This is an amazing report that explains 20 self-serving benefits for why Appraisal Management Companies (AMCs) should support an industry-wide implementation of the full-fee, customary and reasonable payment model when requesting appraisal assignments from real estate appraisers.
Explained in detail, 20 distinct benefits are given:
Paying appraisers their full (or retail) fees…
1. Removes the single-largest barrier to acceptance of AMC as legitimate business partners.
2. Increases the supply of appraisers willing to work with AMCs.
3. Encourages new appraisers to enter the appraisal profession.
4. Leads to better control of appraisal quality.
5. Lowers costs for recruiting, quality control, and rework.
6. Enables AMCs to gain market share.
7. Provides AMCs rationale to charge lenders for the actual value the AMC brings to the transaction.
8. Enables AMCs to provide clients quantifiable means with which to compare AMC alternatives.
9. Reduces third-party risks described in numerous FFIEC Financial Institution Letters and agency guidelines.
10. Promotes less contentious treatment of AMCs.
11. Takes the subjective “customary and reasonable” fee requirement in the Dodd-Frank bill off the table.
12. Paves the way for nationalizing AMC regulation.
13. Provides clients better overall service quality.
14. Preempts external efforts of factions to force AMCs to pay up.
15. Is the most ethical thing to do in a fair and equitable society.
16. Allows for significantly improved vendor relations between the AMC and the appraiser.
17. Reduces the risk that disgruntled appraisers will draw the attention of federal regulators.
18. Provides joint marketing opportunities because appraisers will see the AMC as worth promoting.
19. Opens the door to a better borrower experience because the appraiser doesn’t enter the home angry.
20. Opens the door for joint publicity efforts because appraisers will feel like partners.
There are two methods of curing the mischiefs of faction:
remove its causes or control its effects.
~ James Madison
