Independent Appraisers GSE/Cuomo Proposal 3/19/08

[IVgroup]

capitalism

First, of course reform is needed but let's not throw the baby out with the bath water. Having a roster where everyone gets a turn cannot be the answer. The industry must find ways to improve and protect the public interest but what good will that be when hard working honorable capitalists are as equally poor as their unmotivated unethical appraiser counterparts. Years of cultivating good clients and building a reputation must not be a side note in this discussion. Many appraisers have for years built a book of business based on good, ethical, reliable and paying customers from hard work and smart business planning. We have raised our families and put food on the table with the opportunities that this industry, capitalism and our country have rewarded with our hard work. Reform MUST not come if the price is to compromise all that we have built as individuals. I only speak for myself when I say that I will not sacrifice the rights of one to earn a free market living for the opportunities of many to share in being given one.

 

[Lawrence R.]

Was the outline delivered to Cuomo with details still being ironed out?

I really have to say I appreciate your concern, and it seems like few are actually answering your questions.

But, as to this one, the answer is pretty obvious. This whole thing is developing on the fly. This proposal was designed to get some people to stop in their tracks, and ward off some other factions at work.

There is a new pie being baked, and many are scrambling to get the biggest piece there is.

As to a huge bureaucracy, it is coming whether we like it or not. The idea that getting in early can help us exert some influence on the process was what facilitated the speedy aspect of delivering the "product".

I think every appraiser that wasn't personally asked to comment probably thinks this thing wasn't very well vetted.

But again, speed was a necessity. The law of first mention is in play here, and it is important to "get in the heads" of the powers that be ahead of the crowd that will be clamoring to exert influence on this process.

I would much rather have 85% of a great idea heard on day one, rather than 100% of a good idea heard after 300 AMC campaign contributors had thier say.

I very seriously doubt that what these guys has come up with will end up coming to life exactly as it has been presented. The concerns that have been expressed here I am sure will be brought up elsewhere too.

I think you have some legitimate concerns, and I am SURE that all the gaps will be filled in in the months to come.

Hell, who knows, the powers that be may have already made up thier minds, and all this is just a dog and pony show.

Either way, this group of appraisers would be remiss if they didn't try to take advantage of what they perceive as an opportunity to effect positive change.


My hat is off to them.

 

[PropertyEconomics]

I really have to say I appreciate your concern, and it seems like few are actually answering your questions.

But, as to this one, the answer is pretty obvious. This whole thing is developing on the fly. This proposal was designed to get some people to stop in their tracks, and ward off some other factions at work.

There is a new pie being baked, and many are scrambling to get the biggest piece there is.

As to a huge bureaucracy, it is coming whether we like it or not. The idea that getting in early can help us exert some influence on the process was what facilitated the speedy aspect of delivering the "product".

I think every appraiser that wasn't personally asked to comment probably thinks this thing wasn't very well vetted.

But again, speed was a necessity. The law of first mention is in play here, and it is important to "get in the heads" of the powers that be ahead of the crowd that will be clamoring to exert influence on this process.

I would much rather have 85% of a great idea heard on day one, rather than 100% of a good idea heard after 300 AMC campaign contributors had thier say.

I very seriously doubt that what these guys has come up with will end up coming to life exactly as it has been presented. The concerns that have been expressed here I am sure will be brought up elsewhere too.

I think you have some legitimate concerns, and I am SURE that all the gaps will be filled in in the months to come.

Hell, who knows, the powers that be may have already made up thier minds, and all this is just a dog and pony show.

Either way, this group of appraisers would be remiss if they didn't try to take advantage of what they perceive as an opportunity to effect positive change.


My hat is off to them.

Ive had many questions that were not answered. Its why I kept asking them, and then when the answers still didnt come .. I posted my response to George Hatch. I personally believe with 50 days remaining in the response period there was additional time, but thats just my opinion. Its not the first opinion that the powers that be will grasp onto .. it will be the BEST opinion that will garner attention. Its like doing an appraisal, if I cant put out my best work today, I wait until tomorrow when it is the best. I only have one real chance to impress my client ... they dont want revisions and I dont want to do them.
I applaud the efforts, Im just sad to see that more were not involved and that the questions here that have been posted that require addressing, were not in the document as it got to the Attorney General.

 

[Hamlet]

I too greatly respect Mr. Hatch and Pam and others on the panel and trust implicitly in their integrity.

I am glad that PE and timd and others are raising questions, this is a great thing and we need to iron out all these issues before our hour is gone.

