Lying Appraisers

[residentialguy]

Does it bother you when the appraiser that does a review on your report has a lower license and less experience than you?

No one is lower than Terrel...but I'm working on it :new_all_coholic:

 

[residentialguy]

oops...you were talking license level. My bad :icon_mrgreen:

 

[Delta85]

How can we bash appraisers when the big shots like Chris Dodd and Barney Frank did not even mention any problems as late as 2008? I watched Chris Dodd on stage during the Presidential debates and I heard not one word about any upcoming collapse. No warning, no discussion. Essentially these big shots were checking the stable box but on a much larger scale.

 

[Meandering]

How can we bash appraisers when the big shots like Chris Dodd and Barney Frank did not even mention any problems as late as 2008? I watched Chris Dodd on stage during the Presidential debates and I heard not one word about any upcoming collapse. No warning, no discussion. Essentially these big shots were checking the stable box but on a much larger scale.

You did not want them to be party poopers did you?

Post-gazette.com) (December 23, 2007) The residential foreclosure crisis has swept the nation and dominated theheadlines in 2007 has ultimately caused what is known as a credit crunch. Lenders stop lending and start hoarding
cash because they are afraid of rising bankruptcies and mortgage defaults. It leads them to charge higher interest rates or reject all but the safest loans Homebuyers with risky credit ratings were able to get mortgages with
adjustable interest rates offering low monthly payments to start with. But as rates crept higher, borrowers began to default at an alarming pace. Inflated home prices fell dramatically and lenders were forced to foreclose on
mortgages that exceeded the value of the property. These mortgages are at the heart of the credit crunch that has shaken financial institutions, rattled builders and burned investors who bought mortgage backed bonds on the
secondary market. Many people who previously would have been able to borrow from banks months ago find themselves in a situation where they are being turned down. Some of those people are turning to social lending
networks like Lending Club. Lending Club loan volume has been increasing 100 percent each month since the company opened in May (2007). This month, about $4 million in loans were made through the Web site. The three-year unsecured loans are $5,000 to $7,000 at interest rates of between 10 percent and 12 percent. "As the secondary market dried up, banks realized they would have to hold these loans themselves and they've slowed
down the process of writing loans," said Peter Anastasian, managing director of CJM Fiscal Management in Melville,

N.Y. "A lot of people can no longer get loans with no income verification or no money down," Mr. Anastasian said. "It all comes down to exposure for these banks. When they don't have exposure they don't care. But when they do they look with a fine tooth comb at individuals and their ability to repay."

http://www.post-gazette.com/stories...h-how-did-it-happen-and-where-do-we-go-from-h
ere-516238/

(Wikipedia) The Mortgage Debt Relief Act of 2007, was in congress. Advertised as being able to dramatically change the lives of homeowners across the country that were facing foreclosure, or considering a short sale,
negotiating a loan workout, or have done any of these since January 1, 2007. While this bill has been long awaited by homeowners who would be penalized by the potential phantom tax, and real estate agents praying that it would open the flood gates to more business via short sale listings, the goal of the Administration and legislators was to reduce the number of foreclosures and the need for short sales by allowing homeowners to renegotiate their loans without tax consequences.

(Consumer Mortgage Reports) January 2, 2008 National City will reduce its quarterly dividend by 49 percent and cut 900 more jobs as it stops making home loans through their wholesale division. The lender has cut its staffing by 3,400 positions in the past year, including the reductions announced today, as the credit crunch worsens. National City will continue making home loans through its own staff, the bank said. The housing market “requires aggressive steps to overcome the near-term challenges”, Chief Executive Peter Raskind said in a statement today. “It is clear
that origination volumes will be lower going forward”, it appears that the type of mortgages offered by National City are no longer desired on the secondary market. Mortgage companies who offer Home Equity Lines of Credit or
‘second mortgages’ find themselves in a particularly awkward position in today’s market. Millions of homeowners that have a Home Equity Line of Credit have little or no equity left on their home, many are in depreciating markets and even more have taken out the stated income or as they are also known as, ‘liar loans’. What makes this awkward for lenders is the fact that in the event of a foreclosure, which could be in the range of 2 million in 2008, the primary mortgage holder is financially compensated first and “IF” there is any remaining money available it goes to the second mortgage holder. Often times the second mortgage holder receives little or no compensation.

