U.s. Regulators Ready To Ease Check On Property Values

[J Grant]

I answered your questions, can you answer mine?

1) In nearly all regions, non AMC's pay higher than AMC's for the same work with same pool supply of appraisers. How does that work, if it is as you say that appraiser supply and demand is the cause of lower fees?

2) Since the only thing AMC's paying lower fees accomplishes is that it allows them to offer free of cost service to lender, why do you keep defending that model?

3) For AMC assigned work, why is it a good policy for a borrower get a less experienced appraiser or assigned an appraiser swamped with volume because they agree to the $250 fee and therefor treats their report like fast food? The borrower paid same or similar fee as they do for a lender that is not using an AMC.

 

[George Hatch]

I have answered these questions many times. You just don't like the answers. Here's a pro-tip; regardless of how many times you ask them I'm still going to have the same answers for you. Repeating your question won't change my opinions or my responses.

1) In nearly all regions fee shops or staff appraisal jobs of any kind pay splits. that has always been the case. So what? If you have alternate sources of business you are free to pursue them. You are not enslaved and neither is anyone else.

2) I'm not defending the model. I'm just commenting on how and why I think it occurred, and how little basis we have for persuading the lawmakers to intervene on our behalf to protect our economic interests on the basis that we are entitled to it and they owe it to us.

3) I never said it was good policy. Unfortunately for appraisers, nobody cares what we think. Again, that's not advocacy for that point; it's a simple acknowledgement of the reality.

 

[George Hatch]

We can't force lawmakers to do anything, can we...seems regulators respond after a crisis to correct it, rather than proactively. Lawmakers increased the upgrade from AVM to minimum of an evaluation, so their prudence in that regard did impart alternate products. If an alternate product is used as approved by regulators nothing we can do about it, But as long as appraisals are being used, why are AMC's allowed to wreak havoc with the fees ( and lenders get a free ride from them)

So what do you think it will take to change that?

 

[J Grant]

.

So what do you think it will take to change that?

Will try to address it over weekend...very behind on work

 

[timd354]

I have answered these questions many times. You just don't like the answers. Here's a pro-tip; regardless of how many times you ask them I'm still going to have the same answers for you. Repeating your question won't change my opinions or my responses.

This has been going on for years....

 

[chad hampton]

I think you can have more influence on your lawmakers than you think. Probably not at the DC/senate level, perhaps not even rep level, but definitely state legislators. If you say you are a voter in their district, they tend to listen. Don't always agree, but some still care about their constituents. Especially if you say you are calling as a member of a statewide appraisal organization with hundreds or thousands of members.

There would be a lot of changes going on now, but most states are waiting for the LA case to work its way out.

I'm surprised state appraisal organizations haven't started suing their states for not enforcing DF as they are mandated to do. I'm not aware of any, other than LA, that made any sort of attempt to do so.

 

[Terrel L. Shields]

hat the evaluator is doing for that $1000 that the appraiser couldn't do in an appraisal report.

He or she is escaping liability. They cannot take away their license, they have none. That's one. And I didn't say they charge $1,000 though they might, but I know in the case of the fellow above he charged $1,000 for a commercial APPRAISAL of a welding shop because I was involved. He did another that I sent him for the same money, a small industrial. But he does the EVALUATION to the standards in the IAG. He did the APPRAISAL REPORT to a far higher standard (USPAP).

When he figured out he could do evaluations with zero risk, zero E & O, zero liability and a much lower standard of diligence he dropped his license, went to work as a partner in a firm that is now doing a big chunk of evaluations that were once bread and butter for the appraisers who were trying to avoid the AMCs. And they don't share the fee with an AMC and have a set fee schedule. Take it or leave it.

 

[Terrel L. Shields]

state appraisal organizations haven't started suing their states for not enforcing DF as they are mandated to do.

I sent a note to our Board director to ask them to address the "appraiser doing an evaluation without complying with USPAP" issue. Are they going to allow it or not? I see no enforcement. I see the bankers telling appraisers they can do "evaluations" outside of USPAP...what gives?

 

[George Hatch]

He or she is escaping liability. They cannot take away their license, they have none. That's one. And I didn't say they charge $1,000 though they might, but I know in the case of the fellow above he charged $1,000 for a commercial APPRAISAL of a welding shop because I was involved. He did another that I sent him for the same money, a small industrial. But he does the EVALUATION to the standards in the IAG. He did the APPRAISAL REPORT to a far higher standard (USPAP).

When he figured out he could do evaluations with zero risk, zero E & O, zero liability and a much lower standard of diligence he dropped his license, went to work as a partner in a firm that is now doing a big chunk of evaluations that were once bread and butter for the appraisers who were trying to avoid the AMCs. And they don't share the fee with an AMC and have a set fee schedule. Take it or leave it.

The only way I would take seriously the argument that my exposure to liability adds to my costs would be if I was in the habit of pushing values to the point where users were suffering appraisal related losses and looking to hang the appraiser for anything they could find. I've never done that and I doubt you've ever done that.


IMO as much as 50% of what commercial appraisers commonly put into their narrative appraisal reports is client-driven, not USPAP driven. Those same clients can take a lot less in certain situations if they're savvy enough about appraising to ask for it. I think a lot of appraisers are guilty of selling their clients way more development and reporting than the property warrants, and THAT is on the appraisers, not USPAP and not the clients. It's our version of the form monkey mentality.

 

[J Grant]

George , I appreciate your response, but you did not address the question ( or you misunderstood it). The question related to non AMC LENDER work, I thought that was implicit, for clarity I added "lender". Below, again, the question

1) In nearly all regions, non AMC's LENDERS pay higher than AMC's for the same work with same pool supply of appraisers. How does that work, if it is as you say that appraiser supply and demand is the cause of lower fees?

You answered :

1) In nearly all regions fee shops or staff appraisal jobs of any kind pay splits. that has always been the case. So what? If you have alternate sources of business you are free to pursue them. You are not enslaved and neither is anyone else.

My question had NOTHING to do with fee shops or staff appraisal jobs! How did you read that into the question? The question related to the fact that you keep claiming that appraiser over supply is what creates low fees, I was bringing up the fact in question form, that despite the same supply of appraisers , non AMC lender clients pay far higher fees...They have same supply of appraisers availabvle, yet they don't exploit it to pay lower fees, they have no reason to, since they are not keeping the fee split for their own profit. I suppose nothing can get you to understand that, or admit it, but thought I would try.

Since you did bring up a side topic of fee shops, an AMC is not a parallel for an appraiser fee shop; with an appraiser fee shop, a supervisor trains an appraiser and thus imparts something of value to the appraiser (training) for the fee split, or provides an environment of support for appraisers who are cert licensed...though on res side now there are far fewer such arrangements now...which is not a good thing , a field needs new people entering for their tech knowledge and energy, the fact that AMC's have made the res lending side so unrewarding that few want to enter or train is cause for alarm,not celebration ..I am not celebrating if fewe are entering which can mean higher fees for me, I think it is sad the field has been ruined so much that I no longer would ever train, or recommend a new person enter it (as I did in past years) and too many experienced, competent appraisers with knowledge they could pass on feel the same way.