July 2008 ASC Q&a- Wink Wink Comp Comp

[Ken B]

Steve:

Please do not take this as an insult directed at you. i truly think your opinion is worth hearing.

steve:

go hide your head in a hole. I care less what you have to say at this point.

Well, at least there is room for further decline in Woody's opinion of Mr. Santora.

 

[George Hatch]

Sandy,

You're not happy with the fact that USPAP doesn't require appraisers to fill out a 1004 form or better for every assignment. You're not happy that USPAP doesn't prohibit appraisers from ever providing value opinions for free under any and all circumstances. You're unhappy that the term "comp check" as used by most (but not all) people can include elements of both of the above, and as such cannot be "banned" in appraisal standards without also infringing on a lot of legitimate appraisal services that appraisers can and do provide to their clients.

We get it.

The fact remains that even if you could get the term banned, the practice itself would continue in one name or another. You could ban a dozen different versions of it and some donkey would come back with a 13th version that was beyond the verbiage you've already banned.

It is the improper contingencies that, when present, creates the problem; not the value opinion itself or the fact that an appraiser might choose to give it away for free or for cheap. That improper contingency is already expressly prohibited in USPAP.

In order to sincerely think that the ASBs Q&A provides any type of boost or advantage to the idiots, a person has to completely ignore the existing prohibitions on improper assignment conditions, including the ASBs explicit reminder about that prohibition in the Q&A itself AND the certifications in every Fannie report. It requires a serious deficit of reading comprehension, one which is way beyond the reach of the ASB in any case.

 

[SANDY]

Sandy,

You're not happy with the fact that USPAP doesn't require appraisers to fill out a 1004 form or better for every assignment. You're not happy that USPAP doesn't prohibit appraisers from ever providing value opinions for free under any and all circumstances. You're unhappy that the term "comp check" as used by most (but not all) people can include elements of both of the above, and as such cannot be "banned" in appraisal standards without also infringing on a lot of legitimate appraisal services that appraisers can and do provide to their clients.

We get it.

The fact remains that even if you could get the term banned, the practice itself would continue in one name or another. You could ban a dozen different versions of it and some donkey would come back with a 13th version that was beyond the verbiage you've already banned.

It is the improper contingencies that, when present, creates the problem; not the value opinion itself or the fact that an appraiser might choose to give it away for free or for cheap. That improper contingency is already expressly prohibited in USPAP.

In order to sincerely think that the ASBs Q&A provides any type of boost or advantage to the idiots, a person has to completely ignore the existing prohibitions on improper assignment conditions, including the ASBs explicit reminder about that prohibition in the Q&A itself AND the certifications in every Fannie report. It requires a serious deficit of reading comprehension, one which is way beyond the reach of the ASB in any case.

Sadly Mr. Hatch you are happy with the status quo! Which is why you cannot be the CZAR!

 

[SANDY]

I have been waiting for this whole broken system to implode upon itself for a long time now and I am quite happy that this period of time presents itself as the best opportunity in a long time for those that have been very busy putting their fingers in the leaks trying to keep the dam from breaking to finally drown. Let it burst and then we can start all over with a new system.
Of course it's going to be a painful process for some---folks that thought they were safe in perches up on the highest branches of the tree, and atop the mountain peaks are feeling the tree shaking and the mountain rumbling beneath them. I think I even hear a chainsaw starting up!!! Time for some to ride off into the sunset pilgrim!!! Come down from your perches and sit amongst those that you have ruled and ask for forgiveness before they turn against you completely.

 

[Hamlet]

I have been waiting for this whole broken system to implode upon itself for a long time now and I am quite happy that this period of time presents itself as the best opportunity in a long time for those that have been very busy putting their fingers in the leaks trying to keep the dam from breaking to finally drown. Let it burst and then we can start all over with a new system.
Of course it's going to be a painful process for some---folks that thought they were safe in perches up on the highest branches of the tree, and atop the mountain peaks are feeling the tree shaking and the mountain rumbling beneath them. I think I even hear a chainsaw starting up!!! Time for some to ride off into the sunset pilgrim!!! Come down from your perches and sit amongst those that you have ruled and ask for forgiveness before they turn against you completely.

..........

 

[Ken B]

..........

You can say that again.

 

[SANDY]

Ya say you want a revolution yeah yeah yeah!!!!! Of course we'll have to untrain all the USPAP instructors and find a home for the elderly appraisers that can't be re-trained and some real jobs for all those regulators.

Have a nice day-going back to the beach.

 

[George Hatch]

Sandy,

You ask if I'm happy with the status quo. I think the answer to that question should be obvious to anyone who has been following my various rantings over the years.

