Today we talk to Marlene Chaker, owner of AAA Appraisal Management Company about the Appraiser Shortage.
CLICK HERE to go to AAA-AMC.net and reach out to Marlene.
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There is no appraiser shortage. This is Lender/AMC propaganda.
To Todd Hollingsworth … Accountable for what? You must be a lender or AMC shill.
Can’t appraisers form their own pool of appraisers, call it an AMC or whatever they want to be compliant and keep more of the money they generate? Any AMC or entity TAKING more than 10% of a fee generated by an appraiser is extortion. Originators don’t work for brokers who TAKE 50% of our revenue generated and so should we not let anyone else whose contribution or effort does not merit such a big piece of the pie be tolerated.
Yes, this has been attempted. A total of 6-10 lenders handle 90% of most of the mortgage loans in this country. Most “require” customers to use their AMC system becasue they make money off of an appraisal order, without telling the consumer. The law requires a “firewall between the lender and the appraiser. There are website portals that act as this firewall. Most smaller lenders do not know that they can use one of these portals, create their own panel of appraisers to choose from and it all complies with the rules! They typically charge a fee of $10-$25 dollars. The Appraiser gets his full fee and the lender is in complete compliance. Contact: WalshStreetAppraisals@gmail.com for further details.
Appraiser shortage? Maybe in some areas, but overall, nationally, the numbers don’t indicate but a minimal change in licensed appraisers.
Want the truth in TA (Turn Around Times – AMC talk)? Here you go:
1. The large majority of appraisers are aged and simply not doing the volume of work they were capable of doing at a younger age.
2. The pay today is comparable to 15 years ago and is frankly being “held down” by the AMC layer of participation. The “Reasonable and Customary” fees paid are a laughable attempt to attract good talent. You really believe the “old guys & gals” are happy to bust their butt for the same pay as 15 years ago?
3. Everyone agrees the 4 year degree in addition to 2000 class room hours & 2 year trainee requirement is ridiculous to bring in new young players into the pipeline. This is national requirement I don’t hear the AMC’s screaming to change.
4. AMC’s should be nervous about their layer of requirement being removed – as discussed.
Overall, I would opinion that a Shortage of appraisers does loom down the road if changes are not made soon to make the appraisal profession more attractive to the body of youth by reducing requirements and paying a professional rate for services.
I think Marlene said that there were 80,000 appraisers and only 20,000 doing mortgage appraisals, which would mean that there are 60,000 appraisers that do not want to do mortgage work. That does not sound like a shortage of appraisers, just a shortage of appraisers that do not want deal with long hours and little pay.
Isn’t it amazing that after 10 years of Dodd Frank you still do not know what a customary and reasonable fee is? They enacted every other part of Dodd Frank except that part. That was the part that was needed to make it work. Those states that have required C&R are now being attacked by government agencies for price fixing. Appraisers are Gangsters don’t you know. Why did they decide not to separate the appraisal fee from the AMC fee on the HUD statement?
You cannot say that appraisers aren’t held accountable, because an appraiser puts his career on the line every time an appraisal is submitted. You come in too low and they turn you into the state and if you missed something or they disagree with your condition rating they charge you thousands of dollars just for not being perfect or having a different opinion and your E & O goes up and you have to pay for more classes. An appraisal report is similar to holding a scorpion in your hand. Just think, the state of Oregon board said that it is a USPAP violation to be late on an appraisal.
The decision not to use licensed appraisers is in itself outdated because most licensed appraisers have 15 years experience, so what logic is there not to use them?
Scope creep is definitely an income killer. We should get paid for extra work.
If the appraisal industry was financially feasible there would be no problem finding some one to do the work. The law of supply and demand should cause fees to go up, but something is holding them down. Could it be AMC’s, who are now hiring their own staff appraisers that will work cheap and meet the demand. Or maybe we should let the check box monkeys do the inspections, take the pictures, have avm’s pick the comps and adjust them with regression analysis, and have an appraiser certify they did a good job instead paying an appraiser.
