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The Appraiser Coach Podcast


Listen while you drive to and from appraisal inspections as Dustin Harris, The Appraiser Coach, gives you helpful tips, tricks, ideas, and principles which will make you a better appraisal business owner. Dustin has been a successful real estate appraiser for many years. As the Appraiser Coach, he has made it his life’s mission to teach other appraisers across the country to also succeed and thrive as real estate appraisal business owners. Join Dustin each week as he keeps you informed with the latest in the appraisal profession, interviews movers and shakers, talks to your peers about what is important to them, and shares with you his secrets to incredible success.

Jun 12, 2016

Sometimes we don't know what we don't know.  For appraisers who do work for Appraisal Management Companies (AMCs), it is important to understand what their role really is.  John Dingeman, Chief Appraiser at Landmark (www.landmarknetwork.com) joins us to explain.  John was an independent fee appraiser before he worked for an AMC and helps answer the hard questions.  


Wise Old Chnaman
almost three years ago

Dustin - what we appraisers need is where do we file complaints against unscrupulous and unethical AMCs who shop for the cheapest appraisals at half the normal fees (typically snatched by trainees who can't get work from Lenders requiring minimum 507 years work experience), instead of paying the local customary fee.

AMCs managed by crooks such as Mr. Dingleman have got to be rid of.

Bill Johnson
almost three years ago

One more thing Mr. Dingleberry, are you trying to protect the appraiser when your sales staff calls my local lender who currently does not use an AMC? If that appraiser is currently collecting the as charged borrower appraisal fee of $500, how are you benefiting me if overnight I start collecting $300. The appraiser and AMC's are in direct competition with each other for THE SAME CLIENT WE BOTH SERVE. Your expand at all costs to build your billion dollar AMC empire runs directly through my depleting bank account.

Bill Johnson
almost three years ago

Mr. Dingeman you did not convince me for one minute why a portion of the stated appraisal fee gets stolen from the appraiser to pay for the lenders regulation compliance. For $100 to $250 a pop I will take my chances in front of my state board and do not need as you to be my first line of defense. The board will not judge me based on the 15 page scope creep engagement letter but will base their judgment on USPAP guidelines. Without local appraiser knowledge do not pat yourself on the back for so called reviewing my report. What a joke.

Kevin Goodale
almost three years ago

My thoughts while listing to this episode.

No way! My direct lender clients do NOT pester and require senseless 'revisions' to the extent of AMC's. Fifteen years in, now a majority of direct lender work (along with Mercury Network).

More cost effective, BS! Lender's in a typical market, where AMC's are confiscating $150 per report, a firm will need to process just 32 reports a day, or just 4 reports an hour, to equate to a $100,000 per year employee. Do the math. It is ridiculous to imply AMC's are more cost effective than a local professional to manage the appraisal process for a Lender.

My main premise against AMC (besides the fact fees are across the board lower with AMC's, my experience typically 10-25% or more) I believe AMC's do not comply with USPAP, specifically, the Competency Rule. These are the entities that are assessing the 'quality' of work and dictating who gets the assignments from these 'ratings'; when these AMC's have ZERO geographical competency. AMC's ten States and thousands of miles away can not possibly properly assess the selection of comparable sales and whether or not the selected sales are appropriate. This is assuming that all the AMC's reviewers are appraisers themselves; which they are definitely not. And finally, I firmly believe from the Review assignments I have completed, the lowest tiered appraisers who do the cheapest work for AMC's formulate reports to what the AMC's want to see; not a true and accurate assessment. This is due to the fact AMC's have zero geographical competency to properly assess the comparables utilized! These reports slide right through and the lowest tiered appraiser gets a good rating. Mind all your ratios and keep the report 'clean' i.e. sending in reports C4 when they truly are C5. Whereas a local professionals controlling the flow of appraisals live in and have friends and families living in these neighborhoods. The appraiser once again earns the reputation as a trusted professional, not just another nameless faceless interchangeable vendor.

LayDeeTee
almost three years ago

Part 2
••••And the CONSUMER who is getting the loan, has NO IDEA that the appraiser is not receiving the fee they paid of $500.

In addition, the majority of the time, the fee that the appraiser is receiving, is NOT a customary and reasonable fee in the appraiser's market area. Therefore, the AMCs are in direct VIOLATION of the same regulations they claim to help lenders adhere to!! Paying a customary and reasonable fee is also part of those regulations! They seem to forget about that! iN ADDITION, AMCs use their OWN database of appraisal fees paid out as their data source for fee compliance. They claim that what they pay IS CUSTOMAR AND REASONABLE because that's the fee the appraiser accepted. (Dodd-Frank states how customary and reasonable fees are determined and specifically states that fees paid by AMCs can NOT be included when determining C&R fees for a market area) And as far as violations, the LENDER IS HELD RESPONSIBLE FOR WHAT THE AMC DOES...they are the lender's representative. This has been proven and upheld already!