I do think caution that there could be a tone set here that all appraisers are bad and need even more regulation, when in fact it is the lenders who created this mess and not the appraisers. More accountability needs to be placed on the lender side.

 

[timd354]

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.

I would first like to say that I appreciate all of your efforts and I think that your hearts are in the right place, but I just disagree with your solution for the reasons I have stated in my earlier posts. It would be unfair of me to criticize your proposed solution without offering my own solution, so I have attached an outline of a possible proposed solution. I hope everyone reads it and reponds with criticisms, better ideas, etc. My solution will make no sense to anyone who is not already familiar with the existing proposed Fannie/Freddie Home Valuation Code of Conduct, so my proposal needs to be read together with that proposal. Additionally, I put this proposal together very quickly this evening, so it is likely to be in need of much improvement, modifications, etc. It is just a start, but I think it does address the main issues of appraiser independence without turning are whole industry into a giant non-profit AMC or collective farm that would essentially dictate the income and amount of business allowed to be done by a majority of residential appraisers.

I look forward to everyone's input and hope that my proposal can play a small part in devising a workable solution that does not punish all appraisers for the sins of the skippies and the lenders who did not care about appraisal quality.

 

[Hamlet]

timd,

I am printing it and will read it tomorrow...it is late or I'd read it otherwise.

I must say I love the title...very catchy!

 

[Tim The Enchanter]

I've not met George in person, just know him by rep through this board, and a quote or 2 in the paper.
Never met Pam or Joyce Potts either, but I saw them on TV the other night. I'd vote with you all, even without reading most of the last 11 pages.

The main thing bothered me much with this settlement thing was the staff appraisers can't do appraisals that will go to Fannie or Freddie. But not the end of the world. Brokers not being able to have input is a good plan. I guess we'll see what happens.

Nice quote George. I can tell you're a straight up kinda guy, and past the nobody stage. Catch a wave, man! I'll be found on the twisty back roads. Kindly pull right for a half second and let me by.

Originally Posted by George Hatch
***
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.

 

[sbb04]

OK then

What is your solution? You can't assume that enforcement will ever improve. Did it improve after the S&L bailout. The typical bureaucrat answer to everything is to slam the barn door shut after the horses have left. Then go look for new horses.
In principle I agree with you but there really is no practical way of achieving that goal that I can see given the circumstances. You speak of a free market but is it really a free market when investment bankers can make billions of dollars in bad loans and then when they get caught the Fed is there to bail them out? To me the real solution would be to let them fail and maybe next time they'd be more careful. That ain't going to happen.

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?

 

[Bob Walsh]

As someone who has been previewing this forum for the past several months, I guess this is the issue that has finally caused me to respond.

I have been in this business for the past 24 years and I (like others) have spent a "business" lifetime striving to work with clients of my choice. While I also receive plenty of calls from "entities" which I have no desire to work for, this "business" lifetime has been spent establishing relationships with clients whose top priorities are quality of the report and professional representation to their customers. I currently have six appraisers that work for me who also share my philosophy. Most of these appraisers have been with me for close to 15 years and enjoy the flexability of not being a business owner. I have always been appreciative of their commitment to me and this profession.

When reading this forum the past few months, I was intrigued by the discussion that a proposal was being generated that would be sent to the NY AG. I, like many of this forum, once performed appraisals for some National Lenders that had separate Appraiser Review Divisions. Being able to discuss everyday appraisal issues with "my peers" not only allowed me to "just do my job" but it seemed to make business sense as I recall these companies were then reporting quarterly profits and not the billions in quarterly losses of today.

I guess I was misguided in my thinking of what the proposal would entail. There are many good lenders out there that make a concerted effort to keep processing/underwriting completely separate from the production side. They are not the problem that caused the climate of today. I thought the intent of the IVPI would be to provide an alternative to Lenders and not a "mandate" for all loans that go to GSE's. As others have indicated, there are too many unanswered questions (rotation list, fee structure, inexperience- to name a few) to show support for this option.

BW

 

[JENIFFERW]

I haven't had time to read all of the posts, so maybe this has been said but, I have two suggestions-

1. A rating system for the panel appraisers. Maybe based on being on-time within a reasonable due date expectation, review ratings, lack of complaints regarding service issues, seniority, etc.

2. Let the panel appraisers sign up for whatever zip code they feel geographically competent in, until proven otherwise. It won't take long with 10% reviews to find out if they are actually competent or not.