Why lender's appraisal fee cap is so low?

[J Grant]

Those assignments don't belong to the appraiser. Once assigned to an AMC they belong to the AMC to control and distribute and manage as per market conditions.

The appraiser pays nothing to anyone; they get paid for what they do as per their own agreement. Or, they don't do the assignment at all. As for direct lender work, what the low volume lenders do is immaterial in a discussion of the economy of scale at which the high volume lenders operate. What your 3-assignment/month credit union is doing is irrelevant by comparison. As evidenced by the fact that those direct lenders only handle a fraction of the business. If it was otherwise then nobody would work for the AMCs and nobody would care what those lenders are doing.

You might think the bundled fee is the problem except that it isn't. Even if an AMC went to cost+plus all that would happen is the appraisers on that panel would still initiate the downward spiral of fees in competition for more work. "I'm not getting enough of your assignments. Can I get more if I reduce my fee?"

The only reason I support breaking the bundled fee model is to shut you (and others) up and force you all to acknowledge that your real problem is still too many heads chasing not enough assignments in an internet-enabled marketplace.

You insist on posting misleading things on these topic and will not address what I actually write, so it is pointless to keep saying the same things to counter that,

I have repeatedly told you my clients are not 3-4 a month credit unions. The two main ones are national scale direct order - however, it is true that overall there is not enough direct order to go around, and that is because of the AMC lock on that market, which is the point-if the AMC did not get paid out of the appraisal fee, then appraisers would get full fee from them and problem solved.

Since direct lenders pay a full fee , it is not just a case of too many heads chasing enough assignments, the problem is the AMC gets paid no matter how you keep trying to twist it around from theo the appraisal fee, the secondary problem is the appraiser n oversupply but when it gets busy, suddenly there is an undersupply

 

[chad hampton]

One of the largest banks in this area that broadcast is Independent Financial. I continue to bid on assignments just to see how low I have to go to get an order. Lost out on a very easy land appraisal with a $250 bid last week... so far, I'm batting 0 with them - but I still play for the fun of it.

Just like you, I’ve lowered my bids into the twos just for the hell of it, doubt I would do it if one was ever accepted. It’s not a good look having a professional work product that they’re making lending decisions based on for that sort of a fee. Everyone involved knows corners are being cut When the fee gets that low.

 

[J Grant]

I stated that the AMC gets compensated from the appraisal fee -I did not literally mean the AMC gets paid by the appraiser.

 

[Mejappz]

Just like you, I’ve lowered my bids into the twos just for the hell of it, doubt I would do it if one was ever accepted. It’s not a good look having a professional work product that they’re making lending decisions based on for that sort of a fee. Everyone involved knows corners are being cut When the fee gets that low.

And then you have the FHFIA and the GSEs complaining that appraisers don’t make market conditions in a changing market.

 

[George Hatch]

You insist on posting misleading things on these topic and will not address what I actually write, so it is pointless to keep saying the same things to counter that,

I have repeatedly told you my clients are not 3-4 a month credit unions. The two main ones are national scale direct order - however, it is true that overall there is not enough direct order to go around, and that is because of the AMC lock on that market, which is the point-if the AMC did not get paid out of the appraisal fee, then appraisers would get full fee from them and problem solved.

Since direct lenders pay a full fee , it is not just a case of too many heads chasing enough assignments, the problem is the AMC gets paid no matter how you keep trying to twist it around from theo the appraisal fee, the secondary problem is the appraiser n oversupply but when it gets busy, suddenly there is an undersupply

The only way the appraisers get paid $500 is if that number is established by regulation. There is no way the lenders can be forced to refrain from allowing the appraisers to compete with each other by fee, and the mere fact that many appraisers ARE taking lower fees demonstrates their willingness to do so if that's what it takes to compete. The conduct of the low-cost providers directly contradicts the notion that they won't be motivated to continue to compete by fee for the limited amount of work that's available.

And the implication in the OP that there is a TILA violation being committed by the AMCs is....interesting. It's the lenders who are required to comply with TILA disclosures, and there is no lender who is unaware of the amounts being paid to the appraiser for that assignment. If the lender isn't disclosing the split it's because they don't want to, not because they somehow don't know or are being lied to.

You seem to think any of the borrowers will care what the appraiser gets paid by the time they get to the closing table. I doubt that. Most borrowers already thing appraisers get paid way too much for how little they do. And you know it.

 

[George Hatch]

I stated that the AMC gets compensated from the appraisal fee -I did not literally mean the AMC gets paid by the appraiser.

The AMC gets compensated out of the bundled fee for all services rendered, of which the appraiser's work is but a subset. If you're hanging the entirety of your argument on the "appraisal" label as opposed to whatever other term could be (and usually is) used to describe the entirety of the services being paid by that fee then you have a semantics problem, not a theft problem.

 

[BRCJR]

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?

Because Appraisers allow it.......and because of the cut-rate Appraisers...and because of different business models......

 

[George Hatch]

Without exception, every AMC head I've ever spoken to on the subject says the low-cost providers invariably approach them to lower fees in order to get more work. Most of them admit to citing those lower fees to shop other appraisers, and using that "if you won't do it I'll find someone else who will" line. Because they can. My guess is that virtually every appraiser in this thread has seen examples of those lenders never coming back as a result of successfully carrying out their claim.

If you were charging them $600 in 2020 but you're now charging $400 because of the market conditions for appraisal services then aren't you just as guilty of perpetuating the cycle as the appraisers who set the bidding war off in the first place?

Where's all that tough talk now from a couple years ago where some of you were saying you wouldn't walk out your door for less than $600?

That's a rhetorical question. Everyone knows what happened to all that tough talk.

 

[David S]

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..

Yes, it is better there are two lines in HUD GFE form about appraisal section, one for AMC fee charge and one for appraiser charge.

 

[J Grant]

Without exception, every AMC head I've ever spoken to on the subject says the low-cost providers invariably approach them to lower fees in order to get more work. Most of them admit to citing those lower fees to shop other appraisers, and using that "if you won't do it I'll find someone else who will" line. Because they can. My guess is that virtually every appraiser in this thread has seen examples of those lenders never coming back as a result of successfully carrying out their claim.

If you were charging them $600 in 2020 but you're now charging $400 because of the market conditions for appraisal services then aren't you just as guilty of perpetuating the cycle as the appraisers who set the bidding war off in the first place?

Where's all that tough talk now from a couple years ago where some of you were saying you wouldn't walk out your door for less than $600?

That's a rhetorical question. Everyone knows what happened to all that tough talk.

A lender direct does not give more work to any appraiser who offers to lower the thief fee for more work; they pay all the panels the same fee in an area for regular orders.


An AMC agreed to throw with lower fees ( typcially_), so you blame the appraiser for offering to lower their fee instead of the system making it necessary for them to do that? Your choice but tii is your choice of where to put the blame- the AMC can always so now and refuse to pay less lol, but you con' hold them to task for it - odd