inaccurate apraisals, collusion or just inept?

Christine Hynes, "LoanModSpecialist"

I heard appraisal fees were around $300-$375, but I paid about $500 for mine last month, so I think some places raised it up. The appraisal was $100,000 lower that the price, so it killed the deal. I was a little upset but wouldn't dispute the charge with the credit card company.

If you really want to dispute, there is a high chance that you will a refund because the credit card companies usually side with the buyer. Be careful because then the appraiser can come after you. You should ask consult with a lawyer, but that would cost you over $500 :).

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September 29

Christine Hynes, "LoanModSpecialist"
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Ray R. Stevens, "My Faith First"

Banks have tightened up appraisal guidelines and appraisers are running scared basically, is the short answer. Plus banks are slowly running them all their appraisal management companies, complicating matters.

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Ray R. Stevens, "My Faith First"
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Clay Branch, "Georgia Loans"

Mr. Wilsey,

HVCC is a law that has appraisers working for much less money than previous. In the past, they got an average of $350 per appraial. My appraiser friends are saying they now have to accept the same work at $175 to $250. They have to now do more appraisals to make the same money.

Therein lies the problem. Some loans of mine have come back with the same ridiculous findings. I am told the appraiser spent all of 10 minutes at the property!!

Help originators, appraisers and agents get HVCC repealed.

Your options are to prepare a strong rebuttal or take your chances on another appraisal. Of course you want to do your homework first: check with a local appraiser or realtor.

Probably for a fee, a local appraiser may be able to help you with your rebuttal.

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Clay Branch, "Georgia Loans"
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Richard, no one gets more fees if the appraisal comes in low, and it usually kills the deal altogether so no fees. You should challange this appraisal given what you outlined. I am surprised agentblu15 didnt have any comments on the quality of your appraisal since he claims to have some appraisal review background. BTW, before HVCC if I ordered an appraisal in the morning I usually had it in email around 10 PM, if ordered in the afternoon, I usually had it by noon the next day. Cost $300 conv and $325 for FHA. Never had any comps/value questioned by Provident and they are tougher than any other lender in the country on picking appraisals apart. HVCC sucks.

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September 28

mike politzer, "Mike Politzer"
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-You have your facts and numbers wrong. The average appraisal fee was $350 - 375 for a conforming loan prior to HVCC. Now it's between $450 and $520.
I'm not speaking pre- vs. post- HVCC. I'm speaking in terms of appraisals through an AMC versus appraisals ordered directly through an appraiser (for example, by a homeowner to support an assessment appeal) - Ridiculous. This is not the concern of this topic, nor of the majority of appraisal related threads. HVCC is exactly the issue at hand.
-Wrong. I've seen Landsafe take upwards of 3 weeks to get an appraisal done numerous times since HVCC, for example. In general, we've seen consistently longer turn times.
I've seen appraisals that take a long time too, but I'm speaking on average. If I call an appraiser on my own and ask for a turntime, the standard quote for a full interior is 7-10 business days,minimum, in most areas. AMCs typically hold their vendors to 5 business days for full interiors. Of course there are exceptions that take longer, but the averages across the board are better. Between the upfront ordering period, the dispatch, the actual visit and then the review, 5 days is a pipedream. When we controlled the process it was the norm.

