I’ve received a few emails as of late about my my thoughts on HVCC (Home Valuation Code of Conduct) and why I hadn’t written or documented HVCC the way we did HR3915. The truth is that it slipped by me until I got up to speed on the ramifications of HVCC today, even though Paul covered it previously, here. I even remember reading his post, but for some reason the implications didn’t hit until the last day or so. While HVCC serves to do some great things for consumers and the industry, in its current form its negative aspects overshadow the good it does for agents, brokers, consumers, and appraisers.
On Wednesday, the 30th, the feedback period for HVCC is over, so now is the time to express how you feel about the flaws in HVCC. Since HVCC is a bill or legislation going through the Senate and House, it has gotten little to no coverage, whereas if it was a bill, I believe there would be a much larger discussion taking place online and off. Although I am acutely aware that a petition with less then 36 hours to gain momentum is not unlike throwing a life preserver to somebody who’s already 20 feet under water, I still ask in your support in signing the petition. Even though the feedback period is ending, this doesn’t mean that all ears will be closed.
HVCC Basics:
- Disables Brokers from choosing appraisers or having ANY contact with appraisers as these tasks are delegated to lenders. This creates a bias that shifts power to large institutions.
- Requires independent appraisers to join AMC’s (Appraisal Management Companies) where they are forced to pay 40% or more of their income to the AMC, ending the existence of independent appraisers.
- Since appraisals are not in the Broker’s name but the Lender’s, if you or your client needs to change lenders, a new appraisal is required.
- If consumers want to shop their loan, they must pay for a new appraisal, they cannot have appraisal reassigned. This creates a disincentive to shop for the best deal, which is never good for consumers.
UPDATE: Alamode Petition
Alamode CEO, Dave Biggers sent out this email this Morning:
Thank you for submitting your letter to Fannie, Freddie, OFHEO and Attorney General Cuomo yesterday. We understand you may have received a “bounce back” e-mail from one or more of them indicating your electronic submission wasn’t received. Trust me, they got the message.
Yesterday over 16,000 appraisers, mortgage brokers, agents and even lenders (178 of them) logged in and sent their opposition to the HVCC. Apparently the volume caused the servers at Fannie, Freddie and OFHEO to start shutting down. To their credit, Fannie Mae called us proactively and we believe we’ve worked out a compromise that’s easier on their servers, but we haven’t been able to reach technical contacts at OFHEO and Freddie.
We’ve queued all the mail however and will resend as soon as all three have their servers in order and are able to accept the messages and/or posts.
We were surprised that their mail servers coughed up so quickly. We had a little over 10,000 people sign up in the first six hours, and 10,000 messages each should be nothing to these guys. We handle millions of messages a day on our mail servers, with no impact at all. If someone sent us 10,000 messages over six hours, it wouldn’t even register as a blip on our volume monitoring tools.
Regardless, we’re also taking the “official” method and sending paper copies to all the entities. Right now, at more than 17,000 signers, that means over 68,000 pages to print (some span two pages). Last night we printed 55,000 of them and will keep up with the volume as it goes today.
Again, thanks to everyone for all the support. I’m confident we’ll emerge with a set of rules we can live with, rather than die by.
Trace is the founder of LeadPress and helps loan officers generate mortgage leads and learn with FREE Mortgage Tools.
Ironically, this was born out of appraisal fraud at Wachovia. In other words, a federally chartered bank gets caught with their pants down, so they pass restrictions on small mortgage brokers. You have to love having a strong lobby to protect you…
This seems like this hurts brokers a lot more than banks but only because banks are already meeting some of these requirements. For example at Countrywide you can’t pick your appraiser. And while it’s a real pain when you want someone you know is capable of appraising a very high end or unusual property and the system gives your appraisal to some hack instead I can understand why they do it. You can’t afford even the appearance of or potential for impropriety. Having been the victim of an appraiser whose interests were too closely tied to the Realtor who sold me property I can’t say I have a problem with severing that connection.
However, not being able to reassign an appraisal doesn’t serve any purpose that I can see. If the first lender has no choice or influence re: the appraiser than any subsequent lender wouldn’t either. The only reason to refuse a reassigned appraisal is if the appraiser is on the second lender’s blacklist and that shouldn’t be anyone’s call but the lender’s.
