Poll Results – www.appraisalport.com survey 11/4/13
Have you noticed any change in the fees being paid by AMC’s since the market has slowed?
– No, fees seem about the same as before. 2,618 votes 52%
– Yes, the fees seem to have increased slightly. 464 votes 9%
– Yes, the fees seem to have decreased slightly. 1,419 votes 28%
– Not sure 488 votes 9%
Total Votes: 4,989
My comment: I am forecasting declining AMCs fees because loans have dropped. Keep up with fee changes at www.appraisaladvisor.com which is now free to all appraisers!!
I have lots of tips on getting higher AMCs in my AMC Special Report – $20 and FREE to paid subscribers!!
go to www.appraisalport.com to take the current survey.
My comment: Hmmm… we will see what happens. Maybe too many appraisers took Streetlinks off their approved AMC list?
Full Streetlinks press release:
May 23, 2013 /PRNewswire/ — StreetLinks Lender Solutions(R) announced today the August 2013 launch of its AppraiserPlus(SM) program. AppraiserPlus(SM) significantly enhances the professional partnership between StreetLinks and appraisers by removing the traditional hurdles of micromanagement and post-completion appraiser payment cycles. StreetLinks’ lender partners will continue to benefit from exemplary quality and service levels, with the assurance that they will never be responsible for an AMC’s failure to pay the appraiser.
“I have said many times that we want to make a positive impact on our industry and to continuously make it better than it was when we entered. AppraiserPlus(SM) is consistent with that goal by providing measurable benefits to appraisers and lenders through real partnerships — not traditional vendor micromanagement,” said StreetLinks President, Tom Hurst. “This program allows appraisers to focus on running their businesses and brings back the days of “COD” style payment. This announcement is a year in the making and as an original founder of StreetLinks, this is the most exciting announcement of my career.”
For years, traditional AMCs have put all appraisers into a single bucket and micromanaged every aspect of the process, resulting in real or perceived nuisance calls, texts and emails that interfere with the appraiser’s productivity. While StreetLinks has never set appraisers’ fees and has remained loyal to exceptional appraisers, the company also approached each order with a standardized follow-up process. AppraiserPlus(SM) changes that trend by restoring the days when appraisers were trusted to run their businesses and provide great service and quality reports, in addition to receiving the majority of their payments at the inspection versus weeks or months later.
AppraiserPlus(SM) will limit or remove calls, text messages and emails to participating appraisers during the appraisal fulfillment process, thus allowing appraisers to spend their time inspecting properties, compiling data and writing appraisal reports. Appraisers will have the opportunity to remove nearly all follow-up questions, revisions and stipulations by completing a StreetLinks QX review prior to report delivery. Additionally, AppraiserPlus(SM) will generate ACH payments to appraisers the same day the property is inspected.
Appraisers accepted into the program agree to consistent and fair service metrics and quality control requirements. Hurst noted that this will also ensure lenders that the best, most qualified appraiser will be handling each report.
“We have spent years developing great partnerships with our clients and continue to see unprecedented growth and capture market share. This program will strengthen our partnerships with appraisers while driving additional value for our clients,” Hurst added. “With multiple AMCs recently closing their doors, some lenders have been put in a tough spot — including being left to pay millions in situations where the AMC collected the funds, but failed to pay the appraiser. AppraiserPlus(SM) mitigates such risk, making it a win for both appraisers and lenders.”
StreetLinks Lender Solutions provides innovative and comprehensive suite of valuation services and lending technology solutions to banks, lenders and other mortgage industry firms. StreetLinks’ commitment to quality and service, embodied by our partnership approach to clients and appraisers, continues to set us apart as the nation’s premier lending solutions partner. Our products and services are used by thousands of mortgage bankers and appraisers nationwide to simplify and improve everyday business operations. For more information, visit www.streetlinks.com/landing/AppraiserPlus.
Link to streetlinks web site:
An AMC to Keep Pace With?
Q&A with Richard Johnson of Pacer AMC
April 1, 2013
BUZZ: How will you differentiate your company from the other 500 AMCs?
RICHARD: We have created a unique appraiser scorecard. We have an algorithm that measures the appraiser’s self esteem. We find appraisers who set a low fee, never complain when we are a slow pay, and love challenging assignments. We have no dress code. Appraisers just hate that.
We have spent a lot of time picking the best appraisers for our assignments. We call it dialing for dollars. We reward our processers based upon setting new lows.
Because we are the low cost provider we attract the very largest lenders in the US.. These large lenders too have an algorithm that includes input as to the cost of regulation. They have figured out the risk of penalties and fines is somewhere between slim and none. They have lobbyists to ensure that. We have hitched our star to their wagon.
BUZZ: What is this we have heard of your 8 hour Turn Times?