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September 28

agentblu15
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-You have your facts and numbers wrong. The average appraisal fee was $350 - 375 for a conforming loan prior to HVCC. Now it's between $450 and $520.
I'm not speaking pre- vs. post- HVCC. I'm speaking in terms of appraisals through an AMC versus appraisals ordered directly through an appraiser (for example, by a homeowner to support an assessment appeal)
-Wrong. I've seen Landsafe take upwards of 3 weeks to get an appraisal done numerous times since HVCC, for example. In general, we've seen consistently longer turn times.
I've seen appraisals that take a long time too, but I'm speaking on average. If I call an appraiser on my own and ask for a turntime, the standard quote for a full interior is 7-10 business days,minimum, in most areas. AMCs typically hold their vendors to 5 business days for full interiors. Of course there are exceptions that take longer, but the averages across the board are better.
-How can you state that when the competence and the expertise varies so drastically from appraiser to appraiser?
AMCs uphold a consistent level of quality and content from the client perspective. (example, client A wants every appraisal to contain 4 sales and 3 listings. AMC makes sure this is on every report, without client having to specify to every appraiser)
-Where are you coming up with that? The AMC doesn't even get involved other than to dispatch and "review".
LOL. Honestly, while working as a QC reviewer for an AMC, I spent more of my day tracking down property info, correcting mistakes made by the lender when ordering, talking to local assessors to determine zoning discrepancies, etc. than anything else. The client never knows about 90% of these, because te AMC resolves it internally.
-When HVCC was rolled out one of the selling points was that the AMC's would maintain such a database with the objective of just that. The reality is that more often than not, the appraiser is coming from an area OUTSIDE the locality, and doesn't understand the finer points of the area they're appraising.
This is often a product of necessity- if there's not an appraiser available in an area (after extensive recruiting), then someone from outside has to be used. This would be the sae regardless of who was choosing the appraiser.
-How does this eliminate exactly the kind of mistakes the OP is describing?
It doesn't-- mistakes on something like property lines or reported comp condition cannot be caught by a QC reviewer, as that info is not available to the AMC. But realistically, those errors would not be caught by the lender either, and as for the property line, no one without a survey could verify that.
-HUH? The appraisals are in exactly the same format they've ever been.
Different clients have very different demands for distribution Some need specific formats (ACI compatible, etc.), some need website uploads, some need multiple hard copies sent to different offices, some need data extracted from the report and distributed in spreadsheet format. All of these require specific IT protocols, and eliminate downtime on the client end.

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mike politzer, "Mike Politzer"
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-AMCs consistently provide lower cost appraisals than borrowers or small lenders can obtain on their own.
You have your facts and numbers wrong. The average appraisal fee was $350 - 375 for a conforming loan prior to HVCC. Now it's between $450 and $520.
-AMCs consistently provide significantly quicker turnaround times versus appraisals ordered straight from the appraiser. -
Wrong. I've seen Landsafe take upwards of 3 weeks to get an appraisal done numerous times since HVCC, for example. In general, we've seen consistently longer turn times.
-AMCs ensure that every appraisal for a given lender meets the same quality and content standards.
How can you state that when the competence and the expertise varies so drastically from appraiser to appraiser?
-AMCs protect the appraiser from lender-pressure, and also protect the lender and borrower from appraiser fraud.
That's obviously the intent - but you've thrown the baby out with the bathwater. And it's holding back the recovery on top of that.
-AMCs identify and resolve MANY issues involving property location, ownership, highest and best use, etc. that can delay or invalidate an appraisal.
Where are you coming up with that? The AMC doesn't even get involved other than to dispatch and "review".
-AMCs recruit, maintain, monitor, and counsel a database containing tens of thousands of appraisers nationally. This ensures that an appraisal can be assigned and completed just as quickly and efficiently in a tiny town in the middle of nowhere as it can in Chicago or Miami.
When HVCC was rolled out one of the selling points was that the AMC's would maintain such a database with the objective of just that. The reality is that more often than not, the appraiser is coming from an area OUTSIDE the locality, and doesn't understand the finer points of the area they're appraising.
-AMCs review and quality check every report from an appraisal standpoint, NOT a mortgage underwriter standpoint. While mistakes are still made, this eliminates more errors than you can possibly imagine.
How does this eliminate exactly the kind of mistakes the OP is describing?
-AMCs package and distribute the appraisal and other relavent documents is a consistent, functional format to each lender, which speeds up the rest of the process on the lender's side.
HUH? The appraisals are in exactly the same format they've ever been.

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agentblu15
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Steven Ching-

Amazingly, even though appraisal "management" companies are allowed to skim $100-$200 of the $450 appraisal fee they contribute nothing to the actual appraisal...

Obviously you have the numbers right, but the facts wrong. Yes, AMCs are paid by the lenders to manage and process the orders, and yes, that fee is usually passed on to the borrower. But while it goes largely unseen, the AMC contributes a LOT to the appraisal quality and the process.

