Independent Appraisers GSE/Cuomo Proposal 3/19/08

[TN Pro]

The proposistion has it's advantages and disadvantages, as anyhting else would (can't make everybody happy). My major concern is the lack of what we have all worked hard and strived for, our independence. The majority of the accomplished appraisers have busted their @$$ to build their business and clientelle to the point it is now, all to have it rationed out to you one appraisal at a time. In a way, it seems by joining such an organization or whatever you want to call it you lose what most of us strived for and attracted us to the profession in the first place. In essence, those that have busted their humps to build their business will no longer be at any benefit from those that just eeeek through like doing the bare minimum. if i am wrong please correct me, and I applaud the originators effort. A majority of the laws and regulations to control the very mentioned problems are already in place, they just lack enforcement by compotent people. Would it not be easier to rework the system already in place than to start all over from scratch??

Good post

Dean

 

[timd354]

There appears to be no stomach to punish incompetent and unethical appraisers and even less lenders who pressure. I've complained to my state appraiser board about specific instances of pressure and their response was that I needed to report it to someone else.
I've complained to the Appraisal Foundation and others about appraisers who openly advertise free comp checks and nary a response.
The big push to licensing in the early 90's was the supposed fix for appraisal problems which was more or less a joke.
The crux of it is that the appraiser must be independent else he runs the risk of being an advocate. Then the question is how do you ensure that independence.

One way you do not fix the problem is by having all of the appraisers sacrifice themselves upon the altar of non-enforcement. Why should we shoot ourselves in the head because the lenders and the regulators have not enforced the laws and regulations? I am sure as hell not willing to sacrifice my business life in order to do penance for the sins of others. I have already sacrificed huge amounts of income and lost much business and many clients because I have been honest and ethical....I think that I have already paid too much for the sins of others. I am not asking for anything special, I am just asking to be allowed to compete on a fair playing field that will allow an ehtical appraiser to grow his business by providing superior service and a superior work product.

This mortgage meltdown is the worst on record and I believe that there is a reasonable chance to get rules on the books that will actually be enfoceable this time. The rules do not have to include collectivizing an entire industry...take a look and see how collectivization of agriculture worked out for the Soivets.

Some people seem to think that we have to destroy the appraisers in order to save the appriasers.

I am not willing to sit around without a fight and wait for the IVPI or anyone else to drop me a crumb once in a while in the hopes that they will drop me enough crumbs to feed my family, pay my mortgage and other bills, including my health insurance, which runs $1400 month for the family.

I will back the IVPI or anyone else who is willing to implement real solutions to insure independence as long as those solutions do not include collectivizing the system and killing the American dream of those of thus in the appraisal business. I mean is there anything more beautiful than the American dream, which in its essence, is nothing more than providing a free people an open and honest opportunity to compete in an open market system within their chosen field?

 

[Mike Boyd]

I have to agree with timd. The appraisal industry has more problems than those experienced by a few appraisers.

I also vehemently oppose all the hyperbolie that the problems experieced in 1989 and today's problem were caused by bad appraisals. That is simply NOT A FACT. In 1989 it was caused by crooked Banks and S&Ls. They may have employed crooked or easily influenced appraisers but that is like blaming a murder on the weapon. The current problem was caused by lenders accepting and promulgating loan programs that a borrower had no chance of ever repaying or even making the monthly payments. Once prices started to inflate, the appraiser had no choice but to often use those inflated sales as comps. THAT was the direction the market was heading and exactly what we have been trained to do. Buyers were often lined up waiting for sales offices to open to take bids on houses. What was the "most probable selling prices" when this was going on?

Nor can I accept any proposal that supports an AMC. If you want to call them Service Providers but not have them involved in the appraisal process that would be OK. With an AMC, no matter that their fee will be separate, they will always use the low bidder as a feather in their cap to wave in front of their client to demonstrate how much money they saved the lender. Why have this new organization if there is still an AMC waiting in the shadows to undermine them.

I don't have a solution other than to make it like the old FHA roster program where FHA assigned the appraiser. You can do that with what you have proposed but you already have way too many people forcasted that will be needed. I even think this is something FHA could do from their HOCs by just going back a few years and studying their system.
since HUD is the "oversight" for Fannie and Freddie, why not? By the way, FHA also took care of disciplinary situations and they did the training.

