So overall, lenders seem to be content with HVCC. That’s one out of four. But how about appraisers?
The popular method for lenders to comply with HVCC has been to contract with an appraisal management company (AMC) to handle the appraisal process (though some are managing the process internally). In this arrangement, the appraisal order is placed with the AMC by a non-production person in the lender’s office, the order is assigned on a random basis to one of the appraisers in a pool, and if the appraiser accepts the order, the appraisal goes forward. Sounds simple enough and workable, right? Most appraisers I’ve talked to are somewhat ambivalent on the issue. They’ve lost business from long term, cultivated, relationships but picked up business from others in the random assignment process. There’s a middleman now (remember the AMC) and middlemen have to get paid. We’ve all heard of AMCs demanding appraisers to accept a lower fee for reports to be on their panel. A common refrain is less qualified appraisers that otherwise might not be able to get business on their own, gladly step in on these terms with the result being poorer quality appraisals. So, appraisers have had to deal with that issue, but established ones seem to have figured out how to get their fair share.
Additionally, some appraisers lament the fact that when they realize a value is not going to work, the line of communication to the loan officer is broken, preventing them from discussing the issue and potentially stopping the order, saving time and money for all involved. And remember, there is still a relationship component in business, a fun part aside from just making money. And HVCC has essentially eliminated some long time relationships between loan officers and appraisers. But overall, the sense I get from appraisers is a position of neutrality with respect to HVCC. There are positives and negatives, but at the end of the day it’s a push; just different. And what’s not in the mortgage business these days?
Ah, but now it gets more interesting. Two (lenders and appraisers) seem to be okay with HVCC but how about consumers and loan officers? Stronger opinions emerge, and those we will begin to tackle next time…