OK so I need to vent a little bit.
The new mortgage appraisal rules have been rolling out over the past few months and still people don't pay attention or listen or read their email or listen to anything I say but they do listen to family or friends. Don't listen to professional Mortgage Companies in Roseville CA, what do they know!
So here is an example on how the appraisal issues are keeping us from having clean and successful Real Estate transactions.
I have a client who has been in contract on a short-sale for well over 3 months now. It's taken some considerable time to get to this point with these folks but the owners bank finally agreed to everything and rolled us out a 10 day period to close the deal! OK!
10 WHOLE DAYS? In THIS MORTGAGE ENVIRONMENT? WHAT'S THE DEAL?
For those of you who don't know, there are new rules surrounding both disclosures the buyer receives up front and the appraisal ordering process.
Upfront Mortgage Disclosure Rules -
I am not going to go into too much detail here but there has been a change in the process from the highest level on how to disclose loan documentation prior to the completion of the transaction. A bank will need to send out disclosures to a new client allowing 3 days for delivery and 3 days for review. THAT IS 6 DAYS FOR DISCLOSURES - remember I had 10 days mandated by the short-sale bank.
My Rant - you would think that a large banking institution would know about the new mortgage disclosure and that the 10 day timeframe is completely unreasonable. Now to make matters even worse I am dealing with a know it all real estate agent who keeps telling me "I haven't heard of these changes and my lenders never make me do this kind of thing!" Dude wake up! Pay attention! It's bad enough that I sent him the new rules changes, straight from the source, via email and he never bothered to pay attention and now he wants to make things up to put drama on the transaction. Now he has made his seller believe that I don't know what I am doing and that the deal is in trouble. Unbelievable.
OK Done with that for NOW!
Now again if you weren't paying attention, like most haven't been, the ordering process for an appraisal on a FNMA mortgage has changed. No longer can I just pick up the phone, call my buddy the appraiser and get him to visit the property as quickly as possible. Making matter worse I now have to deal with a third part company put into place by the GOVERNMENT to help protect the consumer from bad appraisers and appraisal fraud.
Interesting how something that is supposed to protect the consumer ends up coming back to bite them in the end. A traditional fee for and appraisal averages around $350 for the full report and an additional $100-$150 for an investment property. A lender could choose the appraiser who did the best job for him over the many years that they had been doing business and normally chose someone local who would know the neighborhoods and be able to understand the properties actual value.
With the new AMC, Appraisal Management Company, in the transaction fees have gone up $100 and appraisals are being ordered through whomever the AMC chooses. Now I am all for sending someone out there who is not going to commit fraud and has a clean record and all of that but the reality is that the AMC's are taking money out of the pockets of the appraisers who in turn have hired property inspectors for nearly nothing who know little to nothing about the neighborhoods they are doing the research in because the AMC's have turned the appraisal business into a volume based business versus a home based operation that does quality work. Not to mention some of the companies that the AMC's are approving to do the loans are not quality companies at all. Enough of the ranting but I just feel bad for my industry because this makes the process even harder than it ever was, because getting a Refinance Upside Down Mortgage wasn't difficult enough.
Now my transaction is no different than most, there are issues with something and in this case it the AMC who is ordering an appraisal through a non-responsive appraiser. To make matters even worse the real estate agents are also non-responsive making the challenges even more dramatic.
Not having the ability to communicate with the appraiser leave a HUGE void in the process flow and communication. I am going to have to work on dealing with this but agents and buyers and sellers all want to know what is going on and the best I could tell them was, "According to the status email the AMC sent me the appraiser is trying to contact someone to get the door....." now that isn't bad but trying to heard the cats, or real estate agents Roseville CA, is not an easy chore but something I would need to do if I was going to get the appraisal done within the time frame they needed.
This just shows on a small level the trouble with this new found big business of AMC's. You can find another example of a poor AMC and appraiser on my radio show page, AMC Appraisal Issues and Examples . Let me know your experiences with Appraisal Management Companies AMC's by commenting below.
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