Forcing the appraisers to join some organization (like being forced to join a union and pay dues) and fork over that much of their income seems very unfair and will probably drive up the cost of the appraisals. I should think the appraisers would already be up in arms against this — seems like restraint of trade. And anything that increases prices creates a disincentive for borrowers to refinance which is of course bad for all of us. This legislation needs more work before it is ready for prime-time (or sub-prime time:))
Most appraisers I’ve spoken with have no clue this exists…… the very appraisers that will give 40% or more of their income to unregulated AMC’s have no clue that their profession may change drastically forever….. The key is that since this is an settlement it has received little to no coverage since it is is not a bill working its way through Congress….otherwise, I think there would be a much more vocal voice opposing the bad parts of this measure.
Regardless of appraisers, brokers, or agents, where are the consumer advocates? You have to pay for a new $300 to $500 appraisal if your broker isn’t living up to your expectations? Are you KIDDING ME? If your circumstances change and you need to change lenders for a different program, you have to buy a new appraisal?! Not only the cost that is involved, but the time is important as well…. many consumers have to take time off of work to meet the appraiser and doing anything twice without good reason makes no sense.
HOW MANY CONSUMERS WILL STAY IN A PROGRAM OR LOAN THEY DON’T WANT FOR FEAR OF BEING STUCK WITH THEIR LENDER BECAUSE THEY DON’T WANT TO CHANGE LENDERS OR PAY FOR ANOTHER APPRAISAL AND EXTEND THE TIME INVOLVED IN THE LOAN PROCESS? Why the shift in leverage towards mortgage companies / lenders? What type of consumer oriented “code” does such a thing?
My problem with this is that quality of work is going to suffer. These companies are like deaing with the DMV or some other government beauracracy because there is no competition. Need an appraisal updated by end of day? Good luck dealing with the appraisal management companies.
I almost had a $1.2 million dollar deal blow up over a crappy appraisal from a second mortgage lender that wanted to use their own appraiser instead of my guy who did it for the first mortgage. I wouldn’t have cared had they not sent some hick from west po’dunk to appraise a $1.2 million multi family investment property in the middle of downtown Chicago 50 miles away! His value came in too low because he picked the wrong comps. Only after threatening the blow up all their bank branches and pointing out the how bad the appraisal was done was I able to get it fixed and the deal closed.
All these new laws and regulations are doing nothing to protect consumers. If banks would simply start evaluating each file on its merits and go back to common sense underwriting instead of trying to automate and outsource everything to India and fit every loan into a rigidly defined box based on a nebulous FICO score, they wouldn’t be in this situation now.
Banks have gotten so efficient that they are inefficient.
I have updated the thread to show the Alamode petition and Dave Bigger’s email regarding overwhelming Fannie Mae and Freddie Mac’s servers…..
Even with apparently large numbers of the industry speaking up, I’m still not even seeing any coverage of this in the news or in the blogosphere…. amazing….it’s like it doesn’t exist, I’m thankful that Alamode has stepped up big time. Cheers to them.
read Radical….stuff’s happening all the time.
Trace, one important note about these changes is that it doesn’t affect FHA or VA.
For those of you interested in wading through a bit of legalese, TAVMA has sent a 28-page comment letter that really spells out why the code will create more problems than it solves.
Find it on the TAVMA website here:
http://www.tavma.org/images/tavma_comment_hvcc.pdf
Rick.
Is there any appraisal organization, or possibly A La MOde, who could show a few PSA’s on TV, showing what an appraisal is, and how this plan will harm everyone but the big banking boys? The Instutute is a waste, having ‘gone to bed’ with The Banking Industry, NAR, and peddling their own AVM software. They have sent most small appraisers down the river.
Thanks Rick, I’ve included the doc here: http://brokerscience.com/hvcc/tavma-weighs-in-on-home-value-code-of-conduct/
Trace, I do some blogging and articles for consumer-oriented mortgage lending sites. I’m going to get this info out there to people who aren’t industry insiders. Thanks for cluing me in.
There are good articles on AppraisalScoop.com.
Mr. Cuomo doesn’t want us to remember that he was on the board of AMCO – Appraisal Mangagement Co. His plan would drive the ordering of residential appraisals through AMCs.
