a recent email and my response - what do you think?

From: xxxxxxxx
Sent: Monday, February 22, 2010 10:29 AM
To: Mike Lay
Subject: HVCC (Sent via Activerain)

You've received a contact message from your Contact Form on the ActiveRain network.

Mike,

I just read your letter and think it is great. Did you receive any response? I would also like to know if you are currently doing anything to fight the HVCC? I just received a link to sign a petition against the HVCC. The link is http://www.hvccpetition.com/ . I am trying to have as many people as I can sign it. My husband has been a real estate appraiser since 1992 and in business since 1995. We have lost all of our customers from over the years and have been busy filling out applications to get on AMC lists. Not suprisingly, we haven't received much orders. Apparently we didn't list our fees low enough. The whole purpose of the AMC is to stop corruption, but instead it has created another kind. The AMC's are the only ones benefiting from this horrible code!

Thank you,
xxxxxxxxxxxxx
Pennsylvania

Hi xxxxxxx,

I think at this point the HVCC petition is virtually worthless.  The AMC's have picked up the vast majority of the business from the large lenders, who have realized they have virtually no liability anymore by using that model.  The HVCC will likely be sunsetted next year, but at this point the "old" model is not coming back.  Appraisers who remain in the mortgage side of the business will be working for substantially reduced fees and at the whim of the management companies.  Only a lucky few will be able to maintain customers willing to pay full fees and wait for 5-7 day turnarounds.  While this all stinks from a financial POV, you have to also keep in mind that it has been coming for a while - due to appraisers arrogance (long turn times and high fees based on "relationships" that also fostered inflated appraisals), and a refusal to accept that the world is no longer willing to wait for information; we want to know what the house is worth NOW.  With the amount of data growing exponentially and the quality of data improving daily, the AVM models are becoming more accurate.  At some point the only job of the appraiser (or whomever the companies look to hire in their place) will be to measure and observe the house and input the data so that their models will spit out the value.  Don't believe it?  See this post.

If you want to stay in business as an appraiser AND make a decent income, you need to either find local clients not using AMC's (community banks that do construction loans, for example), credit unions, or the occasional larger mortgage lender that is a correspondent lender (funds their own loans) and handles appraisal ordering in-house.  There are several AMC's that pay decent fees, but they are hard to get into since everyone else is fighting to get on their list.  And of course, from a business perspective they would be stupid not to start reducing their fees to the appraiser, since so many want to work for them - basic supply and demand.  Otherwise, try to get legal work (estates, divorce, etc), market to realtors for pre-listing appraisals, specialize in some niche that no one else does,  or else be prepared for a severe pay cut.  Welcome to 2010...

Mike Lay
Appraisal House Texas
Serving Austin, San Antonio, Houston, and Dallas/Ft. Worth
T: (512) 785-5149
T: (800) 497-2660
F: (800) 497-2606