This is a YouTube video titled "🚨 Why are Appraisals Paid up front? 🚨" containing a monologue or single-speaker explanation recorded on October 19, 2021. The speaker discusses the reasons behind upfront appraisal payments in the housing market, focusing on the financial risks for appraisers and lenders, and the broader economic impact of these fees.
With the housing market busier than ever before, it's kind of become common practice for appraisal payments to be collected up front. Here's why. If the appraiser puts it on a schedule, they want to make sure everyone's committed. And if they do the job, they want to make sure their paycheck's there at the end. Then from the mortgage world perspective, and lenders are not appraisers, we have to just account for the money that the appraisers are owed if a loan falls through. And Fannie Mae shows that about 20% of mortgages do fall through across the country. Unfortunately, that's all on the lender. So lenders already have tons of verification fees they have to pay for anyway. Then if you tackle an extra 500 bucks for the appraisal, well, now there's a lot of fees that have to go somewhere. And that increases future mortgage rates. So it hurts everybody is really a disservice to the entire economy.
