Appraisers FAQ
Is the HVCC really going to go into effect? I heard it’s delayed.
Yes, the HVCC will be implemented. In a question-and-answer session after testifying before Congress, FHFA Director James Lockhart offhandedly said that it may be a little behind schedule, from one to three months, from the FHFA’s perspective. However, it was presented like a footnote, with no formal announcement made to the industry telling lenders to slow down, which is telling. Since conventional mortgages are now the norm again, Fannie and Freddie are more important to lenders than ever, and the lenders can’t afford to be wrong about compliance. Overall, they’ll proceed toward a January 1st deadline to be safe. For more information about the HVCC overall and the deadline, visit our AppraisalPress newspaper website at http://www.appraisalpress.com.
My lenders don’t even seem to know about the HVCC, so why would they do anything?
Most conversations between appraisers and lenders are actually with the "front lines": loan officers and loan processors. Even though they may not be aware of the changes yet, the "back office" at the lender is often well aware, which is one of the reasons why so many lenders have chosen to use AMCs lately. That being said, we’re sure that some lenders don’t know about it yet and are thankfully still sending orders direct to appraisers and have no plans right now to change. Those are exactly the lenders we need to get to first, before an AMC does, and before you lose 40% or more of your fee.
Either way, whether a lender is moving toward HVCC already or not, it’s essential that we get the "appraiser’s point of view" and an appraisal-friendly solution like Mercury in front of every lending executive, every loan officer, and every processor. Over time, every lender will do something. What they do, whether they choose an AMC or Mercury or some inhouse hybrid, depends on what information they have. We need to get them information that benefits you.
It can’t be true that my loan officers won’t be able to talk to me under the HVCC. How will they order appraisals?
The HVCC mandates that they separate anyone on the sales side of the business (loan originators — the loan officers and loan processors) from appraisers, or they put in place "prudent safeguards" to ensure that a commissioned employee can’t influence an appraiser. Most lenders will take the legally safe route and place a hard firewall between loan origination staff and appraisers. That firewall can be an AMC, or something like Mercury. Even if they allow loan originators to talk to appraisers, they’ll want an audit trail of all the communications, to be able to prove there was no coercion, and Mercury provides that audit trail for them. It’s a solution to their needs no matter what level of separation they decide is prudent.
What about mortgage brokers? I heard they can’t order appraisals anymore. That’s good, isn’t it?
It depends on your perspective. It’s easy to blame mortgage brokers, and indeed there were bad ones who pressured appraisers. (But let’s not forget that the HVCC sprang up from a lawsuit filed by the NY Attorney General against WaMu and eAppraiseIT for pressuring appraisers, where mortgage brokers were not involved at all with the appraisal process.) Nevertheless, under the HVCC, mortgage brokers are banned from controlling the appraisal process. But since mortgage brokers rarely used AMCs, all those appraisals that used to come from brokers directly are at risk of coming from an AMC at steeply reduced fees. We believe we can capture the lenders who would have used an AMC if there were no alternatives and instead send you the appraisal report without losing that fee. Also, we have a method in Mercury by which the mortgage broker can still order an appraisal, while still maintaining the independence of the appraiser and legally complying with the requirement that it be the lender who officially is the one dealing with the appraiser. With Mercury’s "double blind" feature on top of that, lenders, appraisers, and mortgage brokers are all still protected.
Why do you really need my contacts? Can’t you do marketing using mailing lists that you buy on your own?
We can, and we are. But traditional marketing databases aren’t nearly as comprehensive or detailed as the database of contacts collectively maintained by appraisers. There isn’t a list that can be purchased with the phone numbers, email addresses, and extensions of every loan originator at every bank, savings and loan, credit union, and mortgage company. But there are over a million names in the contacts databases of appraisers on XSites, with all that valuable info.
Those loan originators, even if they don’t know about the HVCC yet, are incredibly influential inside their companies, because they put the money on the board and everyone knows it. We can’t use the database to reach those critical people without each individual appraiser’s permission, so that’s why we’re asking. It will give us an incredible grassroots, front lines advantage competing with AMCs and others who want to put themselves between you and your clients. Yes, we’ll wind up being in the middle too, but you have to ask yourself who you trust most to be in that position. We’ve earned that trust over the past 23 years of fighting for appraisers’ rights and interests.
I understand you may need the contacts. But why would I further agree to let you market to my contacts "on my behalf", using my name? Why would that help?
You of course have the option of just letting us email your contacts without using your name too, if you’re more comfortable with that. We know that most people will be very nervous about allowing us to send an email on their behalf. But, it’s very valuable if you do, and it’s extremely safe.
The reason why it’s valuable is simple: We can send emails as "a la mode" but they’ll often get trapped as SPAM by the lenders’ servers. However, your email address is already on what’s called a "white list" of legitimate business contacts, since your loan originators email you and you email them back. Your email address gets past all the filters. All we want to do is send emails from your CertMail account in which you personally introduce us to your contact and encourage them to call or email us, or to take our calls and emails when we solicit them.