I agree it will do nothing to protect the appraisers from unethical pressure or the public from bad appraisals.
Making undue influence on appraisers illegal would help. But then that would not be very lucrative for friends of AMCs.
Why on earth would you introduce a third party(amc) into the equation that is not regulated, does not have to have a state license, does not have to have continuing ed., and that will take 40-60% of the income from the very people who are state regulated, state licensed, and required to update their education. Makes no sense.
Gina, you can’t choose your appraiser at Countrywide because Countrywide owns the appraisal management company you use and forces appraisers who work with them to take the huge cut in fees. Countrywide is at the very root of the problem.
If anyone reads this, please send me an email and state the main elements of the HVCC legislation. Explain how it hurts the appraisal business. Thanks. (chessluv1@juno.com)
Mark,
For a good overview, you should read the original Code here: http://www.oag.state.ny.us/press/2008/mar/Code Final 3-2.pdf
And the introduction to the TAVMA comment letter here: http://www.tavma.org/index.php?option=com_content&task=view&id=141&Itemid=23
I don’t have time to do all the work for you, so in the TAVMA letter you’ll find 6 reasons the Code will fail to improve things and only make them worse and 6 ways it could be fixed to make it workable. TAVMA, in case you don’t know, is a trade group servicing Vendor Management Companies (VMCs). Some people don’t like them, so feel free to solicit other opinions elsewhere by following this link: http://www.tavma.org/index.php?option=com_content&task=view&id=141&Itemid=23
Good luck.
Rick.
Note: Per his request, I have also mailed a copy of this to him at the address in his post.
Sorry everyone but youd should be carefull waht you ask for, appraisers have been crying for somethig like this for years (no lender presure) and as far as readdressing appraisals this has never been alowed (see FDIC & USPAP).
I was wondering if there was a vote on the Dole amendment to the HVCC legislation. Does anyone know? (chessluv1@juno.com)
Senators want hud statements to reflect what the appraiser is paid & what the AMC steals from Appraisers. If you realy want to have independant appraisers then you can’t have AMC taking 50% of their fees. If AMC after being paid by lenders can rotate appraisal orders to the next appraiser based on experiance, turnaround time, quality of work based on independent professional appraisal reviewers and not by fees charged. Then AMC could protect appraisers independance from realtor, mortgage broker and lender pressures to come up with any particular value that is not supported in the market.
When congress passes the HVCC or Home Valuation Code of Conduct, the industry will after all the appraiser training of the past years go a long way to protect consumers from lenders real estate fraud and misrepresentations. You have to protect appraisers from being placed by lenders on “silent blacklists” or do not use lists without any due process of law to defend themselves from mad lenders and mortgage brokers false and sometimes fraudulent allegations. Remember Appraisers only report market conditions, they do not kill their deals.
As an appraiser of almost 20 years I can assure you that in my neck of the woods appraisers are up in arms. While I know the institute gets a bad rap on certain things, I think most people would be impressed at the letter sent by the Institute in opposition of HVCC. I don’t have the link but it is on the website.
AMC are THE cause of this situation. I have dealt with mortgage brokers and banker for my entire career and can honestly say that I have more corporate bankers ask me to “overlook” things or push values than I do mortgage brokers.
In my opinion, the real bad guys are the underwriters who more times than not give mortgage brokers encouragement to push bad deals so they can get paid.
I say to clean up the underwriters and get some people who know a little something about what they are underwriting and the bulk of the problem will go away.
No need to respond to me – I just wanted someone to know that not all appraisers feel the mortgage brokers are the bad guys.
The whole concept that AMC’s / VMC’s are going to prevent appraiser fraud and increase quality is ridiculous.
1. They claim to “review appraisals” for accuracy…..In my state it is against the law for a person who does not hold a current state license to do appraisal review. I have been called with some of the dumbest questions by AMC’s where they did not understand what the report asked for.
2. How can someone 750 (or more) miles away review my appraisal and determine if the information is sufficient, accurate, or the estimate of value is reasonable which is what some claim to do.
AMC’s have 3 requirements – how cheap will an appraiser do an appraisal?…How fast can he turn it around?…..Will the underwritter accept the estimate of value? Anyone of these 3 can be reason to remove an appraiser from the panel. Don’t think if a lender complains about an appraisal the AMC’s won’t bury that one and order another to keep the cash cow milking so to speak.
