Working RE on The Great Debate on Appraisal Fees

[J Grant]

What do you mean "good to hear that we agree on that"? When have I ever said otherwise? Never, that's when. Grow TF up.

The only way the lenders will be forced to pay the AMCs end instead of the borrower paying for it is if the feds enact a regulation to that effect. I daresay you'll have better luck getting the feds to legislate a national minimum wage for appraisers.

As for cost-plus what that would do is *increase* the amount of shopping and negotiating the AMCs engage in (and the costs they charge the lender for doing it) . But that isn't what you had in mind, is it?


I just posted a poll. Let's see who can be honest with their responses. And who will lie in order to make a point.

Rude much...

I said good to hear we agree and you said Grow TF up.

The feds could eliminate the bundled fee for appraisals with a pen stroke. It would be much easier for them then a national min wage, which is not what myself or anyone else is asking for.

I will answer your poll, but your poll would apply to AMC/other work.

. Without AMCs as middlemen, when lenders order directly and the same for cost-plus lender AMCs, they are not interested in searching out lower fees for regular orders- they pay a C and R rate the same to all on their panel in a regional area.

 

[George Hatch]

I don't appreciate the constant gaslighting and reimagineering that you engage in and this isn't the first time I've told you that. It's an argument in bad faith. I have always thought the splits were too low but at the same time I understand why the lenders are acting the way they act and I attribute to them that which is theirs'.

Same with your accusations that I don't understand your reasoning. I do. That understanding is precisely - and only - why I disagree with it.

 

[shrubberyvaluation]

Why would a lender want an AMC that shops an appraisal around for 2 weeks so the AMC can pocket more. The lender isn't gaining anything. Lenders do have power on who they choose. The AMC I work for uses the lender fee and has a static cut. Most are assigned but if declined by too many or a rush it will be for bids, I bid on one and they actually increased it over what I bid because the lender had just raised their normal fee, instead of the AMC just pocketing the rest.

 

[J Grant]

I don't appreciate the constant gaslighting and reimagineering that you engage in and this isn't the first time I've told you that. It's an argument in bad faith. I have always thought the splits were too low but at the same time I understand why the lenders are acting the way they act and I attribute to them that which is theirs'.

Same with your accusations that I don't understand your reasoning. I do. That understanding is precisely - and only - why I disagree with it.

I am not trying to gaslight you.

Yes, you do say the Splits are too low, and I have responded numerous times that the solution is eliminate the fee split entirely, (no more bundled fee on the HUD for appraisals ) but you ignore it and keep talking about splits and disclosures.

 

[Dublin ohio]

(no more bundled fee on the HUD for appraisals )

And just what would that accomplish. Honest question.

 

[shrubberyvaluation]

And just what would that accomplish. Honest question.

Might not accomplish much. If they see for their $750 appraisal fee that $550 went to an AMC and $200 to an appraiser they may wonder why they had to pay so much. Will they connect it to the lender being crappy for selecting the AMC? I doubt it. If they did maybe it would cause reputational damage as referals are a thing but thats a big maybe IMO.

The thing is until the lenders that use crap AMCs start feeling pain for their decision to use crappy AMCs they will continue to do it.

 

[George Hatch]

I am not trying to gaslight you.

Yes, you do say the Splits are too low, and I have responded numerous times that the solution is eliminate the fee split entirely, (no more bundled fee on the HUD for appraisals ) but you ignore it and keep talking about splits and disclosures.

I don't ignore the possibility. I just disagree with the idea that the AMCs have no incentive to shop fees if their end is fixed. I think they're under constant pressure from the lenders.

You seem to be banking a lot on the point that the bundled fee is labeled "appraisal fee" and should therefore only go to the appraiser doing the work. Even though the "label" play is clearly not how it works when the appraiser is working on staff or in a fee shop or for the govt.

 

[Terrel L. Shields]

Why would a lender want an AMC that shops an appraisal around for 2 weeks so the AMC can pocket more.