(CNN Money) Jan 11, 2008, Bank of America came to the rescue of embattled mortgage lender Countrywide Financial Corp. Friday, announcing it would buy the company for $4 billion in an all-stock deal.
http://money.cnn.com/2008/01/11/news/companies/boa_countrywide/index.htm

(Fed Bank of St. Louis) February 13, 2008 President Bush signs the Economic Stimulus Act of 2008 Public Law 110-185 into law.

(GovSpot) On Monday, March 10, (2008) Wall Street was tense, as it had been for months. The mortgage market had crashed; major companies like Citigroup and Merrill Lynch had written off billions of dollars in bad loans. In what the economists called a “credit crisis,” the big banks were so spooked they had all but stopped lending money, a trend which, if it continued, would spell disaster on 21st-century Wall Street, where trading firms routinely borrow as much as 50 times the cash in their accounts to trade complex financial instruments such as derivatives.

(CNN Money) March 16, 2008 - JPMorgan Chase & Co. acquires troubled Wall Street firm Bear Stearns, in a deal engineered by the Federal Reserve, which agrees to provide up to $29 billion in financing to cover potential Bear Stearns losses that JPMorgan agrees to assume.

(Truth about Mortgage) 3/17/2008 Citigroup announced this afternoon that it will cut 185 jobs in its residential unit CitiMortgage as it pulls out of the wholesale market for second mortgages amid deteriorating credit conditions. The layoffs are part of to reduce its exposure to the residential mortgage market, which it outlined two weeks ago. In that release, Citi said it planned to increase agency-backed lending to 90 percent of production by the third quarter, up from 65 percent in 2007, and said its CitiMortgage division had already reduced third party second-lien lending by more than 90 percent from a year ago.

(Mortgage Lender) 5/12/2008 In a conference call to its Home Equity and Subprime Wholesale divisions today, Chase announced the discontinuation of all products for those divisions and told employees it was shutting down both channels. "Third party origination of Home Equity and Subprime is totally done - elimination of channel and product, so no product migration to Prime Wholesale," a source told us.

(CNN Money) July 11, 2008 - The FDIC takes over IndyMac, a California bank that had been one of the leading lenders who made home loans to people who did not provide proof of their income. The failure may turn out to be the most expensive in U.S. history, but FDIC warns that more bank failures lay ahead.

(MortgageLoan.com) July 25, 2008 Wachovia on Monday confirmed it was pulling out of the wholesale mortgage lending business as of Friday, July 25th. Wachovia, which is the fourth largest bank in the U.S, reported that the move would result in a reduction in its workforce, although the number is presently unknown. Wachovia has suffered huge losses following its 2006 acquisition of Golden West Financial Corp. and is looking for ways to reduce its exposure to the mortgage market.

(HUD.gov) The Housing and Economic Recovery Act of 2008, signed into law on July 30, 2008. The safe act, designed to assist with the recovery and the revitalization of America's residential housing market, to enhance
consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators and for the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) to establish and maintain a nationwide mortgage licensing system and registry for the residential mortgage industry

Aug. 8, 2008 (Bloomberg) -- As U.S. regulators brace for more bank failures, consumers are wondering for the first time since the savings-and- loan crisis of the 1980s about the safety of their money.

Sept. 6, 2008 - Treasury Secretary Henry Paulson announces a takeover of Fannie Mae (, ) and Freddie Mac (, ), putting the government in charge of the twin mortgage giants that own or back more than $5 trillion in mortgages. The Treasury Department agrees to provide up to $200 billion in loans to the cash-starved firms that are crucial sources of mortgage funding for banks and other home lenders.

