We're Back To The Beginning

[Wayne Henry]

Suffice it to say that what would have been better is something like this:

1. Between the financial institutions and the appraisers, you put a “dual” transmission that is essentially a recipe book of appraisal types, with a fixed set of options that the clients can choose from. And the second part of the transmission is a central ordering exchange that routes the orders to the appraisers, based on the recipe required, the difficulty and the rating of the appraiser.

2. There is an appraisal board, consisting of licensed review appraisers, either at the federal level or state level or both, that monitors and reviews the work of appraisers, assigns designations of competency, routes orders, handles enforcement and so on. In fact, it would be like a beefed up state agency that then takes on the added task of routing orders, handling order transactions and paying appraisers. This part essentially routes payments from the clients through to the appraisers.

3. The financial institutions would have to learn to make do with the given recipe book – but could of course ask for incremental changes via the appraisal board.

4. Appraisers are then free to focus on doing good appraisals.

- Well that should be good for starters, anyway.

Your explaining regulation and one party would like to deregulate. Appraisers are part of a regulation and your four bullet points would be regulation which they are trying to do away with.

 

[Deleted member 130081]

What is your personal plan to "adapt? "

You make a good point. However , there is another aspect to it. The lenders are actually not the people with the money...they are a gateway to the money, but most lenders are glorified salesmen, acting as brokers who sell the loans.. ."The people with the money", aka who fund, insure, and are invest are the US taxpayer as guarantor and secondary market investors/entities.

Therefore, even though lenders want appraisers curtailed or eliminated, they do not have the only voice about it. If they had the only voice, appraisers would have been out years ago. ( along with a lot of other safeguards )
I do believe the role of appraisers will change in lending and we face change from technology but not going extinct as fast as some predict.

The best way for appraisers imo to deal with changes in the lending market, is to tap into the new internet market of buying/selling/evaluation and develop it for appraisers. Create their/our alternate market and income stream.

It would be complacent to rely on the common sense aspect of of regulatory policy -Of course involvement is always a plus. The clarion calls for "organizing" has never worked in the past and those making the call put forth zero plan to make it work now. Nice idea but hoping it will save us not a good bet .

Here is the plan J. Step #1 - Keep talking about it. Change the narrative first. Naysayers need to be reminded that no organization will accomplish nothing, while organization provides at least some opportunity to do something. Step #2 - If step 1 fails, step 2 is moot. Step 2 is encouraging the existing organizations to merge. Why is this the best strategy? Because the existing organizations have years of work and thousands of members invested. Trying to start an entirely new organization would be starting from scratch and it will be difficult for existing organizations to simply walk away from all they have invested and accomplished so far. This is a natural course and easy sort of progression while starting from scratch would be going against the grain.

Why is this the overall plan? Because there has to be an order of things. People need to be interested before membership can happen and at the same time, those new interested people need to convey to the existing organizations that everyone needs to merge before the existing organizations would see a benefit from merging.

I love your idea about getting a national web-based ordering platform for the non-lender work. How would someone go about doing that? What would it look like if they did? I think this is something a trade organization could accomplish and accomplish well, as they would have the resources and appraisers behind them. Conversely, if a single person were to try this sort of thing, it would be a large single expense in money and time that would need a commensurate return before they would decide to do it meaning, it would likely be something that was very good for the person who started it and not so much for the appraisers who work it. What would you prefer to see take over this potential market?

 

[J Grant]

Frecords I will get back to you later or by tomorrow, on it...glad to see interest. Have to finish a report and on deadline...

 

[TRESinc]

We should all have figured out by now that standing alone is a failed plan. But maybe some never do

fixed

You know, there has been some talk about quality here lately. Who does less, who does more, why they do it, how much it pays, etc. I think most everyone wants to do a great job. I think few people wake up and think gee, I hope I can do a super crap job today - at least not self-employed people. But as far as doing the minimum and such, it does in fact come down to the money. A client demand or expectation of higher quality will only be truly achieved when there is money there to pay for it. It's not lazy appraisers, it's the economics.

not everyone has the ability to produce a higher quality report no matter the fee offered. i have reviewed some reports where the appraiser was paid a damn good fee ($600+ range for a non-complex SFR, and that fee is $150-250 over what is typically paid based on the reviews i have performed in this market) and the report was pure crap. too many appraisers rely on canned statements and general commentary and an apparent lack of research ability. simply raising the fees would not produce higher quality reports.

About 10-15 yrs ago the warning flags were going up and I took the classes and worked to get the experience for r/w work and work for others entities like the DNR, local municipalities, court appointed work, and other avenues. This shift in lending appraisal work has not occurred overnight. Did anyone actually believe that all of the data mining that has been going on for years wouldn't eventually be used against us?