An appraiser who works for a regional told me some time back that they only use an AMC for certain areas they don't have good appraiser coverage from their own vendors list. She said, " I hate 'em." They promise quick turnaround and often we wait weeks to get a report back. But the implication was that her staff had no real ability to get around that. These AMCs marketed themselves to the bank board directly and therefore, they had to use them. It's the same with contract evaluators. I know a bank who offers to get you (the borrower) an appraiser and appraisal report for about $800 or you can do the evaluation route for $300. But if they use the appraiser, they use the same evaluator provider who also does their compliance reports, as their AMC and rarely pay over $400 to the appraiser.

 

[shrubberyvaluation]

An appraiser who works for a regional told me some time back that they only use an AMC for certain areas they don't have good appraiser coverage from their own vendors list. She said, " I hate 'em." They promise quick turnaround and often we wait weeks to get a report back. But the implication was that her staff had no real ability to get around that. These AMCs marketed themselves to the bank board directly and therefore, they had to use them. It's the same with contract evaluators. I know a bank who offers to get you (the borrower) an appraiser and appraisal report for about $800 or you can do the evaluation route for $300. But if they use the appraiser, they use the same evaluator provider who also does their compliance reports, as their AMC and rarely pay over $400 to the appraiser.

I guess it makes sense why the big banks seem to be more likely to use the worst of the worst AMCs.

 

[J Grant]

I don't ignore the possibility. I just disagree with the idea that the AMCs have no incentive to shop fees if their end is fixed. I think they're under constant pressure from the lenders.

You seem to be banking a lot on the point that the bundled fee is labeled "appraisal fee" and should therefore only go to the appraiser doing the work. Even though the "label" play is clearly not how it works when the appraiser is working on staff or in a fee shop or for the govt.

How to address this: 1) AMCs should not be in the fee business with appraisers. The right way to do it would be for the lender to tell the AMC the cost for the AMC service to them, just like every other customer pays for a service. The appraisal fee the lender collects from the borrower covers the appraiser's fee. The AMC can do all the rest: the admin, review, order, deliver, and review. If the lender can pass on that AMC cost to the borrower, then they could do so.

2) Being that it is not teh system we have now, the AMC;s shop fees are typically not fixed ( though if a lender isn't on it, then it would be ). The AMC's that use a cost plus system are typically an AMC owned by the lender for their own order processing - it is owned under a different name under a different division ot the lender.

3) The independent (not owned by the lender whose work they process) an independent AMC does shop for fees, because their livelihood comes from teh split of the appraiser's fee that a borrower paid -. They act like a wholesaler or middleman, but one that has a very odd place compared to other businesses since GSE appraisals are the only area where the ordering of an appraisal is restricted ( the loan officer or loan broker as an individual is not allowed to select the appraiser ) .

The bundled fee on the HUD is only allowed to be split between a third party and the appraiser. It does not deal with fee shops or govt agencies. That is why a lender can not split fees. That is why a lender to be in the fee-splitting position, forms a separate division AMC to be a third party and only then can it legally split a bundled HUD fee .

An employer such as a govt or fee shop does not split a fee. - because they are not a third party. The fee shop or govt agency acts like an employer -and produces the appraisal and pays the appraisal if it uses one for the appraisal at whatever rate they decide. The AMC is a thrid party middleman service. IF an AMC hires an appraiser for staff then it is also an employer..

As far as constant pressure for the lenders, I do not see AMC's under pressure from lenders to pay the appraiser less. The lender gets nothing when that happens. The lender passes the borrower payment along to the AMC, whether the AMC splits it 80/20 with the appraiser or 50/50. The lender gets no $ either way ( unless a kickback scheme is there, which I can not speculate on ). The lender pressures the AMC for turn time /quality and delivers the appraisal for the $ amount the borrower paid as the through payment, so the lender is not charged an additional cost. Why would a lender pressure an AMC to pay an appraiser this or that amount on each order? Or be involved in each fee bid ? What a PITA that would be, since the lender hires the AMC to separate themselves from the appraisal process.