Over the past 4 months I have had AMC’s ask me for comp checks before completeing the appraisal. One asked me to charge the home owner $100.00 above my customary fee and send it to them (but let the owner believe that it was all for the appraisal). When I wouldn’t do it they just assigned it to someone else (this was an FHA assignment)
Appraisers are taking the blame for everything, as perhaps many should, but AMC’s will do nothing but cause good reputable appraisers to get out of the practice because they can’t make a living at the dicounted prices leaving the appraisal profession to the very crooks they are trying to protect against.
its crazy how many new restriction are being put on the entire industry. But then again 2 years ago was like the wild west
Just a quick note about “re-assigning appraisals”. You have never been able to re-assign an appraisal. If you have an appraiser who is doing this it a problem. See USPAP AO26 at the appraisal foundation.
Also, what about Truth and lending on the AMC’s. If the actual appraisal i costing $200 and the AMC is getting $150 for a total of $350. Should they not be listed seperately on the HUD?
I’ve read most all of this, and great points have been made – most of which I professionally agree. I don’t need to redundantly say the same things my colleagues have said in my own words with my own twist. I own an appraisal company in Texas and have been appraising for roughly 11 years. I’m well established with numerous ethical clients that have taken years to obtain. Now my family and I are worried that HVCC will put us out of business, or at best bankrupt me because I’ll have to take a 50% pay cut. We’ve already down sized and had to get rid of receptionists and offices, and have moved into home offices due to the increasing costs of gas, insurance, and the general cost of doing business. Appraisal fees have been virtually the same for 11 years and we have not received any cost of living increases to keep up with the “COST OF LIVING!” Now we’re supposed to take another pay cut? How are we supposed to do business!?!? And all to correct a problem that doesn’t exist!
While there are problems with the appraisal industry (as in every industry), THE MAIN problem IS NOT the appraisal industry. It’s the lending industry.
Does it really take a genius to figure out that when you sell a home to a buyer with questionable credit, nothing to put down, and provide them with 100% financing that you’ve doomed them to failure unless they experience personal financial success? Or that when you give them 100% financing on an ARM that you put a nail in their coffin? You can’t refinance them at $100%, and they can’t sell a home with no equity because of the 6% to 8% realtor commissions. What do you think the home owner will do when their taxes go up? Or when something significant needs repair or replacement (like an air conditioner, furnace, or roof)? Or when they lose work due to any hardship related circumstances? They give the home back to the bank. And now, HERE WE ARE with more foreclosures and vacant homes than ever before in our history. Most of those homes were worth what they sold for when they were appraised. Today they’re not. Not because of fraudulent appraisals, but because the market is flooded with foreclosures and short sales.
Hmm I know how we’ll fix it. I have the solution! Let’s create an AMC (as another unnecessary level of bureaucracy with an empty pocket to fill) that will steal half of the fees from the appraiser so that lenders can no longer communicate with the appraisers directly. That will fix everything.
NOT!
What are we paying the people that come up with this nonsense for?!?!?!?
Apparently the HVCC will be implemented in 2009. As an independent appraiser for over 14 years, the clients I worked hard to keep will all be lost, my income will be reduced, my workload to maintain a reasonable income will increase. The wholesale lenders which my clients currently use are forcing my clients to use “Approved” management companies. These “approved” management companies charge at least $400.00 a report, far more than what I charge now, and pay the appraiser less than $200.00 per report. They demand extremely and unrealistic turn around times and do not demand quality work. Alamode has been hyping there Mercury Network as a savior to appraisers like me. It is a lie!!! They are not part of the approved management network and if they are used the lenders receiving the appraisals from Mercury will be charged more than $300.00 for a “review” because they are not part of an approved network of AMC’s. Any appraiser using Alamode software should seriously consider changing appraisal software that is less expansive and that does not mislead its clients. Appraisers need to unite and demand a minimum fee for AMC work or we will all be better off serving milk shakes at drive thru windows. I want to thank New York Attorney General, Andrew Cuomo for potentially putting me out of business and putting the future of my three children in jeopardy of a major reduction in quality of life for me and my family.