-AMCs consistently provide lower cost appraisals than borrowers or small lenders can obtain on their own.
-AMCs consistently provide significantly quicker turnaround times versus appraisals ordered straight from the appraiser.
-AMCs ensure that every appraisal for a given lender meets the same quality and content standards.
-AMCs protect the appraiser from lender-pressure, and also protect the lender and borrower from appraiser fraud.
-AMCs identify and resolve MANY issues involving property location, ownership, highest and best use, etc. that can delay or invalidate an appraisal.
-AMCs recruit, maintain, monitor, and counsel a database containing tens of thousands of appraisers nationally. This ensures that an appraisal can be assigned and completed just as quickly and efficiently in a tiny town in the middle of nowhere as it can in Chicago or Miami.
-AMCs review and quality check every report from an appraisal standpoint, NOT a mortgage underwriter standpoint. While mistakes are still made, this eliminates more errors than you can possibly imagine.
-AMCs package and distribute the appraisal and other relavent documents is a consistent, functional format to each lender, which speeds up the rest of the process on the lender's side.

All of these items contribute to the appraisal process, and all of them require a LOT of manpower and man-hours. The fees paid to the AMC barely cover thee expenses in many cases, and for any file that is more complicated or takes additional research to resolve issues, the AMC will often be lucky to "break even".

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mike politzer, "Mike Politzer"
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Stephen Ching, "Edmonds WA"

Even though I cut the banks some slack on my earlier post, in reality they are also very culpable, as the bigger ones own their own AMC's in some cases (can you say "conflict of interest") and it's a profit center for them.

One of the reasons that all things being equal (even if a little skewed towards the big banks, and we all know who they are) I prefer to use the next tier down if possible. And I'm finding the values often come in a bit higher too.

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Stephen Ching, "Edmonds WA"
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What they need is an HVCC disclaimer that says: You may have to restart your loan process a few times...at extensive time and money cost to you, loan originators, and to lenders since the large marjority of the profit from doing your appraisal will be skimmed by an appraisal "management" company.

Amazingly, even though appraisal "management" companies are allowed to skim $100-$200 of the $450 appraisal fee they contribute nothing to the actual appraisal...

And yet somehow they get away with it and avoid being held accountable since they do not have to be listed on a HUD and are therefore unregulated...

I once had a borrower who was contacted by several different appraisers over a 3 week period who had bid to do his appraisal, thought they were given it, and then called back to cancel the appraisal because the management company had put put the appraisal back up for bid to appraisers to see if one would be willing to do it for less money so they could pocket a bigger split of the $450 fee. Apparently the managment company didn't care that the borrower and lender had to eat a .25% of the loan amount (~$800) lock extension fee. Good times...

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mike politzer, "Mike Politzer"
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Wayne Brown, "SDMortgagefinder.com"

The question of collusion wasn't really addressed, and maybe that's too extreme a word. But since you brought it up, it's clearly evident that with HVCC there's significant pressure on the appraisers to not buck the trend - because if they do, they're likely not to get the next order from the AMC. And if the trend is downwards or flat, they're going to be inclined to come in down or flat.

One thing to really take away from HVCC is that it's structured in such a way as to be in the best interest of only one entity, and that's the appraiser. There's no incentive to represent the best interests of the person paying for the report, the person who will benefit the most from a fair and accurate report, that person being you, the consumer. It's also not in the best interest of the bank, if you believe that banks want to do good loans. It doesn't help them if the appraisal is clearly inaccurate, and they have to waste time and resources going through the rebuttal process and potentially have to cancel a locked loan, resulting in a lost transaction and costing money.

Contact your representative and make your concerns known at the legislative level. It's the only way this is ever going to get corrected.

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Wayne Brown, "SDMortgagefinder.com"
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Bryce Johnson, "Bryce P Johnson"

Deal with your lender regarding reconsideration. They will have to provide current comparables to substantiate the request.

Good Luck and welcome to the new appraisal world of HVCC.

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Bryce Johnson, "Bryce P Johnson"
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Gregorio Denny, "Gregorio Denny"

HVCC regulations were put into place a few months back. Lenders/brokers no longer have the ability to even talk with the appraiser prior to ordering the appraisal.

FHA appraisals are still ordered directly by the lender/broker and you'd probably have a little more luck in getting the ideal value you are searching for.

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Gregorio Denny, "Gregorio Denny"
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