Aloft Appraiser Toolkit

[George Hatch]

You’ll find that everyone on this board who appears to support the current system does not have to work within the current system. They will probably tell you either - a)They’re not appraisers (which I’m not sure why they’re even here) or b) they don’t do GSE work and then they will make a comment about how stupid you are.

Every time I challenge you to support your allegation you either ghost the thread for a bit or devolve into casting aspersions on the personal basis. You are doing that to yourself. You are undermining your own credibility every time you make the unsupported allegation.

I just decline to allow you to get away with the untruths.

 

[glenn walker]

If the Appraisal Institute can't save it nobody can. There's no collective power within the appraisal community. A Revva type organization may end up being the spokesperson for appraisers.

Personally I would have never broken off from NAR if I had been leading the SREA which became the AI. Tha NAR had the money and political connections. But that ship sailed and it's not coming back.

 

[George Hatch]

You’ve made this comment about AMCs being easier to take to task. And it makes sense on some level. But speaking from practical experience it doesn’t work out that way.

Imagine disciplining one lone wolf attorney. Now imagine disciplining a pack of 500 attorneys who have 500 times more to lose acting as one.

I get that. The state boards operate with limited budgets. But a lot of these AMCs are operating on an even thinner margin. Prior to D-F the state appraisal boards had zero jurisdiction over the MBs, so however much leverage they have now over the AMCs it's 100% more leverage than they ever had over the MBs as a group.

And

One state going after one AMC is one thing. Several states acting together WRT that AMC would be another.

Besides,

The states aren't the only venue for handling these complaints because the lenders are the ones doing business with them, accepting and using those appraisals. The HVCC itself came about because the conduct of the lender came under scrutiny and the investigation was spreading to Fannie/Freddie. Those lenders are regulated by the feds and so are the GSEs. Etc., etc.

That the GSEs capitulated in a matter of weeks in what amounts to a consent decree rather than fighting it should be considered instructive. They have the resources to mount a well-funded defense - moreso than most of the AMCs combined - but they didn't even try.

 

[John Hassler]

There is nobody on this board that is a
big supporter of the system, just ones who are dealing with people who have
no solution's to the problems.

Here’s a solution for you. For loans that are sold, make the lender responsible for the first 5-10% of loan loss for any reason. Limit it to, say, the first five years of the loan with those losses, if any, directly covered first by bonuses paid out to executives until that pool of funds is gone.

This would accomplish a few things. The loan would command a slight premium in the secondary market for the loss protection coverage, and it would put pressure on management to be more responsible with regard to third-parties they engage (appraisers, AMCs, title companies, etc.).

 

[glenn walker]

Here’s a solution for you. For loans that are sold, make the lender responsible for the first 5-10% of loan loss for any reason. Limit it to, say, the first five years of the loan with those losses, if any, directly covered first by bonuses paid out to executives until that pool of funds is gone.

This would accomplish a few things. The loan would command a slight premium in the secondary market for the loss protection coverage, and it would put pressure on management to be more responsible with regard to third-parties they engage (appraisers, AMCs, title companies, etc.).

I like the concept but wouldn't that self insurance, make less need for traditional appraisals ? The first 10% lender gets full appraisals and insures those loans. The remaining 90% just use Waivers on them.

 

[George Hatch]

Here’s a solution for you. For loans that are sold, make the lender responsible for the first 5-10% of loan loss for any reason. Limit it to, say, the first five years of the loan with those losses, if any, directly covered first by bonuses paid out to executives until that pool of funds is gone.

This would accomplish a few things. The loan would command a slight premium in the secondary market for the loss protection coverage, and it would put pressure on management to be more responsible with regard to third-parties they engage (appraisers, AMCs, title companies, etc.).

I like the idea a lot and have suggested [govt imposes more restrictions on the conduct of the lenders] on many occasions in the past; albeit not this particular example. But IMO further intervention to commerce would be more effective if enacted in addition to, not as a substitute for other existing regulatory enforcement.


