We're Back To The Beginning

[Terrel L. Shields]

Canada is a short drive from Colorado

I think Canada has come to Colorado considering some of the draconian socialist measures the state continues to attempt to pass. Amazing that a state so dependent upon agriculture and petroleum continues to attempt to throttle both with extraordinary taxes and restrictions that, in the case of oil, would put 90%+ of the state off limits from drilling...and doing so while driving to the polls in 4WD SUVs... And seemingly cannot understand why food is so expensive except that it must be because farmers have air conditioners in their tractor cabs now. The tractor costs $180,000 so I won't spend the extra $10K for a cab with air???

 

[Bob Ipock]

In order to "do something", appraisers need to pool resources and create a public information website about appraisal in general, and about AMC;s appraiser fees and more importantly how AMC;s paying sub par fees ends of skewing appraiser selection. Prepare a printable list of questions for borrowers to bring to their lender right when borrower writes the check. And let borrowers know which lenders do not use AMC;s and assign direct, give them a boost as well.

While many borrowers may not care about the fee issue itself , they would be concerned about the result of the fee split, aka that it resulted in often a less experienced or competent person chosen for their assignment in order to profit an AMC . And even a competent even a competent appraiser, having to charge low to compete needs to hurry through a report to make it up in volume, which can compromise results.

Everyone assumes consumers dont care...first off, some do as I;ve been questioned numerous times by homeowners about fees. Second, the reason more of them don't care is because they have no information and are deliberately kept in the dark about it.

I don't expect consumer outcry so lout it immediately makes lenders change course, but an informative website that lets consumer borrowers know what is going on with a list of questions for their lender....the last thing lenders want is borrower distrust or suspicion, the lenders who enjoy free of cost AMC service or who profit from AMC's clearly don't care about appraiser fees, but they do care about public perception. If even a tiny amount of consumers choose direct assign lenders as a result the other lenders will take notice..

Clearly expecting low educated or too deep in the field to have other options to stand up to fee pressure alone is not working. But a shift in public and borrower perception can mean the appraisers are no longer alone.

The banks and lenders are perfectly happy with the AMC's. The AMC's save them big $$$$. The banks and lenders OWN Congress. This is a windmill, no need fighting it.

 

[RCA]

Let's step back for a moment, put our petty complaints aside, and really take a good look at where we are today. I am talking about residential appraising for lending.

It's not pretty.

We've been stomped on since 2008. That's not a year, or a few years, that's a flipping DECADE!

And all that time we have not managed to gather any meaningful strength of any kind. We are galley slaves.

Among many contributors here, let me point out, as an example, Eli. Year in and year out, he just keeps on "selling it" - saying things are going to get better, just wait and see. Well Eli, I don't have too many more decades to **** away, I'm sorry to say. When is enough enough?

There is no reason for things to improve. We have been infiltrated by skippies that burn and churn reports out for whatever they can get. Fees will go higher when McDonald's cooks get $25 an hour, or whatever they were protesting for. Those poor souls deserve to drive a new car too, right? If a janitor can be a "sanitary engineer" then a cook can be a "food processor specialist" I guess. Such unadulterated drivel. I'm insulted even being told this, over and over, with a straight face. Do I look stupid? Perhaps. USA - the land of the idiots. Our national flag should be the one dollar bill, because that is what everything is run on - where is the dollar? Well when we find that, then we figure out how to benefit the guy that has it. Even if it shakes the economy and brings it to its knees for almost a decade. Who cares if the masses are starving? Let them eat cake! Um, no - cut off their heads - the ones in charge I mean. It was done with good ol Marie, and it can be done again. Once the next recession hits, a few good riots and burning police cars will get someones attention - it always does, and isn't it too bad that is what it takes?

I ultimately will keep appraising as it is a good SIDE gig for some extra money. Now, the final blow that will destroy the lending part of this business is when the AMCs and lenders have their own STAFF appraisers that they can have total control over. Funny how things came back to the starting point. In the 90's the major reorganization was to get appraisers OUT of being staff and controlled by the banks. They were to be licensed, trained professionals that were independent.