 

[Zmcraney]

A simpler solution, if it could be done, would be to make the originators buy back the paper if they default within a certain time period. Don't you think that would make the mortgage brokers/loan officers/etc think twice about calling uncle skip to run out and put the rubber stamp on the property?? For example, If Bank A originates a loan, sells it off to Fannie or freddie or whoever the flavor of the week is. Let's say that if within two years the loan goes into default Bank A has to buy the paper back from whoever it was sold to. If this could be done wouldn't it make lenders/brokers think twice about hiring skip to put some unrealistic value on a property?? Just asking

 

[George Hatch]

timd354,

If it wasn't you asking the questions it would be someone else. As a matter of fact, virtually all the questions you've asked have already been asked by others involved with the process.

We are at the concept stage right now and we're attempting to garner support for the broad concepts. If we can develop the support to justify moving forward in refining the concept into more specific applications that will only come as a result of the participation of many, which of course includes you.

You asked how the five got "chosen" and who we are. I can't answer for the others but I can answer for myself.

The "who" question is easy. I am a nobody and will continue to be a nobody whether this thing works out or not. Who I am or am not has no bearing on how the IVPI will develop, what it will look like if/when it gets there or whether or not you'll be able to make as much money under that system as the current system. I am an appraiser (22 years), I teach USPAP (11 years), and I participate as one of the regulars on this forum (5+ years). I am a commercial appraiser and I don't participate in the Fannie system. I operate a 1-horse (me) fee practice. I'm not a member of any of the professional organizations. I've never employed a trainee and I've never signed a "did inspect" for an appraisal I didn't personally perform from beginning to end. I don't sell anything other than appraisals and I don't work for mortgage brokers. I don't pass our business cards when I teach a class and I don't flirt with my female students.

I'm married (2nd wife, which means there's a 1st wife and a divorce in my distant past); I'm a parent and, more recently, I'm now a grandparent. I'm an avid surfer (see avatar) and when I'm not doing that I'm building surfboards for my family and friends. I have one of those tans that ends at my neck and wrists during the winter. You could say I have very few interests.

I'm a true believer in the appraisal process, an ardent supporter of the appraisal profession, a big fan of the archtypical appraiser and an enthusiastic cheerleader for USPAP - ask anyone around here if you don't believe me.

I might be the dumbest person in the room at any given time, but I won't lie to you and I'm not trying to make a buck off of you or anyone else other than my clients. I don't see a permanent role in the IVPI in my future. I am not prepared to give up my commercial appraisal practice or relocate or wear a suit everyday or deal with "employees".

As for how I got "chosen", it came about as a result of other involvees who have come to know me through my participation on this forum over the years. I am well known here for having the big mouth and not being afraid to shoot it off, often with varying degrees of effectiveness. I got a phone call, I had a discussion with the person on the other end of the line, I was asked for some suggestions - particularly about setting up the review component - and I spent a couple hours writing that up. That material resonated with the people who were already involved and I offered to participate more directly.

So no, I can't say that my involvement is the result of a nationwide selection process that involved an FBI background check or senate hearings, or that I am a published academic or whatever qualification you or anyone else might find meaningful. Whatever attention I have ever drawn has been solely based on the reasoning and rationale I use when I express my opinions. Beyond that, I am an empty suit with no face.

If you really want to know where I'm coming from alls you have to do is start reading my writing and decide for yourself. Just click on my name, hit the "find all posts" button and the forum archives will arrange them all in chronological order. I don't think it makes any difference whether you start at the beginning of the list or the end because I've been pretty consistent all the way through.

I serve the appraisal profession only to the extent that you all will have me. If in your collective wisdom you deem as more appropriate someone who has been blessed by one of the professional orgs or who works in a high-rise office building for a Fortune 100 company then I shall be happy to step aside and return to my home office and continue to bang out incoherent manfestos about appraiser independence and impartiality.

As for making decisions for other appraisers' lives - I don't do that. At last count, about 20 people have had their hands in this already and I fully encourage more participation.

This is an initial proposal and there are other parties besides appraisers who will have their say in all this regardless of what we say. A few elements of our proposal were directly influenced by the content of the HVCC. Our proposal isn't the only possible solution and for all I know maybe it isn't the best possible solution. But there was a first step that had to be taken and, this time, this is what that first step looks like.

