PAREA program

[George Hatch]

Taking any trend in commerce to its logical conclusion will (IMO) generally only be limited by its economic viability.

There's an argument out there that low labor costs impede the motivation for technical innovation and high labor costs incentivize the innovation and widespread adoption of automation.

 

[George Hatch]

As far as AI goes, I question how many of the parallels with the pre-existing conventional wisdom they come up with is caused by them being influenced by the crowd vs how many of those parallels are the effect of the crowd being right in the first place.

 

[glenn walker]

The same reason appraisers rarely have an office assistant anymore. Payroll, insurance, and total cost is prohibitive on a low profit margin product.

Technology's advanced to where at this juncture most are just a body's collecting data snd a word processor into a forms program.

Now the GSEs and lender's just need to replace the physical body of the appraiser with a Robot or a cheaper lower wage crop picker. BINGO In steps the PDC inspectors and project 2028 is almost complete.

 

[J Grant]

Lender

2005: I am not paying one dime toward the engagement, management, tax withholding, accounting or any part of the appraisal fee​

2010: I am not paying one dime toward the engagement, management, tax withholding, accounting or any part of the appraisal fee​

​

Various appraisers

The lenders went corrupt in 2008 because the govt let them do it​

Agree -

What happened was along the lines of the legal teams of lenders and AMC;s saw a mutually beneficial way to operate together at teh expense of the appraiser and ran with it - you hate morality and ethics being part of anything but it is always part of a decision, wither in business or anything else. The lenders took advantage of the fee split that the AMC's saw as a way to compensate them without charging the lender a cost.

If anyone was corrupted, as the term is normally used, it was the regulators who teh HVCC to allow a second provision to allow AMCs their own internal surveys for "C and R - what a travesty, it defeated the purpose of the original C and R intention of the bill.

The AMC;s did not settle for a reasonable amount of the fee, they went all in from day one applied extreme pressure and used their new high volume ( demand ) control of the market to extract huge fee concessions from the appraisers who overnight whith HVC saw their former lender clients now use an AMC.

The GSEs did NOTHING to stop it, never spoke out for moderation or a capping of the AMC management percent or lobbying that the lender pay a cost and now are all in for expanding an alliance with the AMC footprint. -

PAREA is just another chapter of exploitation, this time of minorities that there is a doo opening for them into the profession , yes there is but 20-25 years too late -

 

[George Hatch]

IMO the level of morality and wisdom and restraint and compassion and all that are not among the factors that changed. I don't believe the lenders were more moral before and less moral after. I believe they have acted consistently all along. That's the same reason I believe they will continue to act as aggressively as their options will permit if/when additional prohibitions on their conduct are imposed upon them.

I don't believe in the existence of the compassionate and socially responsible lender. not to any significant extent. I believe in the prevalence of more-prudent vs less-prudent. I think it's mostly just business.

 

[J Grant]

As far as AI goes, I question how many of the parallels with the pre-existing conventional wisdom they come up with is caused by them being influenced by the crowd vs how many of those parallels are the effect of the crowd being right in the first place.

IDK, it is too early to see what AI can really do and if it will be integrated with traditional appraisals or touted as a way to replace them in part or whole - depends on how AI performs and what it is really capable of and what its limitations and flaws are.

One thing we know is that human nature has not changed - since the beginning of time it has a been a fight of good vs evil, crooks vs honest and the slime players always find a way to corrupt anything or anyone and they will find a way to do that with AI_ which is scary due to the scale and reach of AI esp with corporate control of it.

 

[George Hatch]

I've said this many times.

I accept human nature for what it is, so that's why I think we should base our expectations for people on what we think most of them will do all the time or almost all the time. Not base our minimum expectations for people on what we think people should do if only "we are better than that".

Take USPAP as an example. Based on my direct exposure to thousands of appraisers in QE and CE settings over many years I believe most appraisers want to do right by their assignments. That includes meeting the actual SR1/SR2 expectations the users operate under. I don't think there are very many outlaws among the appraisers, actively conspiring to lie to their users.

I expect brokers to act like brokers​

I expect lenders to act like lenders​

I expect borrowers to act like borrowers​

I expect appraisers to act like appraisers.​

What I don't expect is for any of the non-appraisers to act like appraisers. That becomes the unrealistic expectation. Not because we're any better than anyone else but because the roles are different. An RE broker who acts like an appraiser is probably not doing right by their client because their job is to advocate and do the most they can in advocacy for their client's interests. Not sit back and call balls and strikes regardless of the outcome.

