Can I quote you on that, AMC? HVCC take heed....

I decided to post this here as well - as it seems it is needed..

Just Think About It For A Second...

I have been worked with Lenders, AMCs, Appraisers, Realtors, and other real estate professionals for the last 10 years.  I believe that the HVCC is a GOOD thing.  Why?

My reasons are twofold.

As a broker and former Realtor and Appraiser, I have dealt with extensive pressure from the BUYERS to meet a value which in turn, I unintentionally put pressure on appraisers, even thinking of talking value ranges.  Large lenders always questioned value and in turn I had to deal with the go between with the appraiser on these questions.  Many times this compromised my integrity as a Broker.  Many times I believed that if I didnt have someone who hit a specific value, I would LOSE REFERRALS from current clients. 

Many people blame AMCs.  They consider that thier ungoverned hands become dirty from client pressure.  Doesn't all of ours?  If you as an appraiser can say at no time you have felt and even succumbed to the pressure of valuing your properties between 2002 and 2006 then you are lying to yourself and everyone else.

What is to say that many appraisers didnt get these great relationships with brokers and direct orders from lenders BECAUSE they 'played ball'.  I beleive many appraisers, if they only offered unbiased opinions, would have no business.  Brokers and Lenders want appraisals that make deals work.  That is the bottom line.  No deal, no meal.

On the other hand, when I started using a trusted AMC (LSI) I felt a load of pressure lifted.  They were the conduit from which all of the pressure I felt could be flowed through.  The AMC has Quality Assurance groups DEDICATED to quality only.  If your value is supported, no problem.  If a value came in low, and the client was upset, they DEFENDED the appraiser!  Imagine that!  Why would they do that?

1. If they dont provide a quality appraisal first, they would have no business.

2. If they didnt defend their appraiser's appraisals, what does that look like to the quality of work they are providing as well?

3. They provided causal information to the lender that only they could explain in laymens terms. If the lender was still under pressure to make the deal work, they would order a second  or review appraisal.  (and review appraisers will tell you they are the cream of the crop) Imagine that as well!  More work for more appraisers.

All of the calls and emails that the AMC's  focused on you are by their client and vendor reps.  They have very little if any call on whether your appraisal is quality. They just want it in on time.  Again, if you didnt provide timely reports for your direct orders from Lenders and Brokers, do you really think you would still have their business? No!

Yes the turn times are slightly tighter.  But FROM EXPERIENCE it takes 2 and a half hours tops to complete a difficult assignment.  Yes you have drive time, yes you have inspections to set, yes you also have preliminary research time.  But you would do that anyway. 

The country is in a customer service oriented mode, why should appraisers be indemnified from that?  They shouldn't.  Everyone wants everything faster, cheaper and better.  If you could buy a quality 52" HDTV for less than a grand, wouldnt you?

Take into consideration your fees.  An average American worker makes $65000 a year.  If you complete 3 appraisals a day working 10 hrs a day for $225 per order, you have made over $130,000 a year!  Double that of the average worker in a 2000 hr workweek.  Many appraisers don't have college diplomas but are concerned over continuing education fees.  What about those making 65k for an $80,000 degree?  We all have to pay for education, gas and our own time, so none of those should be factors in considering the differences in income. We all drive cars to work. Appraisers just drive to more places of employment (I'm talking about the subject property).  Many people drive to and from work the same amount of miles you put on your cars driving to appraisal appointments.  The difference is we can't claim them on taxes!

I am not here to say that appraisers should not get paid, I am just saying look at it from the normal working Joe's eyes.  If you complain about fees and they take the time to add them up, you will get more opposition than you bargained for.

OK now off of that soapbox, the second reason I believe appraisal management companies are a GOOD THING is that they offer you large volumes or actually whatever volume you choose.  Appraisers who do good quality, timely work will get the most work.  If you owned a company, maybe you own an appraisal company, would you benefit more if your appraisers were punctual, ethical and produced high quality work or those that produce the other choices?  It is a no brainer.  Again appraisal management companies offer work to the best appraisers at the best fees, not just the best fees.

Well I dont know who if any of you will agree but it is hard to knock common sense. Most AMC's are built on that.  Many of them will not bend to pressure even though one or two were shown to have done that.  One last thought.  If Cuomo would have caught a specific appraiser with inflating values, would you have wanted everyone to assume that all of you were doing that too?  Just think about it.

If I were close to getting my appraiser's license I would consider myself lucky that I didn't waste the money on the license or the E & O, or the MLS, or the camera, or the...etc.

I spent 17 years building an appraisal practice; only to watch it go from $22,000 per month to $300 per month in May of 2009.  Appraising is a business for chumps (until they do away with HVCC).

Personally I would rather dig ditches or deliver pizza than do a new appraisal with the 1004MC for 1/2 of the old fee.

I have just written a letter to the NAMB to encourage them to partner with the NAR.  I believe that the time has come to produce a television commercial that will show borrowers just how much they will be screwed by HVCC.  Example: Loss of loan locks and a higher rate (a near certainty); increased appraisal fees (guaranteed); potential of paying for multiple appraisals (strong odds); being defrauded at closing on the HUD-1 through misquoted appraisal fees (virtually certain).  Need I go on?

Best of luck to everyone.

There is a lot that can be done to change this but we need a leader and the politics needs to start on a local level.

NAR Members contact your local appraiser, the ones you believe do an accurate job.  The ones with plenty of experience.   The ones that can inform you of what lenders to use.

Namb Members Develope a compromise.  Come up with a plan to present where all the good intentions of HVCC can stand but be modified so you can operate with some independence.  It can be done.  The technology is available.

AI;  Start a political action commitee in your local chapter.  Develope suggestions for the requlation of AMC's in your state.  Plan on a long journey.  Gather support from NAR & NAMB members.  Request a sit down with or invite state reps to address your chapter.  Start a dialogue.