Damn this country. Damn them for sucking a decade of my life away, and still lying to me telling me things will get better. You should hear the scary news I hear about the coming recession, which would already be here if it were not for the tax shifts to benefit business. We are running on borrowed time. Our economy is sinking, and we are losing industries and jobs steadily. But through it all, money talks, for sure. Follow the money and you will find the root of the problem.

And speaking of the root of the problem - if we go down, so do the billion dollar AMCs. Some of them anyway. BUT if quality is raised, then fees would go up and EVERYONE would make more money. We need muscle to fight the lenders, and we sure don't have any whatsoever. The AMCs, however, do... They are organizing and gaining strength every day. We, on the other hand, are complaining every. Single. Day. And nothing is changing, or at least not nearly fast enough. We've given it a decade. Time to slam on the brakes to this silly game. If we don't, the coming recession surely will, and it won't be pretty.

What to do? I like the idea of a Boston tea party. Publicity would be good, and isn't it ironic that Boston is in Andy Cuomo's backyard? The man that took a stand and started it all. Maybe he can show up and say a few words to the press. He likes attention, and I hope he gets a lot of it.

If we can't do something. Anything. Then we deserve what we've been getting, and will continue to get.

You want some cheese with that whine?

Residential appraising is an artificial pit created by the banks and lending industry to make appraisers their peons. It should have never happened in the first place. Money talks. And that is what did it. OK, so things like that happen and nothing can be done unless appraisers organize, and that is something independent contractors are not inclined to do. You don't have much choice but to become another kind of independent contractor.

As a compromise, and this has always been my philosophy: Develop your skills to two different semi-independent professions where the skills sets enhance each other, but the job markets are somewhat independent. Examples might be:

1. Appraiser/RE Broker or agent
2. Appraiser/ House Designer (drafter with software architecting skills, knowledge of home construction, local building code
3. Appraiser/ Home Inspector
4. Appraiser / Contractor
5. Appraiser / RE Analyst
6. Appraiser / ...

 

[Terrel L. Shields]

he banks and lenders are perfectly happy with the AMC's. The AMC's save them big $$$$.

Here they are not necessarily so happy with them at the loan level. The bank board is sold on the idea by the AMC salesman and thus it is a "done deal" but only when they realize they are more expensive than their own staff would they switch back. And our largest local bank has staff appraisers who do appraisals, but also order appraisals from local appraisers, and as one of those bank appraisers told me, "If we cannot get anyone to take the order, we call an AMC."

 

[TRESinc]

Here they are not necessarily so happy with them at the loan level. The bank board is sold on the idea by the AMC salesman and thus it is a "done deal" but only when they realize they are more expensive than their own staff would they switch back. And our largest local bank has staff appraisers who do appraisals, but also order appraisals from local appraisers, and as one of those bank appraisers told me, "If we cannot get anyone to take the order, we call an AMC."

i find it really, really hard to believe someone who is in the money business would not know the cost of something they are outsourcing before they agree to the contract. sounds like someone handed you a line of B.S.

that lender is a prime example of the problems that face us as appraisers today. can't get anyone to take a complex order? send it to an AMC. so that lender gets "free" services as many like to say and then cause that AMC to be known as a harder client to work for because they only send out the complex orders no one else wants from that client.

 

[Wayne Henry]

I think Canada has come to Colorado considering some of the draconian socialist measures the state continues to attempt to pass. Amazing that a state so dependent upon agriculture and petroleum continues to attempt to throttle both with extraordinary taxes and restrictions that, in the case of oil, would put 90%+ of the state off limits from drilling...and doing so while driving to the polls in 4WD SUVs... And seemingly cannot understand why food is so expensive except that it must be because farmers have air conditioners in their tractor cabs now. The tractor costs $180,000 so I won't spend the extra $10K for a cab with air???

