An AMC friend told me he cannot get anyone in Texas to accept $450 fees for non complex FNMA conforming loan limits right now. He also said that in Alaska, he cant get any appraisers interested for less than $800 and three weeks turn time. That does NOT mean business is good! All it really means is that of those that have not yet dropped out completely; many have refocused their appraisal into non (loan) production assignments. In the very short term it is going to be a minor windfall for some few appraisers. In the long run it means one of two things MUST happen in an extremely short time span:

(1). Banks will have to become more realistic about “reasonable” costs and less greedy about what they pay AMCs as purported ‘customary’ fees.

(2). AMCs themselves will have to settle in to less competitive, more moderate fixed rates for there services—just as they have expected appraisers to do for the past six years. It is the ruinous price competition among AMCs that results in appraiser fees being pushed down. Just as appraisers need a certain compensation or the work suffers, so do AMCs. Banks have passed through (abdicated) their oversight responsibilities to AMCs. If they want cursory “reviews” (quick read overs); then pay $75 fee. If they want meaningful USPAP compliance reviews than $150 to $250+- will have to become the norm.

Study history. Economic principles can be short cut; side tracked, obfuscated and even lied about for a LIMITED period of time. We’ve about reached that limit. Supply and demand vs quality and price parameters have been stretched to the limits…and then some.

The FACT that lenders are only making QM loans that can be sold to GSEs, rather than making portfolio loans shows that they KNOW they cant lend their own money safely.

You already know what the response would have been from the tens of thousands of experienced appraisers who bailed out early on.