The New Appraisal Industry

[George Hatch]

I wonder if I had been involved back then and been one of these appraisers who fought so hard to hand their business over to AMC‘s if I would still be hanging onto that logic and defending it or if I would be one to just admit that I ****ed up and beg appraisers for forgiveness

Dealing with the occasional pressure from a lone wolf mortgage broker seems like a small problem compared to today’s dumpster fire of a profession.

I was always right and you were always wrong. Your MB clients are not lenders, they don't make lending decisions, it's not their money and they have no legitimate business even talking to an appraiser except via ROV after the fact. Congress closed that loop on the FRT side in 1990 for exactly that reason. And really, if they had been smarter about it they would have closed it on the SFR side at the same time. You would have never come up thinking MB-select was standard practice to begin with and we wouldn't even be having this discussion.

It's an inherent and irreconcialable conflict of interest for loan production to touch any aspect of due diligence except to help their clients to fill out loan applications and apply for the different loan programs. Regardless of how much cutting them off has cost you since they were cut off.

You don't matter and your financial interests literally don't count in that equation. Same as has always applied to my side of the business from the outset.

 

[djd09]

I wonder if they ever got together at the breakfast club

dont dont dont you...forget about me

 

[djd09]

i dont know why your whining...2008 looks to the floor thanks to mortgage brokers estimating value via waivers

 

[George Hatch]

They're literally just filling out loan applications and applying for whatever loan programs they're applying for. The application form asks for a loan amount, too; but that doesn't figure into the due diligence, either. As evidenced by the fact that not all loan applications are approved.

The MBs don't control any aspect of the lender's decision making process. And they don't control the appraiser when that due diligence includes an appraisal. You just wish they did.

 

[djd09]

they just insert the value...ask dw

 

[Surf Cat]

Your MB clients are not lenders, they don't make lending decisions, it's not their money and they have no legitimate business even talking to an appraiser except via ROV after the fact.

Why is an ROV the exception? Isn't that "valuation"? Wouldn't the ROV be more in the realm of the realtor? You know, the one who stands to lose their commission if the deal falls through?

Public trust, personal interests, relationships.....Oh, my....

Appraiser Independence has eroded due to systemic pressures from lenders & AMCs. Being engaged by mortgage brokers was like being in the kiddie pool in comparison to the shark infested waters we're in now.

 

[djd09]

yep...now you dont lose just one broker...you lose a whole financial institution if you dont hit the number...but i guess you would have to be boots on the ground to understand

 

[George Hatch]

Why is an ROV the exception? Isn't that "valuation"? Wouldn't the ROV be more in the realm of the realtor? You know, the one who stands to lose their commission if the deal falls through?

Public trust, personal interests, relationships.....Oh, my....

Appraiser Independence has eroded due to systemic pressures from lenders & AMCs. Being engaged by mortgage brokers was like being in the kiddie pool in comparison to the shark infested waters we're in now.

Depending on the lender, I don't think the source of the appeal matters much to them. Borrower, seller, broker, MB, whomever.

Every element of the "shark-infested waters" would still exist in their current form even if the MBs hadn't been cut out. All the HVCC and DF did was reduce the number of sharks. The AVMs would still be on the march, the usage of hybrids and waivers would still be increasing and the lenders would still be using appraisals that we consider to be sloppy or inadequate.

 

[djd09]

go get a second appraisal you cheapos...

 

[George Hatch]

yep...now you dont lose just one broker...you lose a whole financial institution if you dont hit the number...but i guess you would have to be boots on the ground to understand

I've been doing 100% direct engagement for over 30 years now. I have way more experience with the "risks" of losing the entire financial institution than you or anyone you know. And I have indeed lost some of those clients over the years as a result of coming in low or being deemed difficult to work with.

I've got 3 reports I'm supposed to write up today and tomorrow (one of them is actually an SFR). My boots are more grounded in appraisal assignments and client relationships than either you or Chad. The fact that I'm not a one-trick pony does not make me not-a-working-appraiser.