Why lender's appraisal fee cap is so low?

[David S]

Got an quote from AMC yesterday, I asked $100 extra fee since it is rush. But lender came back to say sorry their cap is $750 appraisal fee max. After $300 AMC, I only have $450. I didn't take it since it will be about $40 hourly rate. If all lenders keep the appraisal fee cap so low, how our industry can stand? We can't negotiate AMC cut off, right?

 

[J Grant]

Got an quote from AMC yesterday, I asked $100 extra fee since it is rush. But lender came back to say sorry their cap is $750 appraisal fee max. After $300 AMC, I only have $450. I didn't take it since it will be about $40 hourly rate. If all lenders keep the appraisal fee cap so low, how our industry can stand? We can't negotiate AMC cut off, right?

The probelm is less of the lender cap than it is that the AMC is able to keep $300 of it.

 

[Fernando]

Got an quote from AMC yesterday, I asked $100 extra fee since it is rush. But lender came back to say sorry their cap is $750 appraisal fee max. After $300 AMC, I only have $450. I didn't take it since it will be about $40 hourly rate. If all lenders keep the appraisal fee cap so low, how our industry can stand? We can't negotiate AMC cut off, right?

I never experienced appraisal cap. Recently I asked for full amount ($725) with nothing for AMC and I got it.
Later when I looked at total fee disclosure, AMC got paid like $125.

 

[chad hampton]

The AMC‘s and their BFFs at the GSE’s have destroyed this profession.

 

[gorillakimchi]

The middle man cuts too much and they never disclose original fees from a lender.

I think appraisers do most of works. Does anyone works at AMC or knows why they can take that much?

 

[sputnam]

Got an quote from AMC yesterday, I asked $100 extra fee since it is rush. But lender came back to say sorry their cap is $750 appraisal fee max. After $300 AMC, I only have $450. I didn't take it since it will be about $40 hourly rate. If all lenders keep the appraisal fee cap so low, how our industry can stand? We can't negotiate AMC cut off, right?

The Lender has to provide the Borrower with an estimate of closing costs... including the cost of the appraisal. That happens before they contact the AMC (or the appraiser) to have the appraisal done. There are regulatory consequences if the Lender then charges more than the estimate given to the Borrower. At that point, the Lender starts eating the additional costs or they renegotiate with the Borrower or they find a cheaper appraiser. The AMC doesn't set the Lender's cap. The AMC has to work within that cap and still make money. It's still true that most loans require appraisals. I don't blame the AMCs or Lenders for trying to keep their costs low (including the cost of the appraisal). I blame appraisers for accepting assignments at lower fees.

 

[J Grant]

The Lender has to provide the Borrower with an estimate of closing costs... including the cost of the appraisal. That happens before they contact the AMC (or the appraiser) to have the appraisal done. There are regulatory consequences if the Lender then charges more than the estimate given to the Borrower. At that point, the Lender starts eating the additional costs or they renegotiate with the Borrower or they find a cheaper appraiser. The AMC doesn't set the Lender's cap. The AMC has to work within that cap and still make money.

Yup, and the money the AC has to make should come out of the lender's pocket as a cost for service, not out of the appraiser's pocket by skimming off the appraisal fee. It is legal to do that under the HUD blended fee if anyone wants to know how it happens. That is the part that needs to change: strike the bundled fee or put a cap on what the AMC can keep and let a lender make up the difference if they want to. I have never heard of any other business where the vendors pays to keep the third party namanger in business instead of the customer paying for a good or service..

 

[Tom D]

the AMC deserves the $300 for taking 1 minute to to send you an order. stop complaining, you support them. like the godfather said, stop crying and be a man.

 

[J Grant]

the AMC deserves the $300 for taking 1 minute to to send you an order. stop complaining, you support them. like the godfather said, stop crying and be a man.

a protection racket - Vic the appraiser lol

 

[George Hatch]

There is no involuntary servitude in America. There are only choices

• If this lender won't offer a mortgage at competitive terms and costs then the borrower will just find another lender who will
• If this AMC won't offer a competitive bundled fee then the lender will just find another AMC who will
• If this appraiser won't bid at a competitive fee then the AMC will just find another appraiser who will
• If this AMC won't offer an acceptable fee then the appraiser will just seek their own alternatives. Elsewhere.

Everyone gets to make their own choices. Nobody gets to make their choice and then cry about it.