There is a belief that AMCs should be negotiating rates with appraisers for the benefit of consumers instead of themselves. One company executive strongly believes that this is a topic that needs further discussion.
“It’s an ethical consideration and someone should be asking this question,” Appraisal Logistics CEO Frank Danna said in a company press release. “My company charges a fee for the work we do in connecting lenders with professional fee appraisers who can provide their opinions of value quickly, accurately and in full compliance. But with all of the fees passed through to the consumer, we shouldn’t see some AMCs pocketing high fees that could be passed back to the borrower.”
Some appraisers have been reporting that some AMCs have been retaining as much as 50 percent of their appraisal fee charged to the borrower.
Despite the fact that Appraisal Logistics has invested heavily in third-party audits and certifications to demonstrate its capabilities to lenders, Danna still believes that taking money from appraisers beyond a basic fee is unethical and should be returned to the consumer.
He points out that many jurisdictions around the country were moving toward setting minimum appraisal fees to ensure that professional appraisers are paid fairly. But not all properties will fall under the same classifications.
Some properties, by their nature, are more complex and will cost more to appraise. In those cases, Danna says appraisers need to know they will be fairly compensated, and borrowers deserve to know that someone in the industry is looking out for their best interests.
“It’s not that complicated,” he said. “Lenders should work with ethical AMCs that have earned the trust of the appraisers they hire. When that happens, the borrower gets a fair deal and so does the industry.”