Appraisal costs those who are sneaky STOP PUTTING $0 AND SAYING IT IS POC

Alan,

I have encountered the same thing with a handful of lenders in my area.  Unfortunately, no matter how many of these that I flag I dont see any changes being made.  IMHO, this is a violation of the code of conducts by blatantly not being transparent.  I think this type of snakey behavior downgrades the level of quality that zillow should be known for.

I wish I knew how the flagging process worked. Maybe I am just not reading thouroughly enough, but it seems like this type of error is easy to see and correct as opposed to some that are judgement calls. I mean all you have to do is look and see if they have an appraisal fee.

Truthfully, Zillow should take the appraisal fee out of the Lender fees. I don't know any Lenders who collect for the appraisal. Instead, they should have a disclaimer telling the customer that the appraisal will be paid by them and not the Lender. If you don't collect for the appraisal, then you should not put an appraisal fee as part of your Lender fee.

Also, I read somewhere that they were making it illegal for Lenders to pay for the appraisal and the client had to pay for it. I am wrong on this?

I'm with you Cambridge. Appraisals belong to the client. I only quote costs that I can control; Fees, Processing, Application, Credit Report, etc. I think it gives people a much easier way to compare costs for our services, as opposed to the costs of the entire process. If you really want a simple and easy way to compare costs force disclosure of yield spread and provide the borrower with a time to recoup closing costs estimate

Ya that is silly to show them the entire cost of the loan zilnat, would make it look way too expensive.  On a purchase why not just leave them out completely because the seller is likely going to pay them anyway.

Well here is my issue with those saying appraisal aren't lender fees. We do not allow clients to pick the appraiser hence the costs are dependent on the third party appraiser we select to use. Additionaly some companies have third party appraisal vendors they own. Wells Fargo and Quicken that I know for sure that add yet another layer of cost. Title is different any title company will do, a client could shop around for a title company and it would have no bearing on the transaction. Saying that appraisal costs shouldn't be included is a similair rational to credit reports not being included, or for that matter lender fees if you are brokering. It is a slippery slope and every quote should have a estimate for appraisal costs.

Appraisal and credit fee are a part of the refinance or purchase and no one can two-step around that.  I agree with you guys totally.  If a borrower wasn't buying a home or refinancing an existing home then there would be no appraisal cost, right?  So, it came about because of a real estate transaction and has to go int he section when quoting.

I have emailed this guy about this but he seems to think otherwise. We all know that they leave the appraisal off because it looks better on the summary screen and they are trying to get an advantage on click through. They play games and word it in different ways but we all know the drill. Keep flagging them and let's level the playing field before it levels us.

$.02

Is that William Hung?

ColoradoLender,

I'm glad you agree with me. If it's Zillow's goal to make the "Loan" comparison process simpler drop off the appraisal field. We may choose the appraiser, but ultimately the client has the right to tell us kick rocks if we tell them that the appraisal costs more than they are willing to pay.

Example:

Normally when selecting an appraiser I locate whichever Investor is doing the loans' approved appraisal list and select an appraiser off of that list. I contact the appraiser give them the contact information for the client. Then I call the client and inform them that I selected the appraiser off of the approved appraisal list, the price of the appraisal, and that I can try to find someone to do it for less. It's at that point the borrower has the right "to shop." Though I may be required to select the appraiser, the client has to pay for it. When the client has the ability to "shop" the appraisal I have no control over the cost and thus do not feel it necessary to quote appraisal costs.

I may have just given a  long winded rationalization for something that you all may disagree with, but at least there is (some sort of) reasoning behind my decision to omit the cost of the appraisal.

P.S. I appreciate your sarcasm; though it's an art that loses its efficacy on internet message boards.

Zilnat,

That makes no sense.

"We may choose the appraiser, but ultimately the client has the right to tell us kick rocks if we tell them that the appraisal costs more than they are willing to pay." 

Umm, we choose the lender too and they charge an underwriting fee that we have to disclose. Does the client not have the right to tell us to kick rocks on that too? The client pays the underwriting fee directly to the lender, just not outside of closing. What is the difference? A fee is a fee is a fee.

You have to disclose the appraisal on the GFE, what is the problem on disclosing it here?

Ohh that's right, it makes your quotes more ...

I'm gonna have to agree with Greg.  Sorry Zilnat, seems like you're trying to pull a fast one.

Obviously we can all agree to disagree.

Until the Zillow mods see you leaving out fees.....

CL you crack me up.

Obviously we can all agree to disagree

Only at the end of the day

Whether any of us agrees with the items on the quote form or not is for another time.   

If it's on there and the client is going to pay for it, ie. your not paying it out of YSP, then it goes on the quote. 

I agree. Either put it on there, or pay it ...simple as that. Anything else is either blowing blue smoke, or seeking to gain competitive advantage. Since we do have some control as to who will do the appraisal, and can shop that fee to the benefit of our customers, our quotes should contain a reasonably accurate cost estimate for this required fee, if the borrower is to pay it. (And not $300 for a $1 million+ home either) It's all about disclosure. More is always better.

I would like to see the mini GFE broken into 3 categories. 

I. Lender Fees (processing, underwriting & origination)

II. 3rd Party fees that don't go the the lender like appraisal

III. Prepaids like insurance & tax escrows.

They should include a little link to a definition page where each category can be explained to the borrower.

Here is the deal.  Just disclose the fee in the box.  See the definition below. 

Lender fees are fees required to close a loan. Most fees are paid to the lender but some are paid directly to third-party service providers. Borrowers are typically responsible for all lender fees but some mortgage transactions allow for the seller to pay some of the lender fees.

I am reviewing the quotes that was mentioned in this thread.  Flags are definitely a great way for us to see who is following the rules and who aren't.  Keep them coming.

Nida, it's interesting to hear that you continue to promote flagging as a method of policing the site when it appears to those of us who are actively using the site and trying to honestly represent, that this process isn't effective at all. There appears to be no accountability, there's no feedback to the flagger even though you require the email address, and there hasn't been any drop off of the worst and most consistent offenders.

This site will continue to evolve and grow, if Zillow chooses to support it, regardless of the quality of product that is being offered. But most of us who are actively on this site would like it to be perceived as a fair and honest place to do business, and that those others who continue to perpetuate the public perception that mortgage professionals practice "bait and switch" as normal practice and are not very high on the evolutionary ladder, should not be allowed to survive and thrive.

Fees should only include the APR items. This would eliminate the appraisal fee.

Zillow specifically list an Appraisal fee under Lender Fees....... if the buyer is required to pay for an appraisal the amount should be listed.   Otherwise the consumer should not expect to pay for an appraisal.  Same for Credit Report though that seldom is an issue since it is such a small amount but principle/rationale is same.

I had kind of thought my thread had faded out. I disagree that only APR items should be included. All fees that the consumer can't control which is everything, but title should be quoted. Unless you are doing a loans without an appraisal ( and tell me where your work if you can) it is a transaction cost, and I don't know of a lender that lets a client pick the appraiser and given that in January even loan officers will be unable to choose the appraiser on conforming deal ( if you work at a bank you most likely can't right now either) how is it even an argument or contention.

Unless you are the person who tell clients that lender fees are only.... when they ask for closing fees it shouldn't be a consideration. If you are that person well now you can be caught and evaluated by your peers.