RICHARD: One of the ways we feel we can stay ahead of our competition is we have instituted an 8 hour turn time. We feel it shouldn’t be too hard to get all our appraisals done the same day they are assigned.
Of course we are not unreasonable though if a property is over 250 miles away we allow an extra 2 hours to submit your report.
BUZZ: With all the transparency, disclosures and Customary & Reasonable laws how do you get away with being the low cost provider?
RICHARD: It is really simple. We know our clients love AMCs because they get our services for free. It is the greatest business on the planet. The appraiser pays for the services for the lender. What a racket. We find appraisers who are willing to drive anywhere and do anything for an ungodly low fee.
We don’t worry about compliance because the appraiser signs an affidavit that certifies we have paid them a customary and reasonable fee. Have you seen the CFPB enforce any appraisal rules ? No of course not. Zero risk for lenders and AMCs.
My comment: be sure to click on the link and read the rest of the articled before you let your blood pressure go way up ;> It was published on April Fools Day!!
By Ramir Rodriguez
You received a letter in the mail informing you that your client has filed for bankruptcy. It is this moment you realize that this bad news just became your problem.
Many of us are familiar with the recent bankruptcy filings of Evaluation Solutions and its subsidiary ES Appraisal Services. Peter Christensen, attorney and general counsel to LIA Administrators & Insurance Services, shared in his blog that the total unpaid fees to appraisers, agents, and brokers as listed in bankruptcy documents is $11,048,411.97! This is a remarkable amount. Evaluation Solutions’ bankruptcy documents accounted for $9,349,612.97 of the total amount and a separate filing of its subsidiary was for $1,698,799.
I Received A Notice… Now What?
If you received a notice regarding Evaluation Solutions/ES Appraisal Services’ (I will refer to them as ES) bankruptcy you may be wondering what the next step is to try and recover money owed to you. Yes, a client’s bankruptcy can be costly for you, but most importantly, not adhering to the rules of the bankruptcy process can cost you significantly more.
Knowing the types of bankruptcy, how to play by the rules, and what you can (or can’t do) will help you understand the scope of your problem and ensure you don’t get in trouble.
Types of Bankruptcy
There are lots of information you can gather from the bankruptcy notice from ES to help you understand the nature of this problem. But first you must recognize the type of bankruptcy ES is filing.
Chapter 7 – This type of bankruptcy is the liquidation of remaining assets to distribute among its creditors.
Chapter 11 – This a financial reorganization of a business, which allows your client to function while they follow court ordered debt repayment plans.
Chapter 13 – Similar to Chapter 11, but rather than a business filing bankruptcy it is the individual reorganizing and following a debt repayment plan.
Ideally, it’s more favorable on your end if your client files for either Chapter 11 or 13. These types of bankruptcy give your client a breather until they figure out how to repay.
If your client however files for Chapter 7, which is what ES filed, not only will your chances of getting paid be reduced, but also you may be waiting a long time (even years) for this type of case to be completed.
Take A Number
At this point you are probably frustrated and would like to call someone to attempt to collect your money. Stop right there! Your actions can get you in deep waters. If you attempt to make phone calls to ES’s accounting department, send nasty letters, or try to file a lien (which some appraisers have done in other instances and is not recommended), you will face penalties.
Assuming you do get some money owed to you, you will have to wait in line. This is the second item you must understand. Here’s the payment order:
- Lawyers, administrative expenses, and other professional services that are involved with the work of filing the bankruptcy.
- Secured claims, including mortgage holders.
- Priority claims, including wages and taxes.
- Unsecured claims, which is where you as an appraiser may be categorized.
- Equity claims, including stockholders.
So curb your frustration because all you can do at this point is wait.
What Can You Do While You Wait
Sure you have to wait for ES’s bankruptcy process to take its course, but there are some things you can do in the interim. Since this case can drag for a long period of time, you can do the following:
- Consult with your CPA about taking a deduction on your taxes for the bad debt. If you manage to receive some money owed to you after the bankruptcy case is settled you can claim it as income at that time. See your accountant for more details.
- It does not apply in this case, but if you have a future instance where your client files for Chapter 11 or 13 and wants to continue a working relationship, it may be to your advantage. Of course your immediate reaction is to quickly say “no way!”, but understand that Chapter 11 and 13 require debtors to stay current on all accounts moving forward. This means you can add a fee to your appraisal fees to recover what was lost, stricter payment time frames, and maybe exclusivity as other appraisers may not take another chance. Keep in mind that the best way to reduce or eliminate risks is to get paid up front.
Improve And Move On
Now that you’re somewhat familiar with the types of bankruptcy, payment pecking order, and what you may be able to do as the bankruptcy takes its course, it is important prepare for the future. This means assessing your appraisal business and how to prevent this problem from happening again.