Great idea Mr. Cuomo!! Punish the appraisal management company that caused the problem by providing them with unlimited future growth and control over the mortgage lending process and putting professional appraisers out of business!!! You are assuring continued mortgage problems in our future.
For the past 9 months I was also under the assumption that HVCC was a plan for political gain by Andy Cuomo. Although it is just that…it goes much further. Andy was simply the puppet (play along for pay? or play for a bigger office? you be the judge). I’ve been studying this for months now but I’m just beginning to learn that the puppeteers (those with true power…and those with something to gain) are the HUGE appraisal management companies and HUGE banks. Banking had one agenda. This was the prime opportunity to put mortgage brokers out of business….so they jumped on it. Putting appraisal companies out of business was never planned. The huge AMCs obviously had something to gain…billions of dollars. There were several ways around the current format of HVCC. Alamode had one easy solution and they would only charge you $10-$20 of the appraisal fee. Another answer was for appraiser’s to subsidize the cost of the distribution network or “firewall”. Either would have been an easy solution to the problem.
HVCC was an obvious way for banks and AMCs to gain billions in market share. The fact that appraisers had no organization and (or) voice to fight it made it even more hillarious.
In short; don’t be naive like I was. I’ve been blaming this on Andrew from the beginning.
Banking + AMCs + Politics – Competent Appraisers = Billions In Profits
Where is the Appraisal Institute ? I mean I know they also have there own AMC but I thought they were there to look out for us? With USPAP don’t we already have goverment support and or restrictions on our actions. Why was Cumo even allowed to stick his nose in our business? Just watch come May 1st 2009 the AMC’S will go 50/50 on fee splits because they know if we don’t like it we have no where to go. Once again we take to fall for the banks screw ups.
Kevin,
I have not worked with any AMC yet mostly because of the unfair fee split. You say 50/50? Who is paying that??? Most charge $400.00 (More than I currently get) and pay no more than $175.00 but send work to those willing to do it for less. There are “appraisers” that will.
Chris
Just think about it. When the shops start splitting the $175 to $200 with the newbees. there going to go out and offer to work for $150 thinking that’s a 50% raise! All the work that’s been done to establish working relationships with lenders is out the window come May 1st. A few bad apples are killing it for all the good appraisers out their. Who the hell is Cumo to force this on the whole nation because he has a problem with someone in New York?
Cumo is a, brace yourself, politician being paid off by big banks and management companies.
Imagine that! An unethical politician after his own agenda and motivated by greed!
Thank you for providing this forum for discussion. It appears that HVCC will pass through a 40% reduction in revenue to independent appraisers. One way to inform congresspersons of our dislike of HVCC is to contact their offices by phone. We as appraisers need to continue to register our dislike for HVCC legislation. Please email me any more efficient methods for registering dislike (chessluv1@juno.com). Mark
Any followup would be appreciated.
First: We need to start a class action law suit against Fannie, Fredie and Commo for ” the restraint of free trade”. All the work in getting clients is taken away with one useless mandate. No other career field is told who we have to work for, how we work our associates, and that we can not bill at the door, and must go back to waitings months to get paid by lenders. This is anti trust violations at it’s worst. They are distroying small business all over the country. If the government didn’t allow a used car sales person to become a certifed appraiser in as little as a year none of this would be a issue.
Second: we need to set up a Realtor Type organization for appraisers so that we can collectively fight this type of unfair mandates. Third: For just one time I would like to see appraisers band together and reject working for AMCs. If appraisers wouldn’t work for these cut rate companies, they could not exist as all they would have is the lower quality appraisers.
Frank
HVCC is good for many reasons. While Cuomo’s resume may beg question, this regulatory action has been through great scrutiny and revised thanks to many of the pro broker personalities featured in this blog. I didn’t see much to acknowledge the very real problem of mortgage brokers ordering appraisals. When value is shopped and the control of future work placed in the hands of brokers, we now know what happens. AMCs are necessary because appraisers have not organized nor filled the business need at the lender level. HVCC will stick and there are solutions. Have your wholesale reps check out http://www.AppraisalBridge.com February 1st. Technology and street level appraisal expertise can come together to make the appraisal component to lending work better than ever, and without the mistreatment of appraisers.