(Bankrate.com) On Sept. 8, 2008, the U.S. Treasury seized control of mortgage giants Fannie Mae and Freddie Mac and pledged a $200 billion cash injection to help the companies cope with mortgage default losses. About a week later the government bailed out American International Group Inc., or AIG, with $85 billion. The Fed refused to save Lehman Brothers and the company was forced to file for bankruptcy. Some of the largest financial institutions were on the verge of collapse as the mortgage market melted down. As the crisis hit the global market, the credit freeze spread. The Treasury and the Federal Reserve began working on a $700 billion bailout plan.

(CNN Money) Sept. 15, 2008 - Bank of America (, ) agrees to acquire Merrill Lynch, in a deal joining one of the nation's largest banks with one of the its largest brokerage firms, for up to $50 billion. Deal comes after talks to have Bank of America buy Lehman Brothers, another money-losing Wall Street firm, fall through. Unable to find a buyer, Lehman Brothers files for bankruptcy court protection.

(Fed Bank of St. Louis) Sept. 15, 2008 Lehman Brothers Holdings Incorporated files for bankruptcy court protection.

(Bloomberg) Sept. 26, 2008 -- Lehman Brothers Holdings Incorporated was seized by government regulators and its branches and assets sold to in the biggest U.S. bank failure in history.

September 29, 2008 NEW YORK (CNNMoney.com) -- The fate of the government's $700 billion financial bailout plan was thrown into doubt Monday as the House rejected the controversial measure. The abrupt defeat left the
Bush administration and congressional leaders scrambling to figure out whether to renegotiate the bill and introduce it again as soon as Thursday or to try other options. Stock markets reacted violently. Investors who had been
counting on the rescue plan's passage sent the Dow Jones industrial average down well over 700 points. The stock gauge closed 778 points lower - nearly 7%. , which is designed to get battered lending markets working normally
again, needed 218 votes for passage. But it came up 13 votes short of that target, with a final vote of 228 to 205 against. Two-thirds of Democrats and one-third of Republicans voted for the measure. "If I didn't think we were on
the brink of an economic disaster, it would be the easiest thing to say no to this," Boehner said. But he said lawmakers needed to do what was in the best interest of the country. That follows three weeks of other shocks: the
Treasury Department's seizure of mortgage finance firms Fannie Mae (, ) and Freddie Mac (, ); Wall Street firm Lehman Brothers' bankruptcy filing; rival Merrill Lynch (, ) purchase by Bank of America (, ). In addition, the Fed
bailed out insurance giant American International Group (, ), loaning it $85 billion in return for a nearly 80% stake. Washington Mutual (, ), the nation's largest savings and loan, became the largest bank failure in history. After
months of attempts by regulators to fix the problems, the bailout was seen by many as the most comprehensive effort yet. Proponents vowed late Monday to keep trying.

(Safehaven.com) September 29, 2008 STOCK MARKET CRASH." The Industrials crashed 3,260 points, or 29th percent since September 29 fundamental economic conditions were deteriorating rapidly, Patterns in major indices suggested we were headed for a major stock market crash, as they had minimum downside targets that were 25 percent below price levels in early September, and that momentum indicators were suggesting prices would violate the necklines of those patterns around the end of September.

(Fed Bank of St. Louis) October 14, 2008 U.S. Treasury Department announces the that will purchase in financial institutions under the authority of the Emergency Economic Stabilization Act of 2008. The U.S. Treasury will make available $250 billion of capital to U.S. financial institutions. This facility will allow banking organizations to apply for a
investment by the U.S. Treasury. Nine large financial organizations announce their intention to subscribe to the facility in an aggregate amount of $125 billion.


Market conditions were average and appraisers kept their clients.



.

 

[Delta85]

You did not want them to be party poopers did you?