 

[J Grant]

I've said this many times.

I accept human nature for what it is, so that's why I think we should base our expectations for people on what we think most of them will do all the time or almost all the time. Not base our minimum expectations for people on what we think people should do if only "we are better than that".

Take USPAP as an example. Based on my direct exposure to thousands of appraisers in QE and CE settings over many years I believe most appraisers want to do right by their assignments. That includes meeting the actual SR1/SR2 expectations the users operate under. I don't think there are very many outlaws among the appraisers, actively conspiring to lie to their users.

I expect brokers to act like brokers
I expect lenders to act like lenders
I expect borrowers to act like borrowers
I expect appraisers to act like appraisers.

What I don't expect is for any of the non-appraisers to act like appraisers. That becomes the unrealistic expectation. IMO

-

The fly in the ointment is greed is gonna be greed- the US taxpayers backstops GSE loans and having their and lenders/AMCs control the valuaotns as well the corporations owning and controlling the MLS, the data, the software, and now starving appraisers of fees and client opins via manipulated supply and demand has neutralized the role of the appraiser- by design and intent. An appraiser coming in "low " (translation: Market value ) that happens to be under what is needed for a deal is referred to as causing "friction."

The high prices valuations prop up, means owner occupant buyers are at a disadvantage and I see many more LLC and investor purchases over the past few years then in the prior 2 decades plus I have been aprpaising. .

We saw the let greed do its thing affect markets in the 2008 crash with loans becoming predatory, and now we see it with valuations becoming predatory - the WAIVER does not use an appraisal as a way to evade the target value regulations around appraisals. And it was apparent the AMC firewall is a fail,- it is what the entities want, otherwise they would have corrected it.

The appraisal as a valuable product can be replaced with alternate forms of valuation but the ROLE of the appraiser served as a brake to the greed train, and because it is now seen as "friction" instead of a good thing, the entities are in lockstep with many lenders and their affiliated AMC's to neuter the apprasier's role.

A few more rather than less ethical loan wholesalers and lenders still exist, perhaps their investors want a better form of valuation outside the AMC realm,- how long that will continue is unknown.

 

[glenn walker]

Ethically Driven Appraisals LLC.

 

[J Grant]

I've said this many times.

I accept human nature for what it is, so that's why I think we should base our expectations for people on what we think most of them will do all the time or almost all the time. Not base our minimum expectations for people on what we think people should do if only "we are better than that".

Take USPAP as an example. Based on my direct exposure to thousands of appraisers in QE and CE settings over many years I believe most appraisers want to do right by their assignments. That includes meeting the actual SR1/SR2 expectations the users operate under. I don't think there are very many outlaws among the appraisers, actively conspiring to lie to their users.

I expect brokers to act like brokers​

I expect lenders to act like lenders​

I expect borrowers to act like borrowers​

I expect appraisers to act like appraisers.​

What I don't expect is for any of the non-appraisers to act like appraisers. That becomes the unrealistic expectation. Not because we're any better than anyone else but because the roles are different. An RE broker who acts like an appraiser is probably not doing right by their client because their job is to advocate and do the most they can in advocacy for their client's interests. Not sit back and call balls and strikes regardless of the outcome.

I think you might confuse morals ( what people should do, be better) with ethics - USPAP has a set of ethical standards, not moral standards. Same for other professions. The problem is that appraisers are often punished for acting like appraisers - fulfilling a neutral umpire role /

The fact that the AMC firewall is a fail, with just as much or more pressure to "make value" than in the bad old days is a travesty. An argument that if it made things even 10% better is worth it is ridiculous. Appraisers who fear work being cut off if they come in "low" on more than rare occasion cn not function in their intended role. Many try the best they can within that capacity, others have given up and just want to collect a fee, others simply will not accept mortgage lending work because of this conflict of interest. Teh same might apply to commercial but there is a much wider client pool and type of work available, making it easier to say " no"

Having AMCs engage in the demoralizing practice of fee bidding to "win" an assignment contributed to the appraisers' lack of confidence in standing up to these all-powerful clients who control a large portion of work. RE agents and lenders do not have this problem—their potential customers are thousands and even hundreds of thousands of consumers and buyers.

There are some clients who are more ethical wrt dropping appraisers for not hitting value and most of them are not operating in the AMC order pieple tohgh to be fair some direct order lenders or lenders who own a captive order AMC can be no better.