Re: The above comment
So appraiser’s have failed to fulfill the needs of the lenders? Oh, that’s what happened?
What you’re saying is this Mark:
We failed to make the offer to banks to directly subsidize both their ordering and appraisal review processes so that they could trim those costs from their yearly expenditures.
Appraisers Repeat After Me
“SORRY ‘BOUT THAT”
Here’s a novel idea: How about you offer to subsidize these banking costs out of your pocket Mark. You might even offer to throw in a trip to the local strip club for the bank president and the VPs.
Jesus man…think before you speak (or should I say think before you market your company on here).
Re: Frank Rowes Lawsuit Posting
This will happen Frank. A class action lawsuit was just filed in Washington State against countrywide which makes many of the same claims that appraisers are making against AMCs. A major law firm is charging Countrywide/Landsafe of racketeering.
The National Association Of Mortgage Brokers is in the process of filing an injunction (HVCC) and is also pursuing a class action lawsuit to stop it. Realtors and appraisers are welcome to join in the fight.
David,
I identified myself and I’m certain that my comments represent truth. Perhaps it would be better to say that appraisers failed to unite, leverage scale of economies, to work toward solutions from our side of the equation. Lenders aren’t looking for subsidies, the are looking for simplification. Appraisers who despise banks…interesting business model. Good luck.
Good idea Mark,
Market you web site or service to appraisers then insult them and expect a good response! I am sure the big unveiling of your site will be overwhelming to all the appraisers you are insulting.
Interesting business model! I woudl say good luck but I would not mean it.
Re: Mark’s Last Response
I’m not sure why my indentity is so important but I certainly have nothing to hide. My full name is stated above. I can be reached at 859 252-1000 if needed.
I have been a certified appraiser for 17 years. You are quite correct when you assume that I despise banks (along with AMCs). These two groups are responsible for forcing HVCC down our throats by means of an ambitious but clueless politician by the name of Andy Cuomo.
HVCC in it’s current format solves only one problem. How to enrich both banking and AMCs by billions per year at the expense of the appraiser. It perfectly solves that problem. Interestingly enough it was presented under the pretense of “saving borrowers from exploitation”. A very interesting claim since AMCs mark up the cost of the appraisal by around 25%, pay appraisers around 40-60% of the “new” appraisal fee, then lie to borrowers on the HUD-1 by saying it was all appraisal fee. If that’s not enough, consider the fact that banks own most of the large AMCs, thus making them profit centers at the expense of the appraiser and the borrower.
I must say that I am excited about this weeks class action lawsuit originating in Washington State. A very credible law firm is now charging Countrywide Home Loans/Landsafe with racketeering (for the above mentioned reasons). I am also delighted that the media has finally taken an interest in what banks & AMCs are up to. The Washington Post and Chicago Tribune covered the story in great detail one week ago. It showed up on AOL yesterday.
Show me single group of professionals or nonprofessionals who would be willing to set silently while the U.S. government creates a mandate that they must first surrender their past clientele and then surrender half or more of their current income. Do you think attorneys or politicians would agree to a similar overnight pay cut?
Appraisers are finally beginning to wake up to the fact that their careers are at stake. I am amazed at the amount of hostility online regarding this issue. This battle is just beginning. Although appraisers have no organization (of significant size) that will support them they are beginning to organize and seek legal representation. Don’t count on the Appraisal Institute to do anything however; they have their own agenda.
The National Association of Mortgage brokers are in the process of filing an injunction against HVCC. They are also preparing a class action lawsuit to fight it. They welcome mortgage brokers, Realtors, & appraisers to join them in their fight. This is a group of signicant size and it’s also the best way to stand up to HVCC at this point in time.
Appraisers have four options at this point:
Decline AMC work
Demand full fee AMC work (on your schedule)
Fight HVCC by joining the NAMB lawsuit
Disolve your business
If appraisers do nothing else they should alert as many appraisers and media sources about how HVCC will ruin their business. Refer both to the recent article in the Washington Post and the Washington State Class Action Lawsuit. They are both excellent sources.
Gentlemen,
Have you considered that angry appraisers who feel forced to deal with AMC’s at cut rates will render numbers off the conservative end of the developed range and the banks won’t have adequate value to make a loan?