Post-gazette.com) (December 23, 2007) The residential foreclosure crisis has swept the nation and dominated theheadlines in 2007 has ultimately caused what is known as a credit crunch. Lenders stop lending and start hoarding
cash because they are afraid of rising bankruptcies and mortgage defaults. It leads them to charge higher interest rates or reject all but the safest loans Homebuyers with risky credit ratings were able to get mortgages with
adjustable interest rates offering low monthly payments to start with. But as rates crept higher, borrowers began to default at an alarming pace. Inflated home prices fell dramatically and lenders were forced to foreclose on
mortgages that exceeded the value of the property. These mortgages are at the heart of the credit crunch that has shaken financial institutions, rattled builders and burned investors who bought mortgage backed bonds on the
secondary market. Many people who previously would have been able to borrow from banks months ago find themselves in a situation where they are being turned down. Some of those people are turning to social lending
networks like Lending Club. Lending Club loan volume has been increasing 100 percent each month since the company opened in May (2007). This month, about $4 million in loans were made through the Web site. The three-year unsecured loans are $5,000 to $7,000 at interest rates of between 10 percent and 12 percent. "As the secondary market dried up, banks realized they would have to hold these loans themselves and they've slowed
down the process of writing loans," said Peter Anastasian, managing director of CJM Fiscal Management in Melville,

N.Y. "A lot of people can no longer get loans with no income verification or no money down," Mr. Anastasian said. "It all comes down to exposure for these banks. When they don't have exposure they don't care. But when they do they look with a fine tooth comb at individuals and their ability to repay."

[url]http://www.post-gazette.com/stories/business/news/the-credit-crunch-how-did-it-happen-and-where-do-we-go-from-h[/URL]
ere-516238/

(Wikipedia) The Mortgage Debt Relief Act of 2007, was in congress. Advertised as being able to dramatically change the lives of homeowners across the country that were facing foreclosure, or considering a short sale,
negotiating a loan workout, or have done any of these since January 1, 2007. While this bill has been long awaited by homeowners who would be penalized by the potential phantom tax, and real estate agents praying that it would open the flood gates to more business via short sale listings, the goal of the Administration and legislators was to reduce the number of foreclosures and the need for short sales by allowing homeowners to renegotiate their loans without tax consequences.

(Consumer Mortgage Reports) January 2, 2008 National City will reduce its quarterly dividend by 49 percent and cut 900 more jobs as it stops making home loans through their wholesale division. The lender has cut its staffing by 3,400 positions in the past year, including the reductions announced today, as the credit crunch worsens. National City will continue making home loans through its own staff, the bank said. The housing market “requires aggressive steps to overcome the near-term challenges”, Chief Executive Peter Raskind said in a statement today. “It is clear
that origination volumes will be lower going forward”, it appears that the type of mortgages offered by National City are no longer desired on the secondary market. Mortgage companies who offer Home Equity Lines of Credit or
‘second mortgages’ find themselves in a particularly awkward position in today’s market. Millions of homeowners that have a Home Equity Line of Credit have little or no equity left on their home, many are in depreciating markets and even more have taken out the stated income or as they are also known as, ‘liar loans’. What makes this awkward for lenders is the fact that in the event of a foreclosure, which could be in the range of 2 million in 2008, the primary mortgage holder is financially compensated first and “IF” there is any remaining money available it goes to the second mortgage holder. Often times the second mortgage holder receives little or no compensation.

(CNN Money) Jan 11, 2008, Bank of America came to the rescue of embattled mortgage lender Countrywide Financial Corp. Friday, announcing it would buy the company for $4 billion in an all-stock deal.
[url]http://money.cnn.com/2008/01/11/news/companies/boa_countrywide/index.htm[/URL]

(Fed Bank of St. Louis) February 13, 2008 President Bush signs the Economic Stimulus Act of 2008 Public Law 110-185 into law.

(GovSpot) On Monday, March 10, (2008) Wall Street was tense, as it had been for months. The mortgage market had crashed; major companies like Citigroup and Merrill Lynch had written off billions of dollars in bad loans. In what the economists called a “credit crisis,” the big banks were so spooked they had all but stopped lending money, a trend which, if it continued, would spell disaster on 21st-century Wall Street, where trading firms routinely borrow as much as 50 times the cash in their accounts to trade complex financial instruments such as derivatives.

(CNN Money) March 16, 2008 - JPMorgan Chase & Co. acquires troubled Wall Street firm Bear Stearns, in a deal engineered by the Federal Reserve, which agrees to provide up to $29 billion in financing to cover potential Bear Stearns losses that JPMorgan agrees to assume.

