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appraisal issues anywhere?

Posted on: 29th Aug, 2009 05:43 am
things are awfully quiet on the appraisal front. i'm surprised, especially since we have seen a proliferation of these management companies handling the ordering and processing of appraisal requests all over the nation.

are they all taking their exorbitant fees off the top? are appraiser being shorted as a result of this influx of companies?

is everything simply hunky-dory in appraisal world these days?
I have Not heard anything
Posted on: 29th Aug, 2009 09:42 am
It's becoming an increasing trend for the lenders to use the appraisal management companies (AMC). But again, surprisingly, the lender appraisals done with the help of appraisal management companies are relatively low. Some estimate it to be 5%. Lenders often take the help of AMCs as they offer "one-stop shopping" for appraisals. Some of the AMCs also offer title reports and other services. However, it's noted that the appraisal fees paid to the AMCs are quite higher than the fee appraisers. But again, the fee appraisers don't have the expense of fee panel management, ordering, reviewing, etc.
Posted on: 31st Aug, 2009 01:58 am
I personally only work with a few appraisal management companies, the very few that are willing to pay what I charge. Unfortunately, many appraisal management companies try to find the cheapest appraisers and not the best/experienced/competent appraisers. Appraisers that live in rural areas do have an advantage because there are very few appraisers to choose from, but in large metropolitan areas, I have seen fees offered by AMCs at nearly half of my standard base fee. One appraiser I know received a memo from an appraisal management company stating that he should consider reducing his fees since there are appraisers in his market willing to complete a full appraisal for $145-195, meanwhile the AMC is charging the lender in excess of $400. So that means the AMC is making more than 50% for doing nothing but being the middle man. Not to mention, the AMC makes the appraiser sign a contract saying that they will not discuss the fee arrangement with the borrower. I hear there are some solutions in the works such as changing the HUD1 settlement statement to separate the appraisers fee from the AMC fee. It will require the AMC to have a set fee instead of a percentage of the appraisers fees. There is also legislation in certain states that are requiring the AMC's to be licensed and regulated in order offer services in that state. I believe 4 or 5 states so far are already implementing this.

But since I am not the type that likes to sit and wait for the government to help, I have been telling real estate agents to recommend the use of lenders that use their own panel of appraisers and/or an appraisal portal system or brokers that offer FHA loans.

I have also been offering review services for consumers that are unhappy with their appraisals. Most AMCs have systems in place for value re-considerations and the review can offer the ammunition needed.

So to answer your question George, it is not simply hunky-dory (I like that word by the way), we are all in survival mode and having to make tough choices between volume, fees, and the headaches of dealing with these appraisal management companies.
Posted on: 31st Aug, 2009 06:23 am
believe me when i say that i know that full well, ben. my preferred appraiser told me he was allowed only $300 on a recent single family appraisal by our middleman; he's had a fee of $350 for years already, so if this foolishness were to continue, i'll probably lose my favorite because other companies will pay him his full value.

on another note, the group we have misquoted a 3-family appraisal, so instead of moving forward and charging correctly, they canceled the appraisal. then, they misquoted again and canceled again. now 2-3 weeks later i have to go back to my borrower and get another authorization for yet another amount and re-order the appraisal again.

these new inventions are atrocious, so no matter how much we like hunky-dory, it just plain isn't so.

thanks for your continued insight too...it's valuable, and i have confidence that it's been beneficial to many borrowers who've questioned the process.
Posted on: 31st Aug, 2009 09:50 am
Actually no, things are not hunky-dory. In fact, I recently asked Prospect to take me off their panel, due to their fees. I worked with Prospect when they took over IndyMac and started their Appraiser Dept. Fees were normal and that was appreciated. When they created the C2C company (yes, created, it's the same people in the same place), they started milking their Appraiser's for at least $100/appraisal. Do the math. They have what 3,000? 4,000 loan officers across the country? Instantly, they created another $500,000 - $600,000 in profit (at least) just because they could.

I work with other companies that created their own Appraisal Dept. when HVCC kicked in. They hired people just to handle it and absorbed the costs themselves. They now have a panel of Appraiser's who are happy to work with them, and the results prove it (less condition's, less hassles, more happy clients). In fact, I meet Realtors who say "It's going to "that company", good! At least I know we won't get some Appraiser from who-knows-where", and is the cheapest and fastest...

The fact that HUD just wiped out a large portion of their Appraiser's across the country (who aren't Certified) means all involved will be having more headaches since Certified Appraiser's are back in demand. Time for managment to wake up!
Posted on: 08th Oct, 2009 11:05 pm
well, ben, i am unable to crab about prospect's C2C knuckleheads any longer - i am no longer with them. check this out - on one of my orders, i put in my directions - in all caps, mind you - that if there were any issues with my order they were to speak to me before taking any action.

so next thing i know the order is canceled. i call them up to ask what it was that was difficult about the "speak to me" part, and they said "we left you a voicemail." sorry...that's downright stupid.

as for my favorite appraiser - with whom i have had a relationship dating back to the early 90s - he told me wasn't about to sign the newest form which stipulated what he could make on an appraisal.

what they'll end up with at prospect is appraisers with little experience coming from locales that are far from the subject property, and crap appraisals will be the end product.

management doesn't want to be awakened.
Posted on: 11th Oct, 2009 09:26 pm
George,

I am actually curious how this new mortgagee letter from HUD will work come January 1st. According to the mortgagee letter, the appraiser's fee and the management company fee must be kept seperate on the HUD1 settlement statement. This means they can no longer gouge appraisers on their fees to maximize their own profits. It also specifically states that the appraiser's fee must be reasonable and customary for the market. They will now be competing based only on their own fees against other AMCs.

How long will it take to go from fastest and cheapest to the AMCs wanting to charge a little bit more but claiming to have the best appraisers.

(Not that I am endorsing HUD's decision to accept a plan similar to the HVCC, but the optimist inside me wants to see the bright side)
Posted on: 13th Oct, 2009 12:26 pm
So far, I have no complaints. I locked a loan with a bank and submitted my FIRST appraisal request through their automated system. It went to one of those management companies which happened to be located 3,000 miles away. So, naturally I was concerned. However, they called me within a couple of hours of my submission to confirm the order. The homeowner was called the next morning by the appraiser who they sent the order to. The appraisal report was returned to me in less than one week. The price was slightly less than what I am used to seeing.
Posted on: 19th Oct, 2009 10:58 am
you were in the right place at the right time, eric.
Posted on: 19th Oct, 2009 11:05 am
Just because the report is cheap and you got the pre-determined answer you wanted does not make it a good appraisal. Case in point, look at how many good appraisals were connected to loans that went under. Now talk to the fraud investigators all over the country working for Freddie, Fannie and many others. The truth is there were many Appraisals considered to be good because they were fast and/or cheap. Speed and price has absolutely nothing to do with quality. If that is what you think quality is all about, I hope you choose your heart surgeon the same way. It is much why we are and will continue to be in a horrible mess.
Posted on: 09th Feb, 2010 07:50 pm
i don't fault eric for citing the speed and the price of the appraisal he received. i don't think that's what he was really addressing, anyway. it just so happened that when all was said and done, he found the price to be less than he'd anticipated. there's nothing wrong with that. and he also found the appraisal to have some value - that's what we all hope for. and speed is always a good thing - frankly, i've found that a good appraiser has the wherewithal to deliver speedily when the information needed to do a proper analysis is at hand.

you're being too critical in this case, i think.
Posted on: 10th Feb, 2010 06:29 am
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