No loan = No profit . Could shorten the AMC’s life expectancy.
I really enjoy reading the posts that tell us to accept the $200 fee and just work twice as hard to do double the appraisals. I am sorry, I have been in this business since 1985 and I am not going to accept fees lower than I made then. Why should I? Why should I pay for the AMC’s to be in business? Why should I lower my standard of living when the cost of doing business and living increase every year. I know my doctor, plumber, electrician, school teacher, etc, would laugh if told they would have to lower they pay to below 1985 pay. The problem lies in the banking/mortgage industries that are paid a percentage and not a flat fee for every loan closed. We are at the bottom of the food chain in the real estate world and are getting pushed further to the bottom. I don’t do any work for AMC’s and at the moment trying to decide whether it is worth my time to stay in the business
Angie,
I agree and feel the same way but in order to continue in this field there is no other choice. I would actually be happy with $200-$220 fees. I am just starting to look into “joining” AMCs because I have to. The work I get from lenders that can still order from me is not nearly enough to keep me going. It is all political and greed. Appraisers have never organized so we get stepd on. There is no cost saving to using AMC’s as they say since the fees are more than the typical appraiser ever got anyway. A friend of mine does AMC work and he said it is ok for him. He only gets work very close to home so there is no extended travel whcih cuts down on costs and time to complete the report. He does not make the same money I do but is at a comfortable level. I guess that is what I, or we all have to settle for.
Good luck.
Solidifi manages a national network of appraiser partners and we’ve wholeheartedly embraced transparency from day one. Our appraiser partners set their own fees and we pay them 100% of the fee they set. An administration fee is charged above and beyond the appraiser’s fee covering the use of our technology, order management processing services and administrative check for appraisal completeness and compliance, and appraiser payment/centralized billing. Solidifi offers to itemize the actual appraiser’s fee and our administration fee for those interested in reporting as separate line items on HUD1 closing statements. We have no vested interest in the appraiser assigned to an order since our company’s profit is tied to the administration fee. It is sound business practice, however, that clients consistently receive compliant, credible, defensible appraisal reports completed by appraisers possessing geographic competency and the licensing and experience levels that meet our client’s requirements. Our business model has been effective for lenders and appraisers, and our proprietary technology provides the insulation that supports appraiser independence.
To whom it may concern:
Marianne Angarola comments sound like an AMC wrote them. She doesn’t mention what it’s like to deal with her AMC when they try to rewrite her reports because the lender that has the contract with her AMC is telling them what they want. Of course because the AMC has a contract with her AMC there not really an indepentent company anymore. Also when she tells her AMC she works only for full fee they tell her ” sure less what we take off the top to cover our expenses”. Which means she’s not making the same amount she did before the AMC stuck their greedy fat fingers into our pie. This business is not better because there are now going to be AMC’s running things. Just you wait come May 1st when they know their the only show in town they’ll take ( without asking) 50% or more because they know with out them you get nothing. To hell with the AMC’s and all the stupid Marianne’s out there.
Appraisers and title agents are the niggers of the real estate world. Don’t be offended. I’m taking license with the title of John Lennon’s song, Woman is the Nigger of the World.
Todd, if you feel the need to edit this, I won’t be offended but I hope somewhere, sometime mortgage lenders and realtors will understand the risks, training, level of professional expertise and hard work that go into trying to create the product we have been trained to do while being asked to satisfy every whim all with the expectation that we will produce it for a lower and lower and lower fee and be happy to get the order.
I saw a PAR addendum this week that make me want to puke. It had a list of so-called services the realtor was providing for the buyer, like ordering title insurance (faxing us the agreement?) and they were charging $150 bucks. On the same transaction they charged the seller $250 for administration all while getting a commission of $10,000. The appraisal went through a lender ABA AMC and the buyer paid $350 for the appraisal. I’ll bet the appraiser made $200.
We used to consider lenders and realtors our professional colleagues. Can we not find some way to return to mutual respect?
Atlas will shrug someday and if you think computer generated title and appraisals will work then so be it because someday we’ll find more peace flipping burgers then being pooped upon and told to enjoy licking it up.