Mortgage work is about 10% of my work (local lenders) and none is for F/F and I've never worked for an AMC. I did about 2-3 appraisals on the UAD form for one local lender and told them to give that work to someone else. The day a form told me I had to call a 1.5 bath house a 1.1 bath house I wanted nothing more to do with it. LOL. I'm as stubborn as anyone, maybe more than most, but the writing on the wall was obvious to me.

I invested quite a bit of time and money to get out of mortgage lending appraising...not saying it was easy but that segment of appraising will continue to change. Appraisers can either sit back, watch and complain or they can take control of their professional lives. So far, whining about it doesn't seem to have slowed the progress towards our marginalization.

BTW, the people with the real money want us gone, not the middle men because they would be next.

exactly! this should be posted as a sticky message so we can direct those who whine and complain about how bad things are in the lending world to motivate them to get off their collective a$ses and do something to improve their situation.

 

[Deleted member 130081]

not everyone has the ability to produce a higher quality report no matter the fee offered. i have reviewed some reports where the appraiser was paid a damn good fee ($600+ range for a non-complex SFR, and that fee is $150-250 over what is typically paid based on the reviews i have performed in this market) and the report was pure crap. too many appraisers rely on canned statements and general commentary and an apparent lack of research ability. simply raising the fees would not produce higher quality reports.

Yup. No argument there. There will always be the folks who do crap work either because they can't do any better and/or they could care less to. The point is however, what is the incentive to do more for less? Raising fees will not simply raise quality however, lowering fees will not raise quality ever. You get what you pay for quite often.

 

[Terrel L. Shields]

I started winding down residential about 15 years ago, out by 2005. In house bank for another 10. Now I have only one bank I will work with outside a rare occasion and the rest is estates and such.

 

[RCA]

The problem with AMCs is that they get paid directly by lenders who get to pick and choose AMCs. So, the lenders exert decisive power over the AMCs. The AMCs, while they do act as a kind of limited "transmission" between the lenders and appraisers, are really just an extension of the lenders will power. They simply provide outsourcing of appraisal staffing duties - they find contract appraisers for the lenders. As an appraiser I much prefer the good old days when there were hundreds of mortgage brokers, banks and lenders at my doorstep. If one got burned because I killed their deal, there was always another one around the corner with a new order. From my perspective, I could live with it. AMCs introduce a big problem, they are a bit different in being so direct about hitting a target, but if you don't play ball, I imagine they simply cut you off. The real problem is that there are so few, you can't afford to turn your back on too many. That's ugly. You know, I have been testing the waters over the last three months, and can firmly say that with respect to AMCs, fees are lower than they were 10 years ago. $350 for a 1004 for a condo in SF, with of all things warnings about complying with umpteen regulations, rating, reporting and so on. The order was snapped up fairly quickly (there was a button to accept or reject - but I never made it to reject ...). Even large $4M home appraisals are getting snapped up for rather low fees. ... All most lenders need is a rubber stamp they could get from RedFin, in most cases, - except for regulations they have to contend with. The system is very messed for anyone who takes appraisal seriously.

As far as paying for a respectable "transmission" or interface between lenders and appraisers, the lenders would have to pay for it. It would take a lot of political pressure to do that. But, there is too much money on the lending side to expect the leaders in the appraisal establishment to do anything about this. Their nose follows the lead of the financial institutions. They are a haven of good paying jobs and opportunities. Politically, you could never expect anything from the Trump organization, the Republican leadership or even worse the very corrupt Democratic leadership.

Many say, that appraisals for home lending are not that valuable because credit ratings and personal information are another more useful kind of collateral. So, perhaps hybrid appraisals are all that is required.

But, getting back to appraisers, serious appraisers, i.e. those who take doing accurate appraisals seriously as a profession, there are other types of appraisal that are more interesting. As you can see on this forum, many are moving away from doing appraisals for typical lenders.

Appraisals and valuations for advanced decision making is probably a new developing field to watch out for. This is where decision makers need accurate information, such as ANSI/BOMA measurements, home "health" data, accurate market pricing models and so on. I don't know that such appraisers have to be all that familiar with advanced statistics, such as Bayesian Statistics and non-parametric statistics, but it certainly wouldn't hurt.

 

[TRESinc]

The problem with AMCs is that they get paid directly by lenders who get to pick and choose AMCs. So, the lenders exert decisive power over the AMCs. The AMCs, while they do act as a kind of limited "transmission" between the lenders and appraisers, are really just an extension of the lenders will power. They simply provide outsourcing of appraisal staffing duties - they find contract appraisers for the lenders.

yep, that's what AMCs are - agents of the lender. ask marion and she can post up lots of things about that topic.