Maybe your role in all this is to put together the better alternative. If you can show me the better way then maybe I'll support your work instead of my own.

 

[Zmcraney]

Liaison with State and Regulatory officials

Mike, i hate to break it to you but that would require the state and regulatory officials to WORK, which is a dirty to word to most of them and would require a vast majority of said state and regulatory officials to repeatedly wash their mouth out with Scotch.

 

[Shelley4146]

Thanks George it's nice to see that there's been some local input!

 

[Karl]

& I'm willing to bet IF there is anyone that THINKS they can write & express themselves 1/2 as good as Mr Hatch. I'm sure they'd like your input. Thank You Mr Hatch for doing what your doing.

 

[Mountain Man]

Arrg, I got the emails... but I'm so far behind in work, I'll have to rely on George Hatch and others who have a much larger brain than I to make the case for/against. m2:

 

[PropertyEconomics]

timd354,

If it wasn't you asking the questions it would be someone else. As a matter of fact, virtually all the questions you've asked have already been asked by others involved with the process.

We are at the concept stage right now and we're attempting to garner support for the broad concepts. If we can develop the support to justify moving forward in refining the concept into more specific applications that will only come as a result of the participation of many, which of course includes you.

You asked how the five got "chosen" and who we are. I can't answer for the others but I can answer for myself.

The "who" question is easy. I am a nobody and will continue to be a nobody whether this thing works out or not. Who I am or am not has no bearing on how the IVPI will develop, what it will look like if/when it gets there or whether or not you'll be able to make as much money under that system as the current system. I am an appraiser (22 years), I teach USPAP (11 years), and I participate as one of the regulars on this forum (5+ years). I am a commercial appraiser and I don't participate in the Fannie system. I operate a 1-horse (me) fee practice. I'm not a member of any of the professional organizations. I've never employed a trainee and I've never signed a "did inspect" for an appraisal I didn't personally perform from beginning to end. I don't sell anything other than appraisals and I don't work for mortgage brokers. I don't pass our business cards when I teach a class and I don't flirt with my female students.

I'm married (2nd wife, which means there's a 1st wife and a divorce in my distant past); I'm a parent and, more recently, I'm now a grandparent. I'm an avid surfer (see avatar) and when I'm not doing that I'm building surfboards for my family and friends. I have one of those tans that ends at my neck and wrists during the winter. You could say I have very few interests.

I'm a true believer in the appraisal process, an ardent supporter of the appraisal profession, a big fan of the archtypical appraiser and an enthusiastic cheerleader for USPAP - ask anyone around here if you don't believe me.

I might be the dumbest person in the room at any given time, but I won't lie to you and I'm not trying to make a buck off of you or anyone else other than my clients. I don't see a permanent role in the IVPI in my future. I am not prepared to give up my commercial appraisal practice or relocate or wear a suit everyday or deal with "employees".

As for how I got "chosen", it came about as a result of other involvees who have come to know me through my participation on this forum over the years. I am well known here for having the big mouth and not being afraid to shoot it off, often with varying degrees of effectiveness. I got a phone call, I had a discussion with the person on the other end of the line, I was asked for some suggestions - particularly about setting up the review component - and I spent a couple hours writing that up. That material resonated with the people who were already involved and I offered to participate more directly.

So no, I can't say that my involvement is the result of a nationwide selection process that involved an FBI background check or senate hearings, or that I am a published academic or whatever qualification you or anyone else might find meaningful. Whatever attention I have ever drawn has been solely based on the reasoning and rationale I use when I express my opinions. Beyond that, I am an empty suit with no face.

If you really want to know where I'm coming from alls you have to do is start reading my writing and decide for yourself. Just click on my name, hit the "find all posts" button and the forum archives will arrange them all in chronological order. I don't think it makes any difference whether you start at the beginning of the list or the end because I've been pretty consistent all the way through.

I serve the appraisal profession only to the extent that you all will have me. If in your collective wisdom you deem as more appropriate someone who has been blessed by one of the professional orgs or who works in a high-rise office building for a Fortune 100 company then I shall be happy to step aside and return to my home office and continue to bang out incoherent manfestos about appraiser independence and impartiality.

