You seem to be underinformed. I had more independence from external meddling in my assignments when I worked on staff then I ever had with ANY of the MBs I worked for, either before or after. At the bank I worked at the loan officers weren't allowed to step foot on our floor or call an appraiser on the phone. If they had a dispute about an appraisal they had to go through their management which then interfaced with our management on a peer basis. And then our management defended us when we were right, or they scorched us when we were wrong. Which didn't happen very often. Now that wasn't the case at all banks, but it was standard at all the big operations in my region; and I know this based on my interactions with those appraisers who came through my CE courses years later.
As for people not being trained it's true that licensing equalized that situation, but prior to that most appraisers who were ever formally trained had been trained while working for either a lender or one of the big fee shops. It wasn't the staff appraisers who went from zero to being self employed in a year and learning on the borrower's dime; it was the fee appraisers in some of those fee shops. As for me, I took my first Appraisal 101 courses while I was in college, and then I took another 2-week course years later when I started working for a fee shop that an SRA was running - back when SRAs were part of the Society or Real Estate Appraisers. I took my other courses on my own dime after that but I learned the basics while working under supervision. For years - plural.
You don't see as many appraisal departments at the banks now for the same reason you don't see the residential fee shops with 20 and 50 fee appraisers anymore. In my county alone there had been at least a dozen fee shops of that size operating prior to licensing, not to mention all the other smaller shops of 4-10 heads.
I personally worked in fee shops with several fee appraisers who by that point had 10 and 20 years of experience appraising houses. They were working for split fees because they weren't economically viable working for themselves. People who came into appraising after licensing tend not to realize what it was really like.
Five years later almost all of those fee shops were gone; partly due to licensing but also partly due to technology. Prior to the 1990 or so it took equipment and dataplants that were much more expensive and much less effective in order to perform an appraisal. It simply wasn't economically feasible to work solo - you had to amortize those costs over several heads.
So now in the last few years the technology and the regs have once again resulted in more changes in the marketplace. These changes have rendered the door-to-door solicitation of MBs as economically unfeasible as the mid-sized fee shop where a dozen drones work for a designated appraiser who has all the connections.
I have no doubt that you yourself were ethical George, and worked with ethical people.
However, how many examples do we need to showcase that banks can and will - in a nutshell - do whatever it takes to make a buck. Here is a quote from the meltdown in the 80's: "The Justice Department successfully used FIRREA to prosecute banks that made bad loans during the subprime mortgage crisis. The six largest banks paid $108 billion in fines. They also had to buy back tens of billions of bad mortgage-backed securities sold to investors on the secondary market. FIRREA was also used to prosecute rating agency Standard & Poors for saying those bad loans were safe investments."
Pretty bad isn't it? How did this happen? That's a topic for a book, not a blog.
Amazingly, that's almost exactly the scenario that happened AGAIN in 2008, which brought the ENTIRE country to its knees that time around. How did that happen AGAIN?
So here we are again. The powers that be want to dismantle the systems in place that are supposed to prevent this from happening AGAIN! They want to reduce an appraisal to a quickie one page report that takes less than one hour, with no inspection. Or, better yet, just do away with appraisals all together.
I too have a lot of experience in this business. I have had great clients that were as ethical as they come, and were a pleasure to work with. I have also had clients that asked me point blank to falsify reports to hit a number. It's a victimless crime right? They're going to make their payments to the bank - the bank makes a loan and makes a lot of money - and the appraiser makes money too.
You have been doing this much longer than I have, so I am sure you have seen this. We all know it exists. Thank goodness we have USPAP to guide us - and regulators to regulate - and all the other safeguards so this can't happen AGAIN, right? Follow the money. It will happen again, because everyone is in on it. And, for some unknown reason, whenever it does happen - and I think 3 times in 30 years is WAY TOO MUCH - nobody is held accountable. It's just write a check, talk a lot about it, and life goes on - rules to follow or not.
Just because you and I have never participated in it, doesn't mean it isn't there. Banks would LOVE to have their in house appraisers again. Those that don't "get along" would be out. Self regulating. What a concept! Maybe even better - have a separate ARM of the bank have their own staff appraisers to play the game. That way if and when they are "caught" the bank is held harmless and merely has to switch AMCs to continue business! Wow - can it get any better than that?
Here is an interesting thought (below) quoted from:
https://www.thebalance.com/what-is-firrea-3305839
"Why did it take a literal Act of Congress to address this bank crisis? More than half the nation's
Savings and Loans banks were failing. The Federal Savings and Loan Insurance Corporation had spent $20 billion to insure depositors of the failed banks. That bankrupted it. Without FIRREA, depositors in bankrupt S&Ls would have simply lost their money.
FIRREA also changed Savings and Loan regulations to help prevent further unsound investments and fraud."
Did that say to "HELP" prevent unsound investments and fraud? Not actually prevent it, just kind of help a little bit. Maybe. How nice. Well, that's exactly what it did - a little bit - but it sure didn't prevent any unsound investments or fraud at all did it? It sure did bring the country to it's knees for a very long time.
And you're advocating for banks to play fair if they are in charge with no oversight or separation of procedures? Are we willing to give them that much latitude? Not me.