Yeah, I'm unhappy that Congress didn't lock the mortgage brokers out of the appraisal engagement loop for FRTs in FIRREA back in 1989 like they originally tried to do. I'm unhappy with the raising of the deminimus. I'm unhappy with the "evaluations" loophole and how the lenders have been exploiting it. I'm unhappy that the feds really slacked off on their enforecment efforts with the banks and allowed them to break the laws and regulations.

I'm unhappy that many of the state appraisal boards stood by and allowed their serial offenders to do their damage whilst chasing legitimate appraisers with trivia. I'm unhappy that trainees were licensed without adequate scrutiny of their appraisal logs or the reports on those logs.

I'm also unhappy that these mortgage houses were allowed to thrive outside of the federal banking regulation system. I'm unhappy that the AMCs somehow managed to masquerade as something other than appraisal companies, thereby flying under the radar of the state appraisal boards.

I'm unhappy that many of the lenders were so shortsighted as to circumvent their own internal controls and allow corrupt loan originators and corrupt appraisers to submit garbage loan applications for approval without getting cut off. I'm unhappy that the secondary market investors accepted the assurances of unproven ratings models on those loan portfolio bundles they were buying instead of exercising a reasonable degree of due diligence on their own.


But in comparison to all the external elements of our environment with which I am unhappy, none of that compares to the degree of unhappiness I have with my own peers. I am really unhappy with the trend for trainee-based sweatshops; I'm really unhappy with the form monkey mentality that persists among us; I'm really unhappy with the shallow level of understanding that appraisers exhibit when considering appraisal questions of any type. I'm really unhappy with the unethical way that appraisers seek to stack the deck in our favor, as if participating in the win-by-technicality can ever return long term benefits to a profession that's based on the principals of personal responsibility and ethical conduct.

If our own house was more or less in order I suppose I'd be a lot more outraged at the misconduct of the lenders and the government and society at large. Unfortunately, our house has a lot of garbage in it, and I'm not inclined to blame anyone for that garbage other than the people who live in that house. As a group we are not victims, we are co-conspirators and by our own actions deserve to be treated as such.

I'm one of those people who believes in power of the individual and the primacy of individual choice. As far as I'm concerned, USPAP and the assorted rules and regulations to which I adhere work for me, to my personal benefit and to that of the types of clients whom I seek. I've found that as long as I am straight up with people and refrain from turning every disagreement into a personal affront I can always negotiate for the reasonable agreement or concensus.

I have long averred that the appropriate measure of who the winners and losers are in this business is not how much money they make or the cars they drive or the possessions they own when times are good. Any marginal plan and any marginal operator can make money and live large when times are good. I measure the success of the individual by who survives the really tough times. So yeah, there are a lot of idiots, people whom I consider to be the enemy of professional practice, who have been living large. I never envied them, though, because I always knew, from experience, how they would fare in the end.

We are still in a period of transition. Many appraisers will be forced to clean their acts up before this is over, as happened the last time. Others will be forced out completely. Only the strong will survive, and by that I do not mean the people who make the most money. I'm patient. I'm a true believer. I recognize that the principle of change is always in effect in our business, and I try to keep my eye out for ways to take fair advantage of those changes.

All of that contributes to why I don't spend a whole lot of effort seeking external relief for what I perceive to be an internal problem.

My advice: if you don't want to deal with comp checks then stop doing business with mortgage brokers. It's that simple. Find a bank job or a government job or go to work for a shop that has the types of client that you want to work with. Stop worrying about what other appraisers are getting away with or how much more successful than you they may appear to be. You're not running a sprint, you're running a marathon.

It worked for me and it can work for you.

 

[Fred]

2) Standards have consistently been changed to reflect what the lenders want.

Can you come up with an example or two?

Steven,
Instructors course for everyone? There's no way. The last I heard, the pass rate for the people who had already been teaching it was only ~50%. You're talking about whittling the entire appraisal profession down by at least that much. Half the people on this thread wouldn't make that cut, and they're all more savvy than many of the appraisers who come through my courses.

George,
You ever hear the one that goes - what do you call 50,000 lawyers at the bottom of the ocean?

Well George, I am entitled to my opinion. I think "Concepts and Principles of USPAP" is fairly superficial treatment of the issue of appraisal standards.

Ya say you want a revolution yeah yeah yeah!!!!! Of course we'll have to untrain all the USPAP instructors and find a home for the elderly appraisers that can't be re-trained and some real jobs for all those regulators.

Have a nice day-going back to the beach.

Don't eat any of the brown sand.

 

[Jo Ann Meyer Stratton]

I have been reading this thread, shaking my head at times and at times clapping. I just want to add a BRAVO to George Hatch for his post #458! That expressed my sentiments exactly!