Adapt or Die?

[JSmith43]

If we could just make one minor change to the whole process I think it would help. That change would be to require the following statment be signed and notarized by all persons buying stock in publicly held banks, mortgage companies, etc.

Our company lends YOUR money to whoever we wish whenever we wish. The collaterial for the loan is based on BPOs, AVMs, etc, or anything possible except the professional opinion of an appraiser! Do not worry, the management team has in place the golden parachute provisions in our contract. The investors CANNOT lose more than they invest. Please sign below and forward your check to......

They would sign it in a heartbeat after the attorneys polished it up a bit:icon_mrgreen:

 

[Roy Courtney]

Mentor,
I must admit that you are totally correct!

 

[JSmith43]

Mentor,
I must admit that you are totally correct!

I know what you are getting at though. I tried to promote the idea of appraisers spending money, not on lobbyists dueling with lending interests. Rather, they spent that money educating end investors, rating agencies (though they don't seem to have been much good), etc.

That was quite a few years ago. No takers, just appraiser leadership that preferred to **** money into the wind, with no way to win.

 

[SANDY]

New information today that I stumbled upon: BPO's for HELOCS, $150, with interior inspection. On going and in a state where it is only legal for a RE licensee to do CMA's/BPO/s if they are in pursuit of a listing.

Appraisers are ceding ground and customers are getting used to the BPO's and liking the results. Apparently they are better than nothing, better than an AVM alone. Quite frankly, there is nothing about an appraiser license or saluting or following current USPAP to a T that impresses these institutional users of valuation products.

Appraisers can pressure state commerce departments to punish licensed brokers and real estate agents for not following commerce department rules and regulations. However, as the rules apply in MN, all one would have to do is not be licensed as a RE broker or appraiser, just be known as having a knack for cranking out fairly reliable and timely price opinions

The level playing field is what I am after, and, frankly, it isn't a matter of RE agents winning vs appraisers winning. It is a matter of competing people, skilled in real estate valuation, being able to offer their services to customers.

I repeat, this begs for a declaratory standard. Declare the hat, declare the standard, deliver what you promise. If lenders have to use appraisers, then they will use appraisers. If they don't have to, they may or may not use them.

The less appraisers are hobbled in competing with these niche encroachments, the less the branding of appraisers as the profession to go to for valuation problems, will be eroded.

Mentor: Good summary of my overall point. In some ways I do agree with Stone-no one really wants a dumbing down of appraisal standards but at some point we are going to have to"play the game" or take our ball on go home.

I don't think I or anyone is going to be able to convince Stone and others oflike thinking that the current sow rule in USPAP is so unclear that any appraiser attempting to provide a USPAP compliant competitive product similar to a BPO is absolutely walking through a minefield. Folks claim that a USPAP compliant sow can be developed but it cannot be a canned one that could be used over and over for different properties-thus appraisers cannot compete if the sow has to be customized for almost every report. Takes too much much time and at any moment the USPAP police could swoop in with their own unknown interpretation of what should have been done. Or any one of a dozen or so "peers" could decide that the sow is unacceptable.

• <LI class=kadov-p>the expectations of parties who are regularly intended users for similar assignments; and
• what an appraiser’s peers’ actions would be in performing the same or a similar assignment.

These two USPAP requirements cannot be met with any certainty-the proverbial 1,000 bag of USPAP rocks effectively do not allow us to compete.

I challenge anyone to post a sow that would hold up. I can guarantee you that if anyone tried it would get shot full of holes just like the Zaio posted form used that was posted in another thread. Can't be done unless one is insane enough to risk one's hard earned license subjecting themselves to the uncertain exposure that USPAP hangs around an appraisers' neck!

That is my point and has been my point-not that we want to only provide these inferior products only but that if this is what our clients have determined is all that they need or want in certain lending decisions then who is better able to provide these products.... appraisers or realtors or zaioists, avms etc... Let the lenders take the responsibility for ordering the type of valuation product they have determined to be sufficient for their use and let those appraisers that want to provide it participate in competing for that share of the market-but let us compete on a level playing field. We don't have to give up providing the fully USPAP compliant poundage reports-let us compete for the yugo market if that what our clients want.
Why does the burden of deciding the appropriate product have to thrust upon us? Who came up with that concept anyway? Those lenders are big boys and girls and after all it's their money isn't it?
Some may say that it our resposibility as the valuation professionals to "protect the public"-- hogwash!!! If the powers to be want to protect the public then why is it ok for the lenders to use these un-regulated products? As Joyce has said-USPAP written by lenders for lenders to hang that 1,000 bag of rocks around our necks while the lenders use other fast and cheap products with impunity!