After working as an appraiser for 20 years and being 55 years old I am thinking about finding a new career that would make my wife very happy.
Yes, this is AMC/Lender BS! There is no shortage! All you have to do is look at the system that the “lenders” have imposed to see why lenders/amc’s are spreading such fake news. The bank collects an “appraisal fee” from the consumer (customary & reasonable), pockets 30%-50% of that fee, then passes the remainder on too the AMC who is providing a service for the “lender”, not the appraiser.The AMC is incentivized to find the cheapest appraiser because the AMC makes its money from what is leftover from that appraisal fee. The requirement to have a supervisory appraiser with the trainee the whole time during training was made up by the banks! IT IS NOT AN APPRAISAL (USPAP) REQUIREMENT! If they sell the shortage lie, they increase an already excessive appraiser supply and are able to decrease the supply, pay lower fees, and pocket more money for themselfs.
“Decrease the demand”
I usually like the show and find it informative, but this was terrible, have an actual appraiser speak to the ‘shortage’ and requirements, not an AMC. HVCC turned the industry on its head, and its been limping along ever since. The new licensing requirements came from the Federal Government [TAF, etc], these will likely go back to pre-2009, but it will be too late to save the industry. There are studies out regarding Fair and Reasonable Fees, they are area specific and not hard to find, many AMCs just broadcast orders hoping someone will bite on the low fee, sadly, many do, they need the work, there is only a shortage of appraisers willing to work for very low fees. Appraisers have to follow USPAP, FNMA Guidelines [take a look at the selling guide], both are comprehensive and reasonable, the problem is the additional AMC and lender overlays, additional requirements which are all too often ridiculous and time consuming to address and/or impossible to meet – lets not forget about the UAD and CU – the guidelines are ominous. Most appraisers have a hate/tolerate relationship with AMCs, all have an engagement letter of some sort with their list of requirements, some lists are 20 pages long, the really lazy AMCs just consolidate all the lender requirements they’ve seen since 2008 for all their lenders and put them on one large list, most of the requirements have nothing to do with the subject property type, but we have to read it each time, there may be something in there to trip us up, once you accept the assignment, you have to do all the things requested in the engagement letter. Since Freddie dropped the appraisal requirement in some cases [ya, we will see how that goes, its a test, soon the appraisal requirement will be dropped completely], and lenders going to Valuations or BPOs instead of appraisals, the whole thing is in a death spiral. The Feds established the appraisal licensing as a result of FIRREA, now it seams they are dismantling it. The markets will crash again, its certain, then there will be another scramble to ‘fix’ it. There is no shortage of appraisers, just a shortage of appraisers willing to take a file on for $175-200 that will take most if not all of the day.
I was an active appraiser from 1993 to 2008, I was certified in 1995. I did not renew my cert in 2012 and now I would have to start all over again. Meanwhile, the mortgage brokers trying to get me to inflate values can still practice. I put myself out of business by refusing to make numbers and refusing to make a quarter of the total fee for doing all of the work and carrying all of the cost and risk. I miss appraising, it was a great job and I’ve never felt so confident and competent in a vocation. No going back now.
What are you doing now? Is it better than working 24/7?
