AMC's: I wish I were talking about the Pacer, the Hornet or maybe the Matador--Those infamous unreliable cars of the 1970's :) but unfortunately, I sure feel the need to rant about the infamous unreliable appraisal management companies of 2010! I'm sure many of us have had horror stories with HVCC but since the implementation of "appraiser independcence" for FHA a few months ago it's made appraisal issues for FHA now worse than ever.
Why is it that the number of re-inspections I need for HUD/FHA compliance nearly doubled? I think it must be because the appraisers get paid less to perform an appraisal and look harder to find something to make more money on a second trip charge. Meanwhile, my borrower pays more for the initial appraisal AND has to pay more than it ever cost before for a completion certification.
Old way: average FHA appraisal cost $350, If needed, trip charge for repairs and write up of completion report average cost $75. Average turn time 3-4 days on appraisal and 2 days on re-inspections
Now: average FHA appraisal cost $425-$450. Completion cert $150. Average turn-time 7 days and 4-5 days on re-inspections.
How I love less service for more cost!
OK, Here's a real kicker! A "lender overlay" causes lender A to deny the loan regardless of the fact that its an Approve/Eligible. Appraisal had been performed by their AMC.
Lender B approves the loan no problem and accepts the appraisal but a few minor repairs were required and a re-inspection needs to be done. The AMC now refuses to pass along our order to the appraiser because they say the loan is declined and they need the underwriting manager from lender A to put in a transfer request. The appraiser cannot accept a direct request from us. Am I crazy or is this an exercise in stupidity?
The real estate agents really do not understand why I am now on day 3 since repairs are completed and appraiser has not contacted them to schedule re-inspection.
Let's remember: HUD did NOT mandate the use of AMC's. They mandated appraiser independence and appraisal portability. HVCC by definition applies to Fannie Mae and Freddie Mac. HVCC is not a term related to FHA yet it appears the industry has taken this over the top and turned this into another disaster.
If you run an AMC and you're reading this, I apologize if you feel this doesnt apply to you but as a whole the system is inherently flawed. Individual, trustworthy appraisers are working harder for less money and borrowers are out more money just so that someone can act as a pass-through.
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