As an appraiser I much prefer the good old days when there were hundreds of mortgage brokers, banks and lenders at my doorstep. If one got burned because I killed their deal, there was always another one around the corner with a new order. From my perspective, I could live with it.

ahhh, another nostalgic look back the the old days where people only remember the good parts. how about "this deal didn't close so i will get you on the next one" or "just comp this out for me real quick" or "no, you don't get paid until the deal closes and i am paid, so wait up to a couple months for your fee". ya, the good old days...

The real problem is that there are so few, you can't afford to turn your back on too many.

there are literally thousands of AMCs across the nation on top of the direct engagement lenders. if you can't find clients then you must be doing something wrong.

You know, I have been testing the waters over the last three months, and can firmly say that with respect to AMCs, fees are lower than they were 10 years ago. $350 for a 1004 for a condo in SF, with of all things warnings about complying with umpteen regulations, rating, reporting and so on. The order was snapped up fairly quickly (there was a button to accept or reject - but I never made it to reject ...).

supply and demand. there is a glut of appraisers in california, everyone knows that, just like florida. if others in your market are accepting orders at $350 then that is what your market will bear for those clients. don't agree? great! get different clients or start appraising things that others don't and build yourself a niche. better yet move away from residential lending assignments all together and end all your problems!

As far as paying for a respectable "transmission" or interface between lenders and appraisers, the lenders would have to pay for it. It would take a lot of political pressure to do that. But, there is too much money on the lending side to expect the leaders in the appraisal establishment to do anything about this. Their nose follows the lead of the financial institutions. They are a haven of good paying jobs and opportunities. Politically, you could never expect anything from the Trump organization, the Republican leadership or even worse the very corrupt Democratic leadership.

ahhh, so now it's not the fault of AMCs but the president, who has been in office for 2 years. i am not a political person but maybe i should become one so i can blame any problems i experience on a political party or figure. that's much easier to do that actually solve the problem.

 

[Overimprovement]

Change is happening; adapt or become extinct.

We don't have to LIKE change. We can even complain about the changes. Venting helps, sure. We can even discuss why it shouldn't BE changing.

But if we are all honest with ourselves, we have to admit that the main reason most of us are against the changes that SEEM to be coming is because it likely will PERSONALLY affect us financially. Again, nothing wrong with that. But let's be honest with ourselves. We aren't idealists worried about the next Fannie bailout, we are worried about our own bank accounts. Not too proud to admit that is a primary motivator in my life, because I'm not a welfare fan or socialist. I am a pure capitalist at heart. The opportunity is there for most all of us to be successful for many years to come. But only if we are willing to recognize the coming landscape as reality, and not just be an ostrich.

We may have to get out of our comfort zones and actually talk to real people, maybe even in person. (gasp!) Get to know some local B/K or divorce attorneys. Invite them to lunch. Join your local Rotary/Lions/Kiwanis club. Network some. You don't have to like people, but you do need to know them. And fool them enough to make them think you DO like them.

If you truly think the 1004s will keep rolling in for the next 15 years at current or better C&R, that is your choice. Just do nothing. I disagree, but the only people that care if I am right or wrong are my kids and wife.

 

[TRESinc]

We don't have to LIKE change. We can even complain about the changes. Venting helps, sure. We can even discuss why it shouldn't BE changing.

But if we are all honest with ourselves, we have to admit that the main reason most of us are against the changes that SEEM to be coming is because it likely will PERSONALLY affect us financially. Again, nothing wrong with that. But let's be honest with ourselves. We aren't idealists worried about the next Fannie bailout, we are worried about our own bank accounts. Not too proud to admit that is a primary motivator in my life, because I'm not a welfare fan or socialist. I am a pure capitalist at heart. The opportunity is there for most all of us to be successful for many years to come. But only if we are willing to recognize the coming landscape as reality, and not just be an ostrich.

We may have to get out of our comfort zones and actually talk to real people, maybe even in person. (gasp!) Get to know some local B/K or divorce attorneys. Invite them to lunch. Join your local Rotary/Lions/Kiwanis club. Network some. You don't have to like people, but you do need to know them. And fool them enough to make them think you DO like them.

If you truly think the 1004s will keep rolling in for the next 15 years at current or better C&R, that is your choice. Just do nothing. I disagree, but the only people that care if I am right or wrong are my kids and wife.

well said! as we have seen on here though it's a lot easier to whine and moan and complain about how things are vs getting off your butt and actively doing something, ANYTHING, to improve your situation. it takes time and effort but can be accomplished. many of us have posted so on here.