http://www.realestateappraisertips.info/ – Brian Coester: HVCC Suspension – Not Gonna Happen
Brian Coester has published this on LinkedIn:
“HVCC Suspension – Not Gonna Happen
Throughout the news the HVCC has been bad mouthed, talked bad about and i am personally waiting for someone to scream “bloody murder”. Most of the controversy has been centered around perceived lower values, increased turnaround, high fees and overall poorer quality of appraisals. You hear the stories of the appraiser driving 200 miles to a town he has never been to do an incompetent appraisal, or the appraiser who is trying to feed his family but only gets $200.00 per appraisal from the big bad management company and is forced to foreclosure on his house due to the HVCC.
This post is to set the record straight and to go into the truths about the HVCC. Whats really going on and also why the HVCC will not be suspended.
Please read more at http://www.appraisalnewscast.com”
MY COMMENTARY:
Brian makes some good points except when he states, “Poor Dan the appraisal man who only gets $200: only if that was true, amcs would be making billions. The truth is vast majority of appraisers wont do an appraisal for less than $300 which means at most the AMC is making a 25% gross profit from a $400 appraisal.” According to Mr. Coester, the majority of appraisers have a choice and don’t do appraisals for under $300? In what market is that? Sure, if they don’t do lender work. But those doing lender work with HVCC compliance don’t have the option to opt out of $200 fees. Even the experienced appraisers. I was told by someone in-the-know this week that I better either except this change, except lower fees (except the 35% to 40% pay cut) or get out of this business because the AMCs are taking over.
The Commentary I wish to add is this: The theory behind Cuomo’s HVCC was to create an “Appraiser Independence”, independence from lender pressure. In reality, what has happened is the creation of “Appraiser Dependence” upon AMCs for work at 30% to 40% lesser fees with 24 to 48 hour turn-times after the inspection. That’s not progress…..that’s called a pay cut and a major penalty…..appraisers are peddling backwards. The lenders are now totally in charge (per the New York Times Re-Appraising The Appraiser article). And, what makes me very upset in the NYT article is to have the AMC spokesman state, “The real source of trouble for independent appraisers, he suggested, is not the code but a changing economy. “Appraisers want to go back to the way it used to be,” Mr. Blanchard said. “But it’s good business for us to demand more for less.”
Meaning that it’s perfectly fine for AMCs to squeeze appraisers for lower fees, more work per job required and by the way, we need that job in within 24 hours of appraisal inspection. It was HVCC that gave the AMCs this power! How Truly Sad That What HVCC Will End Up Accomplishing Is Replacing Experienced Appraisers With Inexperienced Appraisers who are more willing to work for peanuts!
There’s a local mortgage broker that asked me to get on the approved appraiser list of an AMC owned by a Major National Lender. The mortgage broker says that they collect $425.00 for the appraisal but is not sure what they pay the appraiser. From my past experience with this AMC, they collect the $425, skim $225 and only pay the appraiser $200 for a full FNMA 1004 with 1004MC. I’m not on that AMCs list any longer because of my “Appraiser’s Living Wage” policy. This current fight is not about HVCC, but about paying the appraiser an “Appraiser’s Living Wage”, which is a heck of a lot more than just $200 or $225 or $240 per job.
Bill Cobb, CREA
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{ 1 comment… read it below or add one }
I encourage every residential appraiser to stop the insanity of HVCC.
Grow a set and strike against HVCC. If you need to quit the business in order to drive AMCs out of business…do it. We decided to strike against HVCC rather than work for 1/2 price and now use our firm’s webpage to inform the public about truth behind HVCC.
You can refuse to do the work and drive them out of business or you can go on paying them 50% of your income. Next year it will be 75% of your income. The simple fact is that appraisers rolled over and willingly gave up their profession to banks (who truly do make billions of dollars now at their expense). I’m ashamed to admit that I belonged to the profession for 17 years. Appraisers for the most part seem to be weak little wimps. I now believe they deserved to have lost their livihood.