(Truth about Mortgage) 3/17/2008 Citigroup announced this afternoon that it will cut 185 jobs in its residential unit CitiMortgage as it pulls out of the wholesale market for second mortgages amid deteriorating credit conditions. The layoffs are part of to reduce its exposure to the residential mortgage market, which it outlined two weeks ago. In that release, Citi said it planned to increase agency-backed lending to 90 percent of production by the third quarter, up from 65 percent in 2007, and said its CitiMortgage division had already reduced third party second-lien lending by more than 90 percent from a year ago.

(Mortgage Lender) 5/12/2008 In a conference call to its Home Equity and Subprime Wholesale divisions today, Chase announced the discontinuation of all products for those divisions and told employees it was shutting down both channels. "Third party origination of Home Equity and Subprime is totally done - elimination of channel and product, so no product migration to Prime Wholesale," a source told us.

(CNN Money) July 11, 2008 - The FDIC takes over IndyMac, a California bank that had been one of the leading lenders who made home loans to people who did not provide proof of their income. The failure may turn out to be the most expensive in U.S. history, but FDIC warns that more bank failures lay ahead.

(MortgageLoan.com) July 25, 2008 Wachovia on Monday confirmed it was pulling out of the wholesale mortgage lending business as of Friday, July 25th. Wachovia, which is the fourth largest bank in the U.S, reported that the move would result in a reduction in its workforce, although the number is presently unknown. Wachovia has suffered huge losses following its 2006 acquisition of Golden West Financial Corp. and is looking for ways to reduce its exposure to the mortgage market.

(HUD.gov) The Housing and Economic Recovery Act of 2008, signed into law on July 30, 2008. The safe act, designed to assist with the recovery and the revitalization of America's residential housing market, to enhance
consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators and for the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) to establish and maintain a nationwide mortgage licensing system and registry for the residential mortgage industry

Aug. 8, 2008 (Bloomberg) -- As U.S. regulators brace for more bank failures, consumers are wondering for the first time since the savings-and- loan crisis of the 1980s about the safety of their money.

Sept. 6, 2008 - Treasury Secretary Henry Paulson announces a takeover of Fannie Mae (, ) and Freddie Mac (, ), putting the government in charge of the twin mortgage giants that own or back more than $5 trillion in mortgages. The Treasury Department agrees to provide up to $200 billion in loans to the cash-starved firms that are crucial sources of mortgage funding for banks and other home lenders.

(Bankrate.com) On Sept. 8, 2008, the U.S. Treasury seized control of mortgage giants Fannie Mae and Freddie Mac and pledged a $200 billion cash injection to help the companies cope with mortgage default losses. About a week later the government bailed out American International Group Inc., or AIG, with $85 billion. The Fed refused to save Lehman Brothers and the company was forced to file for bankruptcy. Some of the largest financial institutions were on the verge of collapse as the mortgage market melted down. As the crisis hit the global market, the credit freeze spread. The Treasury and the Federal Reserve began working on a $700 billion bailout plan.

(CNN Money) Sept. 15, 2008 - Bank of America (, ) agrees to acquire Merrill Lynch, in a deal joining one of the nation's largest banks with one of the its largest brokerage firms, for up to $50 billion. Deal comes after talks to have Bank of America buy Lehman Brothers, another money-losing Wall Street firm, fall through. Unable to find a buyer, Lehman Brothers files for bankruptcy court protection.

(Fed Bank of St. Louis) Sept. 15, 2008 Lehman Brothers Holdings Incorporated files for bankruptcy court protection.

(Bloomberg) Sept. 26, 2008 -- Lehman Brothers Holdings Incorporated was seized by government regulators and its branches and assets sold to in the biggest U.S. bank failure in history.

