Appraisal Independence & Bias

[chad hampton]

It's true. You really don't know what you're talking about. WaMu got caught precisely *because* of the paper trail they left via engaging that much volume through the AMC. They proved their own pattern of conduct. Right down to identifying the individuals who were doing the pressure and in their own words.

The GSEs caved immediately upon threat of an outside audit of their files, most likely because they knew how that audit would turn out. Why else would they cave so quickly if not for realizing what that outcome would be?

Thank you for confirming what I said

 

[chad hampton]

I'm confused you keep saying you're primary income is working for a private hard money lender not doing appraisals for them. So you love lenders and are getting a paycheck from them ?

I love the lending and appraisal business. I’m currently looking for one more six figure income stream if you know of anything.

 

[George Hatch]

So a bunch of sleazy players got caught. How in the world does that prove AMC solves the pressure problem wrt lender misconduct? Above, you wrote that appraisers were pressured by the AMC I assumed was owned by WAMU? The fact that a paper trail was created could have been found with or without an AMC.

The sleazy large-scale players above have survived; the folks economically punished were the low-on-the-totem-pole appraisers. The fact that the GSEs found a legal way to allow unfettered lender value without evidence of pressure... was to evade the appraisal regs about value pressure by eliminating the appraisal!! .

Thus begat the WAIVER, where lenders or borrowers can estimate whatever value they want, or use the sc price as the value. (Subject to a green light from GSE mystery black box data analytics) - Has anybody ever seen the data analytics or know if it includes an AVM or value range?

The feature is appraiser independence from the sales side. In the case of WAMU it was their own employees who were pushing for more cooperation.

Go back to the HVCC. It wasn't just an agreement by the GSEs to not accept MB-engaged appraisals but also laid out in some detail the extent to which the lenders they did accept from were supposed to isolate the appraisers from the sales side. Those steps paralleled the same conduct laid out for the FRTs/RRTs in FIRREA 15 years earlier.

 

[George Hatch]

Thank you for confirming what I said

Getting caught because of the aggregation didn't diminish the allegation of more widely dispersed MBs doing the same; it was just easier to prove.

Remember, the AMCs were neither fish nor fowl back then, same as the MBs. They were effectively invisible to the banking regulators until D-F came along. The difference between them is that the lenders are responsible for the chain of custody of the engagement when they're the ones doing it, whether directly or indirectly.

The AMC types have commented that they're under regular scrutiny now. Just because they're subject to examination and audit doesn't guarantee that they are in compliance all the time; it just means that if one of those audits start looking hard enough for problems the paper trail for whatever pattern of conduct they have engaged in will be impossible to conceal. Not when there's a lot of volume involved.

 

[gregb]

The feature is appraiser independence from the sales side. In the case of WAMU it was their own employees who were pushing for more cooperation.

In my case, why I let go WAMU as a client, the appraisal coordinator pre-AMC, pressured me on value for an assignment in which a WAMU loan officer was making a purchase.

 

[George Hatch]

I've gotten (ghosted) by a number of direct lenders over the years for not being cooperative. Direct engagement is not a silver bullet for anti-meddling; it just makes it a little harder for the bad actors to hide by dispersion.

The HVCC was between the lenders and the GSEs; specifically what the GSEs would/would not accept.

 

[gregb]

Will not forget the walk out in the park with mortgage broker where they said "looking for an appraiser who will bring in the highest defendable value every time" and thought wonder the source of that definition of market value.

 

[J Grant]

The feature is appraiser independence from the sales side. In the case of WAMU it was their own employees who were pushing for more cooperation.

Go back to the HVCC. It wasn't just an agreement by the GSEs to not accept MB-engaged appraisals but also laid out in some detail the extent to which the lenders they did accept from were supposed to isolate the appraisers from the sales side. Those steps paralleled the same conduct laid out for the FRTs/RRTs in FIRREA 15 years earlier.

So the "solution" was to place an AMC between the appraiser and the sales side - said AMC with a conflict of interest to keep their lender customer happy by passing the pressure along and acting as a cover of plausible deniability, for which the AMC took a hefty chunk of the appraisal fee.

I know you supported the RR system, which would have effectively isolated the appraiser from sales-side pressure - which was the very reason it was not deployed.

 

[George Hatch]

That was the solution that most of the lenders chose. That's different from saying they were forced to use that alternative.

 

[J