In my market things were quite fine and stable until 2004. At that point my clients started to contact me to sign up with this or that AMC. Which I never heard of such a thing in the previous 14 years of appraising. I checked and found fee’s were 1/2 and assignment conditions were crazy with each one. I declined. I always had plenty of private assignments, expert witness, etc. I did get review assignments from my previous lenders (mostly banks). I was shocked at what I saw. Wrote dozens of poor review ratings and not long after the review assignments stopped coming. Older appraisers in my market we all knew each for years. We talked from time to time, sent referrals. Same thing happened to them. Soon the AMC’s took over our little suburban market with appraisers coming from 3 – 4 counties away, or sent their trainee’s, for these low fee’s and quick turns. Prices and values went from a stable 4-5% per year to a month and then more. Some appraisers I talked to at live CE seminars told me “don’t hit the number and no more jobs working for AMC’s”. The AMC model only demonstrated one thing back then; mortgage brokers didn’t need to call 10 years appraisers or more to see who could hit the number. The AMC’s had a pre approved panel who did it consistently. Now we still see some collusion. Realtor complains to broker, broker complains to lender, lender complains to AMC and revision request pour in, dropped in rotation or the blanket “we have sufficient coverage in your area”. 2003 – 2008 will happen again. Easy credit loans coming back, home equity, purchase bid wars the only thing AMC’s did was collect all of our E&O info and pass on our reports to the big data collectors. Some sold this data. For appraisers I can’t see taking on a unwanted business partner and guarantee they make good profit and I barely get by doing all the work. They say “tech up and take on more volume”. Great if you are canning beans of manufacturing something but each property is different in the suburban and rural world. But maybe thats what they want again, some manufactured.
When you put a greedy, hungry Fox(AMC) in the Hen house)(Appraiser Panels), the recipe for disaster intensifies, the best & brighest are eaten up, pushed aside for the cheapest & fastest, the bill put on the consumer who pays more, gets less, relys on Zillow and disagrees with actual facts and the Fox wants more & more without compensation, or excludes you from the next party. The AMC model has ruined a once proud, independant profession by highlighting the few bad players, insinuating all the players are corrupt and then installing the most corrupt to enforce the rules, while the most innocent, best & brighest are pushed aside or eliminated for the weak, hungry and most in need to be given the assignments. The schools pumped out trainees, while their was not enough work and leveled the playing field so they are now dominate, the newbie, fresh out of school, taking the lions share of the work because any work is work, are willing to take less, work 20 hr days to be considered for future assignments and spend most of the next days doing revisions because they took too many short cuts to produce fast & cheap, then the industry is critized for being corrupt, install the Fox in the Hen House, worthy professional careers are wiped out, banks get away with having AMC’s do most of the underwriting, they can now lay off the good underwriters, keep the cheap & fast ones, then complain that the Appraisers are at fault. The system is broken people, the Todds & Franks are laughing in retirement or 6 ft under. The industry is reeling as the best & brightest run from their chosen profession because the costs dont equal the lower fees, they are not in control of their own business or destinys, they are puppets being controlled by puppet masters that banks instilled(Lied) to get the unscrupulous to use AMC model when all you had to do was put a non commissioned person in the office who is on salary, not commission to order that appraisal, but duped the industry to use their artificial management companies, many they control, to take more from the consumer, have the AMC find the cheapest & fastest, allow them to keep the differences of what is about $50-75 worth of paper shuffling and reporting when your license or E & O is about to expire, now done automatically by the computer. All this and dont talk to the borrower about your pay, charge the consumer more, dont put on the accountability the split the AMC is extorting from the Appraiser, having them rely on Zillow for their home values only to be disappointed when value is way short of Zestimate and blame the under paid, over worked appaiser. The system is broken, the fox is in the hen house, the banking system is again making record profits, the appraiser cant pay helpers or their bills on time bacause a good percent of AMC’s dont pay on time when they indicate Net 30, becomes 45-60 or more days to receive compensation that used to be paid at the door the day of the inspection. What a racket, what a play on the American Consumer and what a scam the banking system has installed as a better way then having the independant professional run their own business and make their own decisions, make it or break it. Now, just a min dless puppet who plays their game or is eliminated. So sorry for this once proud and loyal industry, the American Public deserves better and the polititians should stay out of the decision making for this industry. Used to love what I did, now angers and disrupts my life and entire look on the world of Real Estate. What a shame Dodd-Frank and HVCC(Andrew Cuomo) have done to this once proud profession. Makes me ill to even get up and go to work most days thinking about how much i dislike what I am doing, but over 60, just dont have the energy to start over again, caught in the rat race of the Appraisal World. Pay to play, then pay more, make less, dont get paid on time, pay overdrafts to the same banks who propigated the mess. Banks get richer, people get screwed more. Its the new American Way!