As for making decisions for other appraisers' lives - I don't do that. At last count, about 20 people have had their hands in this already and I fully encourage more participation.

This is an initial proposal and there are other parties besides appraisers who will have their say in all this regardless of what we say. A few elements of our proposal were directly influenced by the content of the HVCC. Our proposal isn't the only possible solution and for all I know maybe it isn't the best possible solution. But there was a first step that had to be taken and, this time, this is what that first step looks like.

Maybe your role in all this is to put together the better alternative. If you can show me the better way then maybe I'll support your work instead of my own.

Mr Hatch,

There are a few things that you left out of your "resume" that I would like to fill in ...
First .. I believe you to be one of the most ethical appraisers on this forum. There are many of us .. but you sir stand shoulder to shoulder with the best of them.
Second .. Your gift for writing is, in my opinion, only matched by perhaps two others on this forum and if I had to rank I do believe you would be at the top. It is a gift many of us wish we had.
Third ... Having never met you, I have reviewed many of your posts and through those I have come to the understanding that you are as honest as the day is long, as strong as an ox when it comes to presenting the passion you have for this profession, but perhaps more importantly a man that all of us here can trust.

Those things need to be said and understood by all that read your post. I truely hope no one ever questions your integrity because I believe it to be beyond reproach.

Coming from a conservative background myself, I see things in a much different light than most. I dont have the emotional ties to problems that many do. I think the real issue is many of us wake up this morning and find that this "document" had been delivered to Attorney General Cuomo without the input of those that it touches on a day to day basis. My frist reading of the document honestly led me to conclude that another AMC had been formed, although it was not being called an AMC. It in effect manages appraisers, however, with all the bashing that many on this forum have undertaken with respect to AMCs I was certain that calling it so would not be well received. I see this document as a business model which is very strongly built on that of a management company.
Many here today have written well thought out questions and there are a number of things in the document that require comment.
Earlier we were told that hundreds had worked on this document and in your post you say there were approximately 20 that hand their hands in it. Frankly, I believe your post more than some of the others and I do believe this was drafted by a select group of people and I have no issue with that. The issue is, contrary to what many were led to believe, this document was not presented in any manner for open debate and discussion prior to it being delivered to the Attorney General as "our" suggestion. Its not our suggestion. Its the suggestion of a select few that appears to be held out to be "our" suggestions. The few on the panel are ethical, well intended, and tops in our field I do believe. However, the pitfalls have been very well pointed out by timid and the answers to the questions are shocking.
Why would I let anyone set fees for me? Why would I be on a rotation for anyone? I have spent 25 years of my life developing the relationships I have with mortgage banker, banker, lender, FNMA, realtor, some AMCs, and everyone else associated with the lending industry. Everyone of us has spent that time, only now to have to pay for those who have done poor jobs and assisted in getting the real estate market to the position it is in today, broker and appraiser alike.
I believe that reactions like this, and frankly that of Mr Cuomo, are killing flys with bazookas. I dont have the answers, but the emotion of this thing must be removed if there is to be any real meaningful solutions.
I would bust my *** to help, but was never asked. I, like the rest, was told we could register to keep informed. I didnt register because I didnt know what I was registering for. Friends who did register were not contacted, they were sent the document today just as it was posted here.

I applaud the efforts, I want to be included, I dont want to give up the business I have developed to a non profit organization that is not funded, has no experience in the management of appraisers, yet is establishing rules and regulations that I may well have to live by. It seems to me, the best appraisers in the country wont now work for AMCs, and I dont see why they would get on a roatating panel, working for a company or entity that will do much the same thing. Establish our fees ( a huge issue as far as I am concerned and confirmed by Mr Dodd ), tell us when we can work, and then have the power to remove us from rotation pending some act by our state board that may or may never happen and could take a year or longer to resolve.
I am quite sure all of you had these discussions and they were heated. They should have been heated. They should remain heated. Its a good foundation and it can be improved upon. I hope we will all have the chance to help you in doing so. The answers will not come easily and a few egos may be bruised in the process.

I certainly hope yours isnt one of them. I respect you sir and I offer you my thanks for your efforts in this attempt. I stand ready to help in any way I can, however, I dont wish to be put at the back of the line and get fed what is decided I should eat.