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

[Meandering]

If supply and demand were the fee drivers, the fees in 2007-2009 would not have been higher, with so many more appraisers, than they were the day after HVCC went into effect.

Whatever happened to our buddy Jeffie Schurman and his back of the napkin math of what AMCs could take from appraisers?

Oh yeah, he’s unemployed.

.

 

[Meandering]

If supply and demand were the fee drivers, the fees in 2007-2009 would not have been higher, with so many more appraisers, than they were the day after HVCC went into effect.

Whatever happened to our buddy Jeffie Schurman and his back of the napkin math of what AMCs could take from appraisers?

Oh yeah, he’s unemployed.

.

 

[Meandering]

Good old “Faster, Cheaper, Better” Jeffie.

 

[George Hatch]

Of course the fees were higher back when the market was less efficient. That model is over, though; and for cause.

And yes, the fees that lenders pay individual appraisers under direct engagement are higher than when there's a middleman involved, whether it's a fee shop or a staff appraisal situation.

Your AMC problem is how many of the lenders chose to deal with the AMCs instead of dealing with appraisers directly. They did it because they were able to do it and because they thought it was in their best interests to do it, and 10 years later they still think that.

Think about that - these lenders have 10 years of experience in this model and many of them still prefer it Regardless of how that happened or what you think of AMC appraisers it's obvious that these lenders are satisfied with this model.

And since neither one of you were apparently around prior to licensing and you don't know anything what you're talking about WRT how fee shiops ran prior to 2000 let me explain it to you. It was *common* for experienced appraisers to work for fee shops and single operators were relatively few in number because of the higher overheads in equipment. Appraisers used to come and go at fee shops depending on who had work. I usually worked for at least 2 fee shops at any given time, and none of them were "training" me. I worked for other people for 7 years before I went out on my own, in large part because it wasn't financially feasible to be a single operator prior to the advent of the CD-ROM and laser printers.

back then most appraisers were not even marketable until they had established their own reputations; or were dating the loan processors - whichever came first.

That's why the trainee-driven model of the fee shops being run by rookies that came later were such a horrible mutation.

 

[J Grant]

Prior to HVCC and the large market share going to AMC's, there were market cycles when mtge lending slowed down creating an over supply of appraisers relative to demand, yet the lenders and mortgage brokers did not seek to reduce appraiser fees..why would they, since they did not keep any of the differential? What created all the pressure to pay appraiser less out of the borrower portion is the system where the AMC gets paid by keeping a portion of pass through borrower paid. Those sets of banks/lenders who get a free ride on the backs of appraisers via the AMC service that costs them nothing are the root cause ....it would be simple problem to solve, but how to accomplish that simple regulatory change is another matter , which means it may not happen any time soon, though there are surprises and administrations change and sometimes all it takes is one person to listen who is in a posit n to act. Some here allude to state levels change...will see, meanwhile, hope we all on an individual level do well...on a positive note I See more lenders ordering direct ....or insisting their AMC' s pay more so that is a positive trend

 

[George Hatch]

The point is that the MB-select model created its own problems and those problems are what led to it being outlawed. That much was inevitable. We had hoped the lenders would all choose to go to direct engagement but many of them didn't.

As of now it's 2018. There is no winding the clock back to 2005 to correct the errors of the past. We have to deal with the situation we face today, so the operative question isn't what we could have done better, but what can we do now and where can we go from here.

 

[George Hatch]

Prior to HVCC and the large market share going to AMC's, there were market cycles when mtge lending slowed down creating an over supply of appraisers relative to demand, yet the lenders and mortgage brokers did not seek to reduce appraiser fees..why would they, since they did not keep any of the differential? What created all the pressure to pay appraiser less out of the borrower portion is the system where the AMC gets paid by keeping a portion of pass through borrower paid. Those sets of banks/lenders who get a free ride on the backs of appraisers via the AMC service that costs them nothing are the root cause ....it would be simple problem to solve, but how to accomplish that simple regulatory change is another matter , which means it may not happen any time soon, though there are surprises and administrations change and sometimes all it takes is one person to listen who is in a posit n to act. Some here allude to state levels change...will see, meanwhile, hope we all on an individual level do well...on a positive note I See more lenders ordering direct ....or insisting their AMC' s pay more so that is a positive trend

The marketplace was much more diffused and inefficient prior to the HVCC and cutting the MBs out changed that. Each of those clients didn't have access to a panel of hundreds of appraisers or the means to put them against each other in the Thunderdome.

Those days are over and they're never coming back.

 

[J Grant]

The marketplace was much more diffused and inefficient prior to the HVCC and cutting the MBs out changed that. Each of those clients didn't have access to a panel of hundreds of appraisers or the means to put them against each other in the Thunderdome.

Those days are over and they're never coming back.

You STILL can not admit the truth? IT has NOTHING to do with the market being less "efficient" prior to HVCC , the difference is that post HVCC when AMC's took on a much larger market share, they made the lenders an offer the lenders couuldn't refuse, so to speak... "My AMC will offer you , the lender. FREE of cost appraisal management service! You can divest yourself of the expense and burden of maintaining an appraisal ordering and get your appraisals managed at NO COST! How do we do that? We keep part of the $ you send from what you collected from borrower as our profit and we will pay less of it to the appraiser" THAT is what creates incentive for an AMC to pay an appraiser less, it is has nothing to do with "efficiency" of the marketplace."

Prior to HVCC, these lenders/clients DID have , thorough their ordering departments access to panels of hundred or thousand sof appraisers ! They just did not keep part of the fees for themselves as profit is the difference thus no, they did not pit appraisers against each other for a few $ , whic is disgraceful that is allowed for GSE tax payer backed work.

The amazing thing is that even with this FREE of COST to them service, a number of lenders do not use AMC's , for various reasons. Of course many lenders use AMC 's... who wouldn't take advantage of a free of cost service? I wish my lawn guy cut my grass for free ! Sure I'd use him over one who charges...if my HOA would dock his pay to get him to work free for me.... .

Let lenders use AMC's till the cows come home! But also let the lenders operate as other businesses do, paying for services, aka they pay the AMC for the service of managing appraisals apart from appraiser fees. If lenders want to recover the cost they incur by paying for AMC service as an charge from the borrower let them figure it out.

 

[J Grant]

The point is that the MB-select model created its own problems and those problems are what led to it being outlawed. That much was inevitable. We had hoped the lenders would all choose to go to direct engagement but many of them didn't.

As of now it's 2018. There is no winding the clock back to 2005 to correct the errors of the past. We have to deal with the situation we face today, so the operative question isn't what we could have done better, but what can we do now and where can we go from here.

I agree with you on this post.

 

[Meandering]

Of course the fees were higher back when the market was less efficient. That model is over, though; and for cause..

Yes, because the stupid stip model and fee shopping is just so much more efficient.

Kinda funny that during a boom in appraisal work,
a boom in people training newbies

that no lender was crying about extended turn times.

Well I guess the result of better efficiency is longer turn times and less money.

.