Earlier this week and article in LendingLife questioned the veracity of the recent Federal Housing Finance Agency working paper which concludes appraisal management companies provide little added value to the appraisal process.
On the topic of value to homeowners, and the value accurate valuations bring to the mortgage lending process, pro-appraiser blogger Mark Skapinetz makes the argument that borrowers should be charged AMC fees and appraiser fees separately.
Disclosure: Skapinetz is an appraiser at Whats It Worth Appraisal Services, the creator of the 100% Real Estate Appraiser Group, and co-creator of the appraiser-centric conference, AppraiserFest.
So it comes as no surprise that he feels that, yes, borrowers should see the valuations fees invoiced a two distinct charges on the mortgage documents.
Here’s his argument:
“Remember how consumers once knew the cost of the appraisal up front and who the payment was made to? Do you know this information with confidence today? Do you know for sure that all that money you paid for the appraisal is going to the appraiser for their services?
If you said yes, the answer is, actually no. No one is being honest with consumers about this aspect of the mortgage loan process. In fact, lenders and their AMCs make it a requirement that appraisers can’t discuss the fee with you, much less include an invoice with your appraisal.
In short, the fee you pay for an appraisal, with your money, is not going where you thought it was and I’m writing this to help consumers dig deeper into the representations being made to them.”
Skapinetz then provides some examples of how this process could look.
Does Skapinetz have a point? It bears consideration.
Is there a reason AMCs may not allow for the fees to be invoiced separately? If there is value to what AMCs bring, shouldn’t they stand by the fees?
The appraisers I speak to paint the AMCs as part of some large conspiracy to nickel and dime their way to big profits. The AMCs I speak to believe they are vital to maintaining the arms-length regulatory requirements set forth by Dodd-Frank regulation.
Are the AMCs hiding something? Maybe, maybe not.
But in the above system, there is certainly something missing.