Received a copy of our appraisal....I've got a question before I confront my LO

[IamMrsJones]

Of course, the appraisal is full of real estate mumbo jumbo that means something to someone, but it basically means it's an intact house worth more than we're buying it for. Great. BUT....

On one of the last pages, it mentioned that his fee for the appraisal was $315. We had to pay Wells Fargo $485. What happens to the other $170? We didn't get a chance to shop and pick out an appraiser. We were told this is the cost and bring us a check (which we did). Where does the extra money go and am I entitled to it back?

[Elcid89]

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@IamMrsJones wrote:

Of course, the appraisal is full of real estate mumbo jumbo that means something to someone, but it basically means it's an intact house worth more than we're buying it for. Great. BUT....

On one of the last pages, it mentioned that his fee for the appraisal was $315. We had to pay Wells Fargo $485. What happens to the other $170? We didn't get a chance to shop and pick out an appraiser. We were told this is the cost and bring us a check (which we did). Where does the extra money go and am I entitled to it back?

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Lenders are not supposed to markup third-party services, and Wells is being sued over allegations like this one.

I would bring the discrepancy to the attention of your LO and demand that the excess be applied to closing.

[jadeite788]

+1  good looking out.

[Bella143]

I work in the mortgage business. Since the laws changed a few years back, all appraisal orders have to go through what's called an AMC (Appraisal Management Co.) The remainder fee of what you paid goes to the AMC. It is totally legit and every lender/brokerage has to do this.

[IamMrsJones]

Thank you. Bella, I emailed my LO for an explanation and that is what she said to me.

[Elcid89]

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@Bella143 wrote:

I work in the mortgage business. Since the laws changed a few years back, all appraisal orders have to go through what's called an AMC (Appraisal Management Co.) The remainder fee of what you paid goes to the AMC. It is totally legit and every lender/brokerage has to do this.

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The assertion that is being made against Wells is that the AMC is an owned subsidiary, so in the end Wells is making a profit on the markup.

Personally, it's unethical at the very least.

[rbizzle]

I've worked for an Appraisal Management Company for the past 2 years and for 8 years prior to that i worked for an appraisal company, but for there to be $170 fee to the AMC is crazy!  Our fees are 1/2 that!

[DallasLoanGuy]

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@Elcid89 wrote:

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@IamMrsJones wrote:

Of course, the appraisal is full of real estate mumbo jumbo that means something to someone, but it basically means it's an intact house worth more than we're buying it for. Great. BUT....

On one of the last pages, it mentioned that his fee for the appraisal was $315. We had to pay Wells Fargo $485. What happens to the other $170? We didn't get a chance to shop and pick out an appraiser. We were told this is the cost and bring us a check (which we did). Where does the extra money go and am I entitled to it back?

---

Lenders are not supposed to markup third-party services, and Wells is being sued over allegations like this one.

I would bring the discrepancy to the attention of your LO and demand that the excess be applied to closing.

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it is not marked up

i bet the difference is the appraisal management co fee

[DallasLoanGuy]

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@Elcid89 wrote:

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@Bella143 wrote:

I work in the mortgage business. Since the laws changed a few years back, all appraisal orders have to go through what's called an AMC (Appraisal Management Co.) The remainder fee of what you paid goes to the AMC. It is totally legit and every lender/brokerage has to do this.

---

The assertion that is being made against Wells is that the AMC is an owned subsidiary, so in the end Wells is making a profit on the markup.

Personally, it's unethical at the very least.

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actually it is quite ethical and perfectly legal.

maybe their fees are high..... but for the lender to OWN the amc? that is awesome. the lender can fire appraisers who suck.

from time to time my company orders from a large national amc when we have no appraisers in the area of the property.... we have way more problems with them than we do with our inhouse amc