First, create a process on how to screen new clients by knowing their payment history. There are many tools and resources you can use online that are free or for a small fee. Second, improve your accounts receivable aging management procedures. Just because they are still “current” doesn’t mean it does not require all of your attention. Current receivables can quickly turn into problems if you don’t pay attention. Last but not least, be persistent and tough but professional with your collections.
If you have an AMC bill in your state, read it and educate yourself on how it can help your appraisal business. There are sections in most AMC bills that require AMCs to pay by a certain time frame. For example, Texas AMC bill requires AMCs to pay appraisers within 60 days.
Also consider resources available to you such as factoring your receivables where the risk of non-payment is transferred to the factoring company. In this case, you can get paid quickly without the responsibility of collecting and liability of non-payments.
No small business is immune to the unexpected, but you can certainly minimize you risks as work towards a successful 2013.
Guest blogger: Ramir Rodriguez represents Treasure Valley Factors in Fruitland, Idaho. He has helped real estate appraisers understand how factoring can can help their business since 2009. For more questions about factoring accounts receivables, please email him at firstname.lastname@example.org or visit his blog Factoring Helps or website www.treasurevalleyfactors.com. Twitter: @RamirRodriguez "Like" Treasure Valley Factors on Facebook!
Another great article from the Illinois appraisal regulator
The argument to promote evaluations as an alternative to appraisals was driven by rural lenders who feared a shortage of appraisers might slow down closings. That was it. That was the main beef. A simple supply and demand issue for banks in the boonies… twenty years ago! An evaluation was regarded as “a generally simpler assessment
of real estate market value.”
Evaluations versus Appraisals (2012) —
The most recent incarnation of the Interagency Appraisal and Evaluation Guidelines emerged in December of 2010. Section XIII provides the suggested content of a evaluation…“a generally simpler assessment of real estate market value.
(BPOs cannot be used for evaluations.) A valuation method that does not provide a property’s market value or sufficient information and analysis to support the value conclusion is not acceptable as an evaluation. For example, a valuation method that
provides a sales or list price, such as a broker price opinion, cannot be used as an evaluation because, among other things, it does not provide a property’s market value.
If you want to know what the feds meant by “a simpler assessment”, go ask them. I’d love to hear that explanation myself.
Many AMCs, while eager to take on the evaluation function, fail to understand who is ultimately responsible for the entire program. (Their clients, the lenders)
Banks cannot hand‐off liability to AMCs like a hot potato just because they can’t be bothered managing their own evaluation program. If an AMC makes a mess of the bank’s
evaluation program, the responsibility of the failure falls squarely back on the bank.
Turning an evaluation into an USPAP compliant appraisal takes far less effort than trying to cobble together a cadre of competent and reliable evaluators to provide something that by state statute,must fall short of an appraisal.
My comment: This is an issue that has been around since the early 1990s. What does an evaluation mean? Cheap and fast. Banks want them. AMCs would love to provide them. I have no idea who would do them and what they look like. I have no idea how a licensed appraiser would do them as they must be USPAP compliant.
Seems easier to me just to do an appraisal. Maybe a shorter appraisal that is not 30 pages long with 9 comps and pages and pages of explanations!! Now that is a very practical idea. Just go back to the past pre-HVCC and incredible scope creep since then.
AppraisalPort Weekly Poll Analysis – client requests for clarification
By Steve Costello, AppraisalPort Product Manager
I receive a lot of e-mail from appraisers commenting about the time they spend working on requests for clarification on appraisals they have submitted to their clients. That prompted me to post two polls related to these client requests.
“What percent of your assignments result in a request for clarification from the client?”
The results were a little different than expected with nearly half (45%) of the 4,691 respondents stating that they only get a clarification request 0%-10% of the time. That is actually lower than expected based on what I hear from appraisers directly.
The second most popular answer was 11%-20% of the time with about 19% of the vote. The number of votes continued to get smaller as the percentages increased (13% chose 21%-30% while another 8% answered 31%-40%).
After that, things take a bump up. Nearly 15% of the appraisers responded that they get a request for clarification on more than 40% of their appraisals. I can see where that level of requests could make it difficult to get the new work completed on time.
“How often does your client requests information that is already in the original submitted report?”
In other words, we are asking how many of the above requests for clarification were un-necessary because the client already had the needed information.
This was a popular poll with 5,632 responses and the overwhelming answer was “often” with 60% of the vote.
About 27% responded that they “rarely” run into this situation while only 1% said it “never” happens to them.
Another 12% answered that this “almost always” happens.
So it looks as if we have a fairly large number of appraisers being asked for additional information that is already contained in the report.
My comment: nothing new here but I do like the analysis of the data. I love working for my estate clients. The dead people never request any clarifications (except maybe their executor contacts me when I have the wrong subject property address) ;>