Let's see the way it SHOULD work;
•The lender contracts with the AMC to order an appraisal.
•The appraisal fee is $500 and is paid by the borrower UP FRONT TO THE LENDER....which will be paid to the AMC. If the AMC is charging an additional fee of $225 to manage the appraisal ordering process...then the AMC adds $225 and the lender pays the AMC $725. The BORROWER STILL PAYS $500.

>>>>>THIS GUY IN THE INTERVIEW TRIED TO MAKE IT APPEAR THAT APPRAISERS DON'T UNDERSTAND WHAT AMCAS DO. Oh yes we do. And we also understand how some AMCs that are owned by the very lenders they claim are hiring them, are passing on the cost of managing the appraisal ordering process to APPRAISERS AND TO CONSUMERS OF MORTGAGE LOANS.
(continued to part 3)

LayDeeTee
almost three years ago

Wouldn't let me post before...let's try again.
Part 1
Excuse me???? AMCs are the APPRAISERS first line of defense??? Give me a break!! You want us to play the worlds smallest violin for ya? Seriously!

AND...this interview only PROVES what I've been saying for YEARS...
>>>As the majority of lenders basically did away with their own appraisal ordering departments,(which they previously bore the cost of) AND THE LENDERS ARE THE ONES RESPONSIBLE FOR COMPLIANCE WITH REGULATIONS..ANY AND ALL COSTS ASSOCIATED WITH USING AN AMC IS THE LENDER'S COST TO DO BUSINESS...NOT THE APPRAISERS & NOT THE CONSUMERS!!!

When AMCs first came into being, they had the opportunity to actually be a good thing. They could have run their business as a way for LENDERS to abide by appraiser independence regulations. INSTEAD....AMCs steal a large portion of the appraisers fee!!
Consider...
1. The AMC is contracted by a lender, the lender contacts the AMC to order the appraisal, the AMC recieves the appraisal fee UP FRONT. Then the AMC tries to find the cheapest appraiser they can, and the AMC keeps the difference between what the lender has already paid them for the appraisal and what the appraiser they have found will accept.

EXAMPLE;
•Lender pays the AMC $500 (or more)
•AMC sends out a broadcast notice TO APPRAISERS for an appraisal order offering a fee of $275
•AMC keeps the difference of $225

That's the TRUTH of using AMCs to order appraisals.
(continued to part 2)

LayDeeTee
almost three years ago

Baaahaahaaaa!!! Ok, I'm done....no wait....Bahahaaahaaaa!!! BTW....what did you do? Disable comments for this post? I've tried multiple times & this is the only time it would go thru.

Brad Bassi
almost three years ago

Dustin, I appreciate your effort and work. I have met John at the Summit, nice man, haven't worked with him so can't comment any further.

I understand the AMC process, I understand that most of them are not cost plus fix fee with their lenders. So the way they make money is on the spread. Most of that comes from lowering the appraisers fee. Hence the $275 / $300 fee work that I see broadcast to my email. I just click delete and wonder how the person accepting the assignment is making money. I understand my average cost per appraisal. At $250 to $300 I can't make enough money to cover my cost and make a living. So if my private party work and small number of direct lenders who do pay me in excess of $400 for standard appraisal drys up, then I guess I will be out of the industry. As I can't see having to do 600 appraisals in year in order to make enough money to cover my costs and make enough money to feed and house my family.

I have tried very hard to increase my fees so that I can keep up with inflation in business costs and software needs and all the rest. I wish John well, but I am really tired of the AMC world and fact that very little gets accomplished at my end without multiple contacts with people who for the most part are very nice but don't understand valuation and or the appraisal process.

Continued good success to you Dustin and thank you for your time and effort spent on bringing information to the appraiser (even if I may not be in agreement with what was discussed).

Wise Old Chnaman
almost three years ago

John Dingeman received same number of phone calls from direct lender preciously as compared to AMCs afterwards - either John prepared poor quality appraisals or is this guy trying to pull a fast one on us?

An AMC will order a new appraisal because the first appraiser won't respond to update their license in an appraisal report?... This is the best real life example John can provide regarding a deficient appraisal where an AMC would take a loss?...who can continue to listen to this guy giving out so much crap?

Ted Zink
almost three years ago

Mr. Dingeman,

I ask you to listen to this interview. Although I have no issue with working for an AMC other than as you have pointed out on several times throughout the interview is that the entity that benefits the most from the AMC is the lender. Again I have no issue working with an AMC as they make up the largest portion of my work but if the lender is benefiting the most from the AMC why am still working for fees similar to the fess that I was making when I started 18 years ago. I don't care how much the AMC makes I am just tired of being the one that is paying for it. Basically the lenders have reduced their cost and liability to manage the appraisals in house by using the AMC. Why are they not the ones paying for it? The whole reasonable and customary fees are a joke. It amazes me that every part of the DOD Frank act has been enforced with the exception of that part. I don’t blame the AMC for the fact I am not receiving reasonable and customary fees but please don't pretend that the benefit that I receive by working for them outweighs the loss of fees.

Ted Zink