Quoting Fee/TT to AMCs
Appraisers, I had a revealing conversation with a clerk at an AMC last week. I actually received an email requesting Fee/TT, then awhile later a phone call about the same property, from a different clerk. I decided to call that clerk back after researching the property.
Conversation went something like this:
AMC clerk: Hi, this is James.
Me: Hi James, I’m calling about the Timbucktoo property, which I can do for you.
AMC: OK, I have that pulled up.
Me: First of all, I don’t discount my fee for anyone, including your AMC. Second, I can do the assignment, probably inspecting next week, but the DD will be the following week due to other assignments I have and the holidays. My fee for this will be “Y.”
AMC: slight pause, then a chuckle. That’s interesting. Other appraisers have quoted basically the same fee.
Me: Yes, isn’t it interesting that appraisers in my area actually talk to one another occasionally. We pretty much know what C&R fees should be in this region, and most of us do not discount. Generally most fees for basic subdivision homes fall in the range of “X to Z.”
AMC: Yah, that seems so. OK, I have this info recorded and will send it on to the lender.
Me: What was that again? Did I understand that you’re just collecting Fee/TT info from appraisers and then the response list is sent back to the lender?
AMC: Yes. If they get back to us, and like your quote, we can send the order along.
Me: Well, I hope the lender understands we appraisers take assignments as they flow in, and don’t hold time on our calendar under a presumption of getting an order.
AMC: laughs. Yah, I wish we could get the lender to move quicker.
My point in sending this message is to identify the REAL problem with mortgage lending appraisal order assignments: It’s the lenders who fiddle with the process and impact what appraisers are paid, and the overall timing. Lenders who use this procedure are SLOWING DOWN the loan processing. And it adversely affects appraisers.
Back in the day, not too long ago, before AMCs sprouted like mushrooms in a damp forest, the lenders had personnel in place to rotate assignments among their vendor appraisers in a particular area. Everyone knew what the fee would be, because it was pretty standard across the country – with known regional differences. (That’s basically what the Dodd-Frank C&R law was trying to do, before the Federal Reserve Board inserted the ‘other fee analysis’ option.) Turn times were generally acceptable at around one week, or at the most, two. Business relationships were also developed and appreciated.
Now lenders play AMCs off one another (because they often use more than one), and seek appraisers who don’t understand what appraisal work should cost (i.e., the fee), and churn reports out the door in far less time than should be taken to produce a quality product. Nowadays, there is almost no true business relationship between the AMC and the appraisers on their panel.
Think how much better it would be if the lenders would just say to the AMC: Hey you, we have an assignment in Timbucktoo, and we need the report back in 10 days or less, at an acceptable fee of “Y.” And by the way, Mr. AMC, we’ll pay you a handling fee of “A” to get this placed with an appraiser on your panel. Now goodbye, and just get it done.
Lenders are the ones responsible for this mess we are in, which includes many appraisers reluctant to do lending assignments placed through AMCs. It’s on the lenders shoulders. AMCs are really the small cog wheel in the entire process – an unfortunate necessary evil because lenders abdicated their appraisal ordering responsibility to outsiders, when they were not required to do so when the HVCC was mandated. Quite frankly, being an AMC is not a good position to be in now, nor has it really ever been.
Fortunately, some, but not enough, responsible lenders have begun to realize the fallacy of their ways. They have begun to jettison AMCs and are back to placing their own assignments internally, or perhaps by using a non-AMC portal. That’s a good thing for them, and appraisers.