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FNF AppraisalsAIC Conference

May 2009

Innovative Lender Solutions

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AMC’S ROLE & OBJECTIVES

Role - - Contract Management &

Pipeline Management (process) backed by Technology

Objectives- Maximize Efficiencies

- TAT’s, Quality- Minimize Costs

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VALUE ADD – ENHANCING APPRAISER SERVICES

•FNF manages appraiser pipeline, monitor work in progress and adjust daily order assignments to maximize appraiser performance

•Provide pre-delivery quality control – “another set of eyes” before delivery to client

•Offer dispute resolution – mediate market value and client disputes, keeping appraiser and client at arm’s length

•We invest heavily in electronic interfaces (portals) assuring smooth work flows and delivery confirmation. Minimizing appraiser capital investment.

•Financial Management – we prepay appraisal fees before lender payment taking responsibility for collections

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VALUE ADD – ENHANCING APPRAISER SERVICES

• FNF does not compete directly with local appraisers – no in-house network of appraisers

• Provide access to local and national clients not otherwise available to an appraiser

• Provide expanded client base & stable income

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•AIC – Annual Advisory Council – sharing/consultations•AIC – Educational sessions – ie. Evaluation of Appraisal Contracts• Re-Fees? Open dialogue between AMC’s, appraisers, AIC, lenders about the value of the appraisal and AMC’s management• Increased education and understanding of AMC’s•Initiate an emphasis on Undue Appraiser Influence

WORKING MORE COLLABORATIVELY ?

Independent Appraisers

FNF

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FACT or MYTH?

•Appraisers working with AMC’s are “non-accredited”, inexperienced, incompetent form fillers?

•AMC’s force appraisers to work “for such-and-such” fee?

•Is it realistic to conclude that “you get what you pay for” when it comes to AMC appraisals? (low price = poor quality)

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FACTS•63% of residential appraisers work with AMC’s (over past 5 yrs- ** U.S Stats. – ) •majority of appraisers who do not work with AMC’s would do so if they were to earn higher fees – (confirming it’s all about the money-** U.S. Stats.)

• All appraisers must be licensed where necessary and accredited members of Assoc. requiring levels of education and competency.

•In FNF’s case, all reports are vetted through a quality control process ensuring quality levels meet expectations and create a level playing field.

** U.S. Stats – October Research Corporation National Appraisal Survey (Volume 2- 2007)

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MYTHS -

•Is it realistic to conclude that those appraisers working with AMC’s are “non-accredited”, inexperienced, incompetent appraisers?

MYTH: this generalization fails when you consider, all appraisers have accreditation and licensing where required. Majority of residential appraisers work with AMC’s or have within past 5yrs.(U.S. stat extrapolation) – Are the majority inexperienced etc?… I think not.

•Is the argument that AMC’s force appraisers to work “for such-and-such” fee -?

MYTH: comment is a mischaracterization – AMC’s and appraisers nail down an agreement re-work product, service levels and

the fee.

If they can’t agree on a fee, any service engagement ceases. Appraisers therefore willfully enter these business

arrangements.

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MYTHS -

•Is it realistic to conclude that “you get what you pay for” when it comes to AMC appraisals? (low price = poor quality)

MYTH: comment is unfounded. Have you ever done a job in which the work completed was more difficult than the fee paid for the work justified? I think most would say yes.

So why then didn’t you slough it off, turn in a lousy product?

Because as a professional you wouldn’t do it. -- I don’t believe an appraiser would routinely produce better or inferior work depending on fee.

Further, AMC’s routinely check report quality against content rules and Association accreditation expectations (balancing the playing field)

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Summary

•Recognition that there are a number of myths regarding AMC’s and the relationship with appraisers.

•Imperative to educate and understand roles, the obligations and responsibilities to make informed business decisions.

•General consensus that Appraisers and AMC’s are worth more to their clients than the fees being paid. However, a focused and united approach is necessary ………..

Open Collaborative Dialogue between appraisers, AMC’s, lenders, AIC and related associations about the “Value/Pricing” equation is a starting point.

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Innovative Lender Solutions