AMC’s - “Appraisal Management Company”
These organizations have come into existence in an attempt to fulfill government regulations to ensure that banks could not commit mortgage fraud like the practices seen prior to 2008. In an ideal world these would be middle men who ensure that banks can’t pressure appraisers with a predetermined value and would ensure that banks have a steady rotation of high quality appraisers. However, many times the real effect has become that AMC’s
Apply pressure on behalf of the bank in ways that an appraiser can not file a suit against the bank with the FDIC and other regultory agencies.
Farm out appraisals for weeks (and months in some cases we’ve seen) to find the cheapest appraiser, regardless of competency, location, or experience, so that they can’t keep the difference.
Apply ridiculous stipulations to appraisers to justify that they are worth their charges. For more read here: http://appraisersblogs.com/amcs-add-weeks-2-appraisal-process
Perhaps one of the worst: “Is the property a working farm?” Recently we got the revision request of a 5,445 square foot lot. The AMC slowed the process down by 24 hours because they needed us to comment if the lot, in the middle of a town, with dimensions of 105’ x 140’ x 71’ x 152’, was an income producing farm.
Undisclosed Information / Miscommunication
There are a lot of people in the mortgage process, and a lot of information to change hands. Thankfully in the modern world, documents can be sent immediately. However, if the appraisal is 99% done when a vital piece of information is delivered… the appraiser may need to start over from scratch. Of course other members of the process may pass this off as “The appraisal is taking a long time,” to save face instead of, “We forgot to tell the appraiser there are only 5 acres with the property being sold instead of the 105 acres in the public record…” If you are a part of a transaction that needs an appraiser, disclose everything you know. It will save you time and headaches later.
Repairs
One thing that could speed up your closing by a week is having all necessary repairs (depending on the financing being obtained) completed BEFORE the appraiser arrives the first time. If there are any needed repairs (for FHA/USDA/VA - chipping and peeling paint for example), if these are not completed at the time of the initial inspection then the appraiser will have to return to the property after the report is completed to ensure that the repairs meet the financing standards.
Save yourself a week of time and a re-inspection fee, and find out what needs to be done prior to the appraiser arriving.
Banks
Banks have a lot of people and a lot of assets and sometimes your $50,000 loan gets lost in the multi-million dollar cracks.
Wrong product orders. Many times the lender knows nothing about the property being appraised other than what they are told. This can lead to Manufactured Homes being ordered as single family homes, multi family dwellings being ordered and SFR, or commercial dwellings being ordered as residential… We’ve had all three, this month.
Slow turn around. Ultimately the underwriter of the bank makes the calls on a loan based on the inspection of the appraiser. As such, the appraiser often must contact the lender to obtain guidance on how to proceed. Again, with lots of loans being juggled, we’ve waited in excess of 2 weeks for answers to simple questions (and sadly sometimes, the answer doesn’t address the questions asked).
Heavy Market Volume Seasons
Some seasons (Spring and Summer) see higher volumes of appraisals needed. Sadly, there aren’t migrant appraisers who can move into town for only this time of year. That means that turn times will lengthen. The alternative is to trust less qualified individuals to value your single largest investment. Fannie Mae is currently trying to push through “No Appraisal Loans” or “Property Inspection Waivers” or “A really fast way to end up underwater on your home loan…” Don’t get duped, get a professional opinion.
Complexity
Complex properties take time. If it were as simple as putting numbers in a formula, then Zillow would trust their own algorithms when they buy properties… but they don’t. The process of “problem identification,” appraiser speak for “What are all of the things that I need to consider in the valuation of this property,” can take hours alone, then there is data gathering, data confirmation, data analysis, and report writing. As complexity increases, so does time.
