Comment on Financial Reform Implementation
September 14, 2010
This is the way to restore the power to the professionals who have earned the right to call themselves professionals in all housing related fields. If they don't listen, a national COD day, where all appraisers state they will not accept payment by AMC's, might be the wake up call to cut the 3rd parties out of the business of brokering professional services and stealing professional fees business.
If an AMC orders an appraisal from an appraiser it should go like this:
1) order referred to appraiser with no fee or turntime quoted
2) appraiser talks with homeowner about property details and
3) determines scope of work and required research and turtime based on facts, not flat rate pricing and turntimes
4) appraiser tells homeowner that if they pay for it at the time of inspection, they get a copy, which they can shop lenders with if this one doesn't work out, preventing them from having to pay for 2-3 appraisals, which is insanity. This incentivizes the the consumer to pay at the door. If the bank is paying the appraiser, it can't go through the AMC. Homeowner becomes co-client if they pay for it at the door.
5) Appraiser notifies the AMC of the required fee that they will be charging the homeowner or the bank and turntime to complete the job
6) AMC doesn't rush the appraiser to meet a promised time THEY made, but holds the appraiser to their original turntime estimate unless unforseen circumstances arise
7) AMC's perform an appraiser shuffling function only and only charge the lender for their services, they collect no appraisal fee, so consumers do not pay for the AMC's service that is provided to the lender anymore….cheaper appraisals for consumers
8) The appraiser sends out copies of the appraisal to the lender and the co-client (if the homeowner paid COD at the door only), otherwise the bank just gets a copy and does not necessarily have to convey it to the borrower, although they should.
9) If the homeowner paid for it COD, they can shop other lenders with it and get it readdressed to the new lender of their choice for a fee.
10) The AMC bills the lender $80 or whatever the fee is to the lender only
11) If the homeowner didn't pay for the appraisal at the door, the AMC sends a statement to the bank that they need to send a check for the full appraisal fee directly to the appraiser's office. Payment terms to be determined by the appraiser. AMC's can then shop for the best appraiser's terms on behalf of the bank, but they can no longer dictate prices, terms, report content, or turntimes on behalf of or to the appraisers.
This way the AMC's do have a small place in the business, that does not in any way harm the professionals that provide the actual service nor do they have any power to make promises to lenders that they cannot keep, such as "we turn them all around in 2 days", we get waterfront appraisals done for the same price as a ranch house in a tract subdivision, etc……
AMC's under this scenario may have a place in the industry, if needed by a lender, but appraisals should be able to be ordered by anyone and not have to go through an AMC. Mortgage brokers are a required component in the lending industry to level the competitive playing field and keep banks from having quasi-monopoly powers. Obama wants to create jobs. Andrew Cuomo's actions eliminated thousands of jobs. The problem is now clearly defined and this is the solution….cut the AMC's out of being able to steal appraisal fees!!!
H. Dante Kahn, III
Appraisal Group of Pensacola, Inc.