Most importantly, EVERY SINGLE EMAIL WE EVER SEND USING YOUR NAME WILL BE PERSONALLY APPROVED BY YOU BEFORE IT GOES OUT. Each one will come to you first, with a link saying "Yes, I approve this" or "No, don’t send this". Until and unless you agree, it will not be sent. This is the only method by which we’ll ever send anything in your name. We will not mail printed materials or make phone calls under your name, ever. You have complete control. All we want is to get an introduction, and we’ll take it from there on our own without needing your name.
Can’t I just let my lenders know about Mercury myself?
Of course, and we hope you will anyway! But honestly, as a whole, appraisers aren’t really salespeople. We are. It’s what we do for a living. We can sell Mercury versus AMCs to your lenders better than anyone on the planet. Plus, after the HVCC takes effect, you can’t solicit your contacts anymore. We can, because we aren’t subject to appraisal regulations. Appraisers complain about that "loophole" when AMCs exploit it, but this time it applies to us, and we’re on your side. Use it to your advantage.
Obviously, our targets are lenders and mortgage brokers, and that’s who we’ll focus on. They’re the "low hanging fruit". Where it’s unclear what type of contact it is (many of you haven’t religiously assigned contact types), we’ll send emails first identifying the fact that this is a lender and mortgage broker service, so they’ll understand that it may not apply to them. We’re not seeking to redirect your non-lender business through Mercury at all, and we’ll make that clear. Those are the types of low-volume but critical clients which we believe should go directly to your XSite, and they aren’t affected by the HVCC anyway.
What if they call me instead of you? What should I say?
Tell them the truth (that you’re working with us) and make your point quickly and without ranting or being angry. Remember, this is about advising and selling, not complaining.
Tell them that you’re confident Mercury will address their changing "regulatory compliance" needs while also protecting your business, and that they should contact us directly so we can show them how it helps them comply with the HVCC, GLB, and much more. Shoot us an email letting us know that they called you, and we’ll know to follow up.
The contacts are yours and you can revoke permission for us to use them. Any contacts with whom we don’t have our own business relationship by then (i.e., they’ve called or emailed us, set up an account with us, etc.), will have the information you provided purged from our database at your request.
We track the source of contact information very carefully. Realize of course that many times we may already have a contact’s name and information from another source too (either another appraiser or publicly available lists), so that doesn’t mean all of your contacts will never again hear about Mercury from us. It just means that the information you specifically provided will be removed and not relied upon in the future.
Will promoting Mercury get me blacklisted with the lender? I don’t want to cause trouble and lose orders.
Lenders have to move to something, somehow, and soon. You’re helping them get a no-risk shot at rapidly finding a simple solution. Just like Mercury or XSites in the past, a lender can evaluate the whole system with no headaches and hurdles. They just log on and start ordering. That’s not the sort of advice that gets appraisers in hot water with clients.
Your clients already know about your competition anyway, and they use them too. Failing to promote Mercury just means that you’re virtually guaranteeing that you’ll have no influence over the direction they go, and they will indeed choose some sort of system to comply with the HVCC, and to manage the complex process of reducing legal liability even outside the HVCC.
Every day, for years, we’ve heard from appraisers who forward us emails and letters from lenders announcing that they’ve chosen some AMC or required some piece of software or some appraisal ordering portal. When we ask if the appraiser ever suggested an alternative to the lender before the notice arrived, the answer is inevitably "No". If you don’t talk to your lenders about a solution you prefer, don’t be surprised when they don’t choose it.
Is Mercury Network an AMC?
No, Mercury is actually a "VMP", which stands for "Vendor Management Platform" (hence the website, http://www.mercuryvmp.com). We provide a technology foundation — web interfaces, plus desktop and server-side software — on top of which the complex real-time stream of orders, status updates, communications, and documents flow between lenders and appraisers. We address many of the labor-intensive aspects of ordering, managing, reviewing, and tracking appraisals by using technology. AMCs tend to be less technology-centric, and wind up bulking up on manual labor to track down appraisers and review reports, which also drives up their costs. Appraisers pay for it by handing over larger fee splits to the AMC than would otherwise be necessary.
We do gain some of the benefits that AMC’s have traditionally enjoyed. We aren’t subject to state licensing laws or the HVCC, so we can communicate with lenders even after the HVCC takes effect.
How much of my fee will accepting a Mercury order cost me?
The maximum you would pay for accepting a Mercury order would be $13.75. In our conversations with appraisers at conventions and seminars around the country, that small fee gets universal applause. And, since you’re in control of your fee, we encourage you to bump up your Mercury fee schedule by $15 or so to cover the cost completely.
If the lender chooses to dictate an appraisal fee which is below the median non-AMC fee in a given region (usually calculated on a county-wide basis), then the lender will pay the fee and the appraiser will pay nothing. There will be cases where AMCs also order through Mercury Network (it affords them access to a larger pool of appraisers with better technology), and they of course would almost always wind up below the median, and therefore show up as "free" orders to the appraiser. If you’re taking a fee cut, we don’t expect you to pay for the order.