WRT voluntary adherence to and user or govt enforcement of their benchmarks will always going to be the weakest link in any regulatory strucuture. We can't enforce a standard that doesn't exist so that has to happen first; but then just having the standard is inadequate without enforcement. The mere existence of the 65mph speed limit on a highway works to a certain extent because without it there would be nothing inhibiting everyone from doing 100 or 120 every chance they got. But IRL when the state troopers start pulling speeders over more often that has an effect on the prevailing speeds the other drivers are using. That enforcement can be dialed up or dialed down as deemed necessary.

Hypothetically, if (for example) the Appraisal Institute developed a reputation for being ruthless with enforcing their code of ethics and kicking more of their members out they could run the table. The signature wouldn't just indicate to their qualifications, but also to their performance because the org wouldn't tolerate less. .

My theory - untested as yet - is that whatever participant actually enforces the higher effective benchmarks for performance sets the example all the others are compelled to at least acknowledge, if not emulate as a means of competition. It could be even just a couple of the state appraiser boards, or the GSEs or the FRT lenders or the ASC. It could even be AARO. I know the AI members rue the effects of licensing on their market share, but I think it possible they could render the licensing programs obsolete via holding their own line on performance. If the market participants thought the AI appraisers were actually more credible all the time or most of the time that would give them the clear advantage in the market. AND it would likely result in a big increase in their membership because a large percentage of all appraisers want to consider themselves to be better than average.

 

[John Hassler]

Prior to D-F the state appraisal boards had zero jurisdiction over the MBs, so however much leverage they have now over the AMCs it's 100% more leverage than they ever had over the MBs as a group.

And

One state going after one AMC is one thing. Several states acting together WRT that AMC would be another.

Besides,

The states aren't the only venue for handling these complaints because the lenders are the ones doing business with them, accepting and using those appraisals. The HVCC itself came about because the conduct of the lender came under scrutiny and the investigation was spreading to Fannie/Freddie. Those lenders are regulated by the feds and so are the GSEs. Etc., etc.

That the GSEs capitulated in a matter of weeks in what amounts to a consent decree rather than fighting it should be considered instructive. They have the resources to mount a well-funded defense - moreso than most of the AMCs combined - but they didn't even try.

MBs fell under the umbrella of the lenders’ regulators. I know it common practice to blame MBs, and there really were some bad ones, but it was the lenders who let the MBs get out of control. In fact, many lenders were encouraging the bad behavior of MBs because it brought in more loans to that lenders. I knew two subpar MBs who became lender reps to other MBs who pushed all those substandard loan programs. Each claimed to be making over $300k/year twenty years ago.

I recall an MB who was bemoaning a small local lender because they would not put him on their approved MB list. That small lender had high standards that the MB couldn’t meet. The point being lenders could have engaged ethical MBs but chose not to. Why? Because the money was in loan volume, not loan quality and we know how that turned out.

 

[chad hampton]

Every time I challenge you to support your allegation you either ghost the thread for a bit or devolve into casting aspersions on the personal basis. You are doing that to yourself. You are undermining your own credibility every time you make the unsupported allegation.

I just decline to allow you to get away with the untruths.

What are you talking about? Do you work for AMCs?

 

[John Hassler]

I like the concept but wouldn't that self insurance, make less need for traditional appraisals ? The first 10% lender gets full appraisals and insures those loans. The remaining 90% just use Waivers on them.

Okay. Fine. Whatever it takes to make lenders act responsibly works for me.

 

[glenn walker]

Hypothetically, if the Appraisal Institute developed a reputation for being ruthless with enforcing their code of ethics and kicking more of their members out they could run the table. The signature wouldn't just indicate to their qualifications, but also to their performance.

My theory is that whatever participant actually enforces the higher effective benchmarks for performance sets the example all the others are compelled to at least acknowledge, if not emulate as a means of competition. It could be even just a couple of the state appraiser boards, or the GSEs or the FRT lenders or the ASC. It could even be AARO.

Except the pricing point would also have to rise dramatically on residential fees and so far the Price Versus Quality has never been sold effectively to the lender's or GSES. Their goal is to get fees lower not higher.

Okay. Fine. Whatever it takes to make lenders act responsibly works for me.

Deleted.