PS-now things would be different if anyone performing a valuation service as part of any mortgage transaction would hav eto comply with USPAP. But absent that happening, I do not see appraisers being able to compete much longer for any significant share of the market for valuation products.

 

[Webbed Feet]

New information today that I stumbled upon: BPO's for HELOCS, $150, with interior inspection. On going and in a state where it is only legal for a RE licensee to do CMA's/BPO/s if they are in pursuit of a listing.<....... snip.....>

Hi Mentor,

Great thread. There are a lot of good thoughts from everyone here.

I just wanted to say in response to the above that this entire problem, all aspects of it, has a more serious side than just appraisers obtaining a level playing field. There is a side regarding our society and many of the concepts of right and wrong we claim to live by. For my point I have to use some lousy analogies, can't be helped.

Many States found out it was not enough to have prostitution be illegal in order to get the act off the streets. They finally had to wake up and realize that attempting to procure the services of a prostitute had to also be illegal. Committing a murder could not be illegal without making trying to obtain someone to commit murder for you also illegal. So what I am pointing out here is the precedent is clearly, and strongly, set that knowingly seeking another person to do something you know damn well, or should know damn well, that will break the laws of our society is in itself a crime.

Lenders, all originators of loans, are very well aware there are many, many laws and regulations they are required to comply with in every State in this Union where they do business. It is their obligations to know what they are, abide by them, and not be asking others to break those laws for them. My point is that knowing very well they are seeking services of real estate agents / brokers, who are breaking laws in providing those services, is a crime against society. It is damaging not only to our industry, but to society itself when we allow any entity to encourage others to violate the law, most especially when it is purely for the monetary profit of that entity.

Perhaps some class action lawsuits can do what legislation that lacks the common sense to enforce it's own laws cannot.

Webbed.

 

[JSmith43]

Webbed,

I would have used a prohibition metaphor:icon_mrgreen:

 

[Kevin Little]

It is self-defeating to take a second job in order to pay for your expenses as an appraiser. Either a profession can earn you a living wage, or you should drop it and stop wasting your time working for people who secretly laugh their behinds off at you for being an easily used dope & subsidizing their wealth with your wasted time. The truth we are seeing here is that lenders own congress, and congress will back them when it comes to "streamlining" loans...the beauty is that no one will be able to blame appraisers for out of control housing prices and the eventual crash that follows any more.

 

[Couch Potato]

It is self-defeating to take a second job in order to pay for your expenses as an appraiser. Either a profession can earn you a living wage, or you should drop it and stop wasting your time working for people who secretly laugh their behinds off at you for being an easily used dope & subsidizing their wealth with your wasted time. The truth we are seeing here is that lenders own congress, and congress will back them when it comes to "streamlining" loans...the beauty is that no one will be able to blame appraisers for out of control housing prices and the eventual crash that follows any more.

I agree that one should not use another occupation to keep an appraisal business alive, but that is not the same as requiring an appraisal business to be one's sole source of income for living expenses.

Appraisal makes an excellent second job. The ongoing expenses of an appraisal business can easily be covered with one appraisal a month for someone with a good business model. There are not many part-time jobs where you set your own hours, work as much or as little as you desire and make as much per hour as one does with appraisal work (assuming you are not working for an POSAMC.) :new_smile-l:

 

[Kevin Little]

I wish I could work as much as I desire...

 

[SANDY]

Webbed:
Great last post-you put it in another broader context----- but long ago a former forumnite said it in a different way which I will sum up as follows--- The lenders are allowed to bait the traps with the finest of cheeses and eventually many of the good animals in the kingdom will get hungry enough to take the cheese!!! Until they are not allowed to get away with the things they now do-there will be no chance because there will always be those appraisers that take the cheese and there is no regulatory system that can stop it. When any one player in the game is allowed to do darn near anything with impunity it's game over!