on the subject, - fee split, not restaurant accounting of a bill.

This is state specific and is a requirement upon the AMC and/or appraiser. This has nothing to do with the disclosure regarding the bank.

However, since you brought this up, do you have evidence that fees to the appraiser suddenly increased in these states due to this state-required disclosure? That would help support you thesis.

 

[DWiley]

If not, then what it is a detailed accounting of?

I provide detailed billing ... to the party responsible for the payment - the LENDER. The fact that the lender does not provide details when it then makes disclosures to others is simply not within my purview.

What you are upset about is how the lender then interacts with another party (the borrower, when applicable). That is something that AMCs have no control over. They also have very little concern about it one way or another. It matters not one iota to me how a lender deals with or discloses its agreement with a borrower or anyone else. If a lender owes me $550, I don't care if they pass $350 to someone else, $550 to someone else, or $0 to someone else - just as long as they pay me what they owe me.

It sounds to me like you want AMCs to disclose what someone else (lenders) is doing.

By the way, I understand why you dismissed my example of default work, because it shoots a big hole in your arguments. The fact is that default and REO work has been and remains a large percentage of AMC business (I have clients who order only that kind of work), and in those assignments there is no borrower to pass any costs along to (so much for the "split fee" thing). Yet, those clients still engage an AMC. So much for the theory that lenders only use AMCs because the service is free to the lender

 

[Mr Rex]

One of the things that is of benefit to the banks using AMCs is that the bank only has to prepare one 1099 at the end of the year. The AMCs thousands.

 

[Meandering]

http://appraisalvaluationservices.com/state-fee-disclosures/

Read the first paragraph, where it says "disclosure of fee split " between AMC and appraiser.

The amount lender sends to AMC is between AMC and lender...but if the lender sends the AMC the payment for their service from the appraisal fee total borrower paid lender, how is that described?

The disclosure in the appraisal, which is what I posted about, is labelled correctly - fee split, not restaurant bill allusion or (detailed accounting).

If I may interupt.

The issue is not the "seperation" of fees.

The issue is that the AMC should not keep a bigger % of what the borrower paid, based on how low they can get an appraiser to accept an assignment.

The AMC should not recieve less of a fee because the appraiser asked for a higher fee.

Therein lies the mystery the FTC will sort out.

Exercising that "market power" to beat down appraisers, to line their own pockets, or, delaying borrowers while they search and search for a lower fee appraiser, is the harm being 'cause by fee splitting.

But I will maintain that,

There is no where in RESPA that allows for a "blended fee" for appraisal and management services.

That's just kool aid that has not survived the TRID Update, which mysteriously happened after the FTC file against LA.



Just don't believe there is an "allowed" fee split between AMCs and appraisers, or that a "performance" award is allowed to an AMC that can get an appraiser to accept a lower fee.

Just kool aid unless they can show the law which allows any of this.

.

 

[The Warrior Monk]

One of the things that is of benefit to the banks using AMCs is that the bank only has to prepare one 1099 at the end of the year. The AMCs thousands.

A lot of banks, especially larger ones, don't use an AMC for all assignments. It appears that many use AMCs for much of the GSE-related assignments. However, other divisions will order direct.

 

[The Warrior Monk]

There is no where in RESPA that allows for a "blended fee" for appraisal and management services.

It doesn't have to allow for a blended fee. If it is not prohibited, then there is no legal recourse against that particular action (i.e., is "allowed").

 

[J Grant]

I provide detailed billing ... to the party responsible for the payment - the LENDER. The fact that the lender does provide details when it then makes disclosures to others is simply not within my purview.

What you are upset about is how the lender then interacts with another party (the borrower, when applicable). That is something that AMCs have no control over. They also have very little concern about it one way or another. It matters not one iota to me how a lender deals with or discloses its agreement with a borrower or anyone else. If a lender owes me $550, I don't care if they pass $350 to someone else, $550 to someone else, or $0 to someone else - just as long as they pay me what they owe me.
It sounds to me like you want AMCs to disclose what someone else (lenders) is doing.

By the way, I understand why you dismissed my example of default work, because it shoots a big hole in your arguments. The fact is that default and REO work has been and remains a large percentage of AMC business (I have clients who order only that kind of work), and in those assignments there is no borrower to pass any costs along to (so much for the "split fee" thing). Yet, those clients still engage an AMC. So much for the theory that lenders only use AMCs because the service is free to the lender

Most AMC assignments are not default work (in my area)

But even when an assignment is default work, the dynamic is the same. If an AMC gets paid $400 from the lender for the default appraisal, and AMC can get the appraisal done for $200 from an appraiser rather than $300, the AMC makes more when they can engage appraiser at lower fee. This is not in play in cost plus, which typically has a uniform fee for default or loan appraisals- such as $350 to appraiser and $100 to AMC from a lender paid to AMC $450 amount. .

The fact that an AMC makes more money when the appraiser makes less money is what creates the drive for AMC's to shop for lower fees from appraisers. ,

That is what bothers me. The arrangement between a lender and their borrower does not bother me and.I never said it did. You keep alluding beliefs to me that I do not hold

 

[Meandering]

It doesn't have to allow for a blended fee. If it is not prohibited, then there is no legal recourse against that particular action (i.e., is "allowed").

You better recheck that underlined part, specifically about fee splitting, before you proceed with any futher opinions on that matter.

.

 

[The Warrior Monk]

You better recheck that underlined part, specifically about fee splitting, before you proceed with any futher opinions on that matter.

.

Which one?

It's hard to keep track of all the underlines (which are typically taken out of context).