September 29, 2008 NEW YORK (CNNMoney.com) -- The fate of the government's $700 billion financial bailout plan was thrown into doubt Monday as the House rejected the controversial measure. The abrupt defeat left the
Bush administration and congressional leaders scrambling to figure out whether to renegotiate the bill and introduce it again as soon as Thursday or to try other options. Stock markets reacted violently. Investors who had been
counting on the rescue plan's passage sent the Dow Jones industrial average down well over 700 points. The stock gauge closed 778 points lower - nearly 7%. , which is designed to get battered lending markets working normally
again, needed 218 votes for passage. But it came up 13 votes short of that target, with a final vote of 228 to 205 against. Two-thirds of Democrats and one-third of Republicans voted for the measure. "If I didn't think we were on
the brink of an economic disaster, it would be the easiest thing to say no to this," Boehner said. But he said lawmakers needed to do what was in the best interest of the country. That follows three weeks of other shocks: the
Treasury Department's seizure of mortgage finance firms Fannie Mae (, ) and Freddie Mac (, ); Wall Street firm Lehman Brothers' bankruptcy filing; rival Merrill Lynch (, ) purchase by Bank of America (, ). In addition, the Fed
bailed out insurance giant American International Group (, ), loaning it $85 billion in return for a nearly 80% stake. Washington Mutual (, ), the nation's largest savings and loan, became the largest bank failure in history. After
months of attempts by regulators to fix the problems, the bailout was seen by many as the most comprehensive effort yet. Proponents vowed late Monday to keep trying.

(Safehaven.com) September 29, 2008 STOCK MARKET CRASH." The Industrials crashed 3,260 points, or 29th percent since September 29 fundamental economic conditions were deteriorating rapidly, Patterns in major indices suggested we were headed for a major stock market crash, as they had minimum downside targets that were 25 percent below price levels in early September, and that momentum indicators were suggesting prices would violate the necklines of those patterns around the end of September.

(Fed Bank of St. Louis) October 14, 2008 U.S. Treasury Department announces the that will purchase in financial institutions under the authority of the Emergency Economic Stabilization Act of 2008. The U.S. Treasury will make available $250 billion of capital to U.S. financial institutions. This facility will allow banking organizations to apply for a
investment by the U.S. Treasury. Nine large financial organizations announce their intention to subscribe to the facility in an aggregate amount of $125 billion.


Market conditions were average and appraisers kept their clients.



.

It would have been great if Chris Dodd would have talked about some of this while he had the nations attention debating Hillary and Obama during the primaries in 2007/2008. Or Barney Frank in any way, shape, or form.

 

[lls4910]

I have completed a number of these reviews, and it's challenging to leave out the hindsight when reviewing appraisals that are 5-7 years old. It's too easy to see today what happened yesterday.

An appraisal looks back, not forward. I have accumulated a lot of data regarding the time lines for market conditions, especially for 2007. And in my market, it's a very tough call. There are a lot of grey areas. We report on the market, and there is a lag between news articles and market reaction. Does the typical buyer pay as close attention to the nuisances, that we as insiders do? Not really, I have looked back on MLS comments during early 2007. If you do an analysis today, you can see prices were no longer increasing and just beginning to fall off. But, MLS was still indicating bidding wars, short marketing times, "buy now, before prices go up", etc. So, to look back today (with our hindsight) is not a true picture of what we saw then.

 

[ramrcdk]

Hindsight is a beautiful thing but in 2006 and 2007 I doubt ANY appraiser had any idea about how bad it was really going to get ... The market was not, but it wasn't falling off a cliff like it did in 2008 - 2010....Yeah, we can sit here today and look back and say how "stupid" appraisers were but the truth is virtually everyone was calling the market "steady" or "increasing" until it was obvious in 2008 not 2006-2007
I cannot buy your premise that appraisers KNEW the market was about to fall off a cliff.

And that's THE truth! Thanks for saying Terrel L.

 

[Meandering]

We have the same thing here. Most of our sale prices continued to increase through November 2008 or had leveled in the spring of 2008. But when you correlate the headline news with what actually was happening in the market, it just becomes obvious that:

Mortgage money was still available. Subprime mortgages were still available. And that buyers did not read or look at the news, or they did not care about the news. And I think that the level of sensitivity to the news was the reason so many appraisers and now reviewers had an issue. Even though the headlines were there, people just kept on buying and building. Right through into 2009 I saw people shocked when their new construction loans were pulled, and they did not want to believe that headline news could impact their ability to build their dream home. And this becomes a big issue. If the market participants do not give a hoot about the national news, you can't then back it up and blame an appraiser who is measuring the market reaction.