Still shaking my head that I need to suck it up and do double the work to make up for the lower fees. I work approx. 50 hours now to make somewhere between $65,000 and $70,000, charging at least $300. It takes almost a day to complete a job, doing a thorough job which entails actually checking zoning, pulling subdivision plat, etc. , doing research, and completing the form. I received an order on Friday for a job that I would have quoted at least $450. It was reo-owned property requiring a additional time researching listings and completing the additional form. The fee $190. I had to turn it down. I still have to spend the same amount of time on this assignment, doing the inspection, measuring a 5,000-6,000 SF house, researching the subject and sales, completing the form, and doing the additional research required to complete the additional form. Chris, you are right. Until we appraisers have one voice and an active PAC like NAR and NAMB do, we will always be at the bottom of the real estate industry. Funny enough, when value were increasing, the mortgage industry utilized AVMs to say our values were low, now they are using them to stop people from accessing their HELOCs and saying values have decreased regardless of the appraisal, because not all markets are declining.
You hit the nail on the head Angie. The new appraiser’s solution to HVCC and the 1004MC is:
Do twice the work (1004MC) and then give 1/2 of your fee to the AMC.
It doesn’t quite make sense but that is exactly what most appraisers plan on doing.
Here is another example that illustrates just how lazy our “appraisal organizations” are: The only REAL opportunity appraisers have to fight HVCC is join in the HVCC lawsuit created by the National Assocation Of Mortgage Brokers.
To me, that speaks volumes about those classy organizations that sell you the right to place a few letters behind your name. Why would anyone choose to willingly belong to one after this has happened?
I read a few weeks ago that AMC’s are not the only option to be compliant with HVCC. If your company has a “firewalled” person in their company that is not involved in the loan process at all ordering the appraisals then they are compliant. They realized that the use of AMC’s could have additional charges which would be passed on to the borrower, which was not their intent. HVCC would make appraisers the only industry that is not allowed to engage in free market trade. We just become a name on a list, where someone who creates poor reports, poor customer service and turn times would get just as much business as someone who creates high quality, defensible reports and has great customer service and turn times. How can that kind of restriction in any way be constitutional? We appraisers are under USPAP, which is state law in my state and covers all the things HVCC is trying to do. I break the rules I break the LAW!
Chris- So you recently started looking into getting on AMC’s fee panels? I( too looked into it, albeit for a different reason. What I discovered is the AMC’s that actually have appraisals are not accepted new appraisers. So you for those who waited in hopes that they could still make enough money to warrant staying in the industry it is too late. They now have no choice but to move on to another career. The other thing I discovered is the AMC’s that are accpeting new appraisers have lowered the fee an average of 20% since may of last year. Could this be a trend? I guess we will find out soon.
We have chosen to close the doors to our appraisal business on March 31, 2009. We’ve been full time residential appraisers for 17 years. From speaking to banks we’ve already learned that banks refuse to pay extra for the 1004MC. We refuse to work for AMCs that don’t pay full fees and we refuse to complete the 1004MC for less than an additional $100 fee.
Over the past 12 months we have fought against HVCC on a daily basis, writing to congress men & women, meeting with them, writing to the media to obtain coverage of this fiasco, writing to every blog imaginable, writing to law offices about the possibility of a class action lawsuit, and warning other appraisers about what was coming. I can honestly tell you that nobody cares about this except appraisers. For those of you that haven’t figured this out yet.
Think Little Bighorn…Think George Armstrong Custer. If ever there was a LAST STAND FOR APPRAISERS, this is it.
At this point in time only two things that could save the profession:
A CLASS ACTION LAWSUIT FOR APPRAISERS ONLY (forget the NAMB’s suit…Sue to be compensated for the loss of your career and future income)
A LONG TERM NATIONWIDE RESIDENTIAL APPRAISER STRIKE
Air traffic controllers decided to strike in the early 1980s and fully intended to cripple the airline industry. They were outsmarted by the government however and many ended up losing their jobs.
Both of these solutions virtually guarantee:
NATIONAL NEWS COVERAGE
National news coverage means that both the public and Congress will be forced to pay attention to our situation.
Ask yourself this: What is the worst that could happen to you? You end up losing your existing clients and your appraisal career? Friends…the bad news is that you’ve already lost both.
Even though we will be leaving the business for more profitable business ventures we fully support appraisers that are determined to pursue either of these strategies.