I try not to get political but you mention the "S" word so here goes. Appraisers are part of regulation; deregulation equals you lose your job. Why anyone would vote against there own interest is beyond my self-preserving understanding, but it happens every two years as people are duped and sold on false promises by a used car salesman.

 

[Deleted member 130081]

I hear ya Rick. The AQB did us no favors. For a decade, in the back of everyone's minds, we all thought, once this crap runs it's course we we will be back on top of the supply and demand game. Nope. AQB halfed the requirements. Thanks AQB. Glad your primary concern is manipulating the supply of appraisers in the lenders favor as opposed to actually giving a crap about qualifications. I really don't understand how they can think flooding the market with more appraisers in an already hyper-competitive market is going to improve the industry, but, there it is.

Sigh. But what to do?

Organization is the only answer. Always has been. NAR would never let this crap fly. What does the NAR have that all the other existing appraisal organizations not have? Is it sheer numbers? Well, I suppose a bit. But what it is really, is cohesion and almost 100% membership throughout the ranks. Compare that to appraiser numbers, you have somewhere around 25-30% of all appraisers belonging to numerous different organizations - that sort of scenario has no power. By sheer virtue of being a marketing machine, the NAR does wonders for their own interests.

People automatically think organization equates to the ability to strike. That is some seriously narrow-minded vision. That would be like, the very last tool in the chest. When a trade organization is doing what it should be, that sort of desparate measure isn't necessary.

The first thing that needs to happen, is appraisers need to stop being so damn resistant to the idea. The next thing that needs to happen, is the existing organizations need to merge. Impossible? Maybe. A good first step would be for all interested appraisers to write to the various existing organizations and say "Gee, I sure would be willing to join, just as soon as all of you join together otherwise, what's the point?".

The lending game is really quite simple. There is a certain amount of appraisal money up for grabs in each loan, which is the amount the borrower is willing to gamble on the appraisal. AMC's are winning the battle on taking the largest cut of the pie, when you consider all that goes into management vs all that goes into production. Does that make me angry with AMCs? I could be, but really that would be misdirected. Frankly, I admire them for being successful. They play their game very well. Of course the next step in their evolution is to hire staff appraisers and further cut the independents out - duh. Already happening. Independents get left with the leftover/reject assignments, while the staff do all the cookies. Factor in the over-supply of appraisers currently, and those reject assignment get done on the cheap. Even funnier, many AMCs do in fact charge per assignment, per complexity, so they are making even more money in some cases.

This is a business hostile to success right now. Appraisers ought to organize, but they likely won't. Instead, appraisers will likely do nothing but scramble a bit, come to places like this and complain, many will starve out, and maybe the remaining will make a decent living after it all runs it's course, or maybe not. Who can tell?

 

[chad hampton]

Why every appraiser in the country isn't a member of their state organization is beyond me. The one's I'm familiar with are damn near free to join and do exceptional work. All volunteer work. In fact, if you don't like the direction things are going, I can almost guarantee you can walk into a leadership role as finding appraisers to participate in anything is difficult. It isn't like trying to run for congress. Go to meetings, if your location doesn't have meetings, start one. Start with 2-3 people and go from there. Might be surprised what can happen.

We should all have figured out by now that standing alone is a failed plan. But maybe some take longer to learn than others.

 

[Meandering]

Appraisal Standards Board

• Second Exposure Draft and Executive Summary of Proposed Changes for the 2020-21 Edition of USPAP

What do you think? Send us your comments: ASBComments@appraisalfoundation.org

Past Exposure Drafts


There you go, new exposure drafts, send your comments in.

.

 

[Terrel L. Shields]

Organization is the only answer. Al

The Light Horse Brigade was organized...but 670 against 10,000 (20 battalions?) Russians with cannon? You need more than organization. You need numbers we don't have. No bank in our small town and no RE office has fewer employees than there are local appraisers. We are outnumbered.