LSI Fees – Absolutely Criminal!
We used to do a lot of work for LSI back when they paid semi decent fees that were only about 10% below the competitive norm back around 1992. I think the norm was around $300 and they were paying $275+/-. In late 1992+/- they cut back to $235. We lost a few people but most stayed. Bear in mind the appraisers were being paid on a fee split. I think they got 50% of the firms fee. I was on salary for QC review and teaching work plus a split fee for field reviews. Back then it was much simpler to write up a report.
Our guys invariably worked from 12 to 16 hours a day and most did two appraisals a day. Their comps were pulled for them and given to them with their assignments back then; and the appointments were set up for them. Even so, these guys broke their backs. Reports all had boilerplate templates where all the appraiser had to do was delete a word here, or add one there to “localize” it with some degree of relevance. Highest and best use was almost always assumed to be existing; unless I caught it as something potentially different in the review process; or they brought up unusual conditions before the write up.
Once, the in house Chief Appraiser at LSI even came out to see us from Pennsylvania to thank us for saving their butts on a direct probable loss of $250,000 when a high powered dishonest seller tried to buffalo them into thinking his $500,000 house was in fact one of the nearby $750,000 models. Well, they said they came out to see us, but I think it was because they either wanted to see Disneyland, or because our owner always sent the cute receptionist with free tickets for everybody to go to Universal City. Back then, we were very high volume appraisal mill for them. I usually had to quick review 25 to 30 reports before 11:30 AM and then another 10 to 20+/- before 2:30 every day. Do the math. We billed them about a quarter of a million dollars every month. Our guys mostly worked seven days a week until they completely burned out and needed a few days.
Then LSI lowered the gross appraisal fee to $189.
My salary disappeared and I was offered a fee position (No, but thank you!). I had options. My former trainees and lower license level appraisers did not have the same options. Many had higher degrees, but English was not their native language and without help, it showed in their work. Bear in mind these guys were only getting $94.50 plus mileage per assignment. One went back to driving a taxi. One went back to his native country where he was a nuclear engineer.
When I next checked on them somewhere in the 2000 to 2010 era, I think I was told they were only earning gross appraisal fees of $175 and had 48 hour from inspection to turn reports in!
Today I asked a friend of mine to contact one of the older associates and was told he was still working for LSI, “Well it’s not LSI anymore but it’s the company that they turned into”, I was told. My friend couldn’t remember the name.
“How much are they paying these days, gross?” I asked.
“You won’t believe it” was the reply.
“Still $175?” I was only half heartedly joking.
“NO! That’s CRIMINAL!”
“Maybe, but they are only getting $165 per appraisal now”. But then he also has to pay some kind of processing or uploading fee too.
IF ANYONE that reads this in ANY state has first hand knowledge and confirmation of the appraisal fee being this low I would sincerely appreciate you emailing me the particulars. I think I may have just found the Guild’s newest “project”.
I’ve already FOUND their new name. As soon as I can provide proof that the fees are as low as I’ve related here, I’ll publish it for all to see, and to avoid. Anything I can do that starts a class action suit against them; including trying to get the Guild behind it, will be done. These may be THEIR ‘customary’ fees, but they are by no means ‘reasonable’.
They are one of those huge firms that offers all in one settlement and closing services. In fact you have to look fairly hard to even FIND appraisal services listed on their site…but they ARE listed.
Any first hand info (meaning you were offered these fees; and approximately when), please email to me at firstname.lastname@example.org .
Absolutely CRIMINAL, but only in the dishonest politician kind of criminal. Not the honest kind that goes up and just robs people without all the pretense.
I wonder if the name change was to reflect their more inclusive services; OR because they turned the reputation of the old one into a pile of steaming pony loaf?
If YOU have a similar situation, it is WAY past time to join the Appraisers Guild! Please contact AGA Jan Bellas at (301) 220-4100 or email to JanBellas@appraisersguild.org
8/29/2015 – Correction time! I personally communicated with the discussed appraiser in my article. He said the fee he gets is $180 vs $165, though he didn’t say if that was before or after upload fees. He also said every time he tried to increase his fees above $200 the work just dried up and stopped.
FYI, I also received personal email from a Florida appraiser who declined to be identified. He said anyone making the claim my friend made is either a liar or is only worth that much. Said he’s worked for them (LSI) since ’86 and gets close to the normal fees he charges his non AMC customers. He said he gives them a “small discount.”
No specifics about how much he charges his non AMC clients OR LSI of course.
Folks, I’m not here to pick fights, or engage in them with individual appraisers. I AM generically on the side of all appraisers tired of crappy working conditions and fees. Like all of us here, I discuss what I believe to be true among my peers. If shown to be wrong, I correct it. So far re LSI, no correction is warranted. I KNOW from past personal experience how poorly LSI pays appraisers. The only issue is whether they have continued that terrible fee history into the post Dodd-Frank world.
The invitation still stands. ANY appraisers out there that are either receiving low fees; required to conform to unreasonable turn times, told they must not include invoices, or disclose fees actually received please let us (AGA) know. Same applies if pressures or prohibited threats are used to get you to change values or violate other aspects of USPAP.
IF you would be interested in participating in a class action with no fees to yourself, except attorneys split if/when we win please let us know. IF and only IF enough individual appraisers indicate a willingness to participate and that have at least one instance of being paid less than C&R fees (or other abuse), we’ll proceed based on the proof we can present in accordance with the advice of any of the attorneys involved.
You do NOT have to be an AGA member to participate in this; though we will obviously ask if you are interested in Guild membership at some point. At NO POINT is membership anticipated as a requirement to participate in the class action (unless some attorney tells us that is required-which does not seem probable at this stage). Each states laws are different. Federal issues may also have their own special requirements.
Until you specifically authorize any attorneys to act on your behalf, your name will only be disclosed outside AGA, & possibly OPEIU to those same attorneys so that they can contact you to dot the legal ‘i’s, and cross the ‘t’s. I’ll play lightening rod and take the heat for trying to organize this. I’m assuming my conventional lender work will dry up shortly. A note of caution to any lenders contemplating that. I DO get access to the blacklists. Think it through.
Unless and until then all I anticipate being needed is; Your name, email address, state, a phone number, AMC Name; Lender name and fee offered (or other abuse) so we know how many people are potentially involved. I honestly do not know what the numerical critical mass is.
The B of A / Landsafe case they involved 365 claimants in the class. The attorney I spoke with said obviously the more involved, the higher the final fees. Don’t sign on looking for a financial windfall. CAs rarely make anyone rich (beyond the law firms that advance all the costs), but they ARE helpful in ending abusive conditions. Isn’t that the end goal anyway?
OK, we have ALL seen enough complaining… heard enough stories of abuse…talked about boycotts…formed coalitions…and even had a few small but important legislative victories, but now, respectfully, it is time to get off the proverbial pot and do something meaningful.
“Why doesn’t ‘someone’ DO something….? Well, now that we ARE seriously trying to, who is going to tentatively commit to participating? Do we get 100 people? 1,000? or 80,000?
Email either email@example.com or myself at firstname.lastname@example.org. IF interested in AGA membership let us know and we’ll get back to you right away. If not, we will still get back to you as soon as attorneys let us know what the next step is. Thank you all, and please wish us luck!