More and more we have evidence that a large portion of our society takes in very little, or no national news. Major newspapers are closing down, they go on line, because their readership is so low, it's not profitable for them to stay open. I know many people (not appraisers) who never, or hardly ever, see or read any news. Even TV news and now a lot of online news is focused on celebrates or which youtube video is cute or has the most plays. I don't see this as a conspiracy, but rather that the "news" organizations are trying to give people what they want and understand. In my mind there is too large a segment of our population that want to watch the cute cat video or the funny baby video or find out what Oprah said instead of watching or reading about Congressional hearing or Wall Street market reports. As a society it should disgust us that so many people have no clue what the e-trade baby is talking about, while the rest of us think it's cute.

And, as far as appraisers are concerned, from where and of what, do you start or use to verify the original appraiser's opinion of the market? Did they only look at sales in the neighborhood? Township? County? State? Nation? Did they only look at sales of 1200-1800 square foot ranch homes in any of those possible locational divisions? Did they look at resale prices of a few homes going back over many years and calculate impacts of inflation on the resale prices? Did they consider that since 1960 prices have increased or did they only consider prices in the last 90 days. Could you pull any subset of data from any one of those categories at the time and make an opposite statement from whatever an appraiser said back then? Here you could. But no one had defined from what parameters appraisers were supposed report the market condition, and many still, to this day, believe market condition is defined by a movement of median or average prices, even though the GSE form requires appraisers to address marketing time and supply and demand, many appraisers continue to function as if supply/demand and marketing time are not factors of the condition of the market, only price is, and we see it with single linear charts that are offered up as their "proof" of a direction of the market.

So in my mind, while I may reach a different conclusion than some other appraiser did in a different period of time, I never call them wrong. I only state this is what I think, and I provide all the analysis and reasoning for my decision. If a client wants to call the original appraiser wrong, they can request that the original appraiser provide support for their opinion of the market condition, but its a moot point. Even if the original appraiser's support is a linear graph of price trends of only a product type in a sub-market or micro market area. It is support that helped them form their opinion and is not wrong, but rather, is a difference of opinion, which, at the time, had no guidelines or parameters for the data that was mandated to be considered when they formed their opinion.


So while a reviewer can disagree with my opinion of market conditions in any time period. They had better not call my opinion "wrong" without being able to address the parameters that I was required to follow in forming my opinion in the first place.



.

 

[smackodu]

I have completed a number of these reviews, and it's challenging to leave out the hindsight when reviewing appraisals that are 5-7 years old. It's too easy to see today what happened yesterday.

An appraisal looks back, not forward. I have accumulated a lot of data regarding the time lines for market conditions, especially for 2007. And in my market, it's a very tough call. There are a lot of grey areas. We report on the market, and there is a lag between news articles and market reaction. Does the typical buyer pay as close attention to the nuisances, that we as insiders do? Not really, I have looked back on MLS comments during early 2007. If you do an analysis today, you can see prices were no longer increasing and just beginning to fall off. But, MLS was still indicating bidding wars, short marketing times, "buy now, before prices go up", etc. So, to look back today (with our hindsight) is not a true picture of what we saw then.

You are carrying the water for Fannie & Freddie. If you have to research the internet to find out what real estate newspaper writers were saying 5 to 7 years ago and give weight to that you have no business doing the review. STOP DOING THESE REVIEWS!!! The same folks complaining about appraisers today are the same ones who wanted every deal they could get their grubby hands on 5-7 years ago.

 

[PDXOregon]

I did a review recently from when the lenders were accepting nothing but having the Declining Values box checked. Per MLS and Case-Shiller values were declining a little bit. But for properties like the subject there was a very active market and values were stable. This was for a purchase and the appraised value would have been right around the contract price without the declining market adjustments. So, the builder had to eat around $6,000 that should have been theirs.