I see two solutions to these problems.
1. Either regulate ALL lenders equally or make banks abide by the same rules regarding appraisal orders. In short…create a level playing field for everyone.
2. I have no problem with AMCs acting as clearing houses for appraisal orders. I do however have a SERIOUS PROBLEM with appraisers footing the bill for this clearing house. In a nutshell, AMCs were allowed to proliferate because they provided lenders with a way to cut costs by outsourcing the appraisal ordering process. In fact AMCs sell their services to lenders proclaiming to be a “value added service”. How about those instances where an AMC was involved and yet HUD-1 states that the appraisal fee was $400. Have the lender & title company not deceived both parties involved? The actual cost of the APPRAISAL was only $200+/-. The rest went to “value added services. I am amazed that some brilliant law office has not caught on to this deception and petitioned to have a law created to prohibit it. Every lawyer who has ever participated in filling out a HUD-1 has assumed a legal liability by filling it out incorrectly…yet they continue to do it in every state every day. That being said…now lets move on to my 2nd solution. The government needs to make lenders pay for those “value added services” that AMCs provide out of their own pocket and (or) pass it on to the borrower. It was originally their responsibility and there is no reason to pass the fee on to the appraiser. Doing so will only result in poor quality appraisal work (completed by the lowest bidder with the least amount of experience). If someone has a better solution…please write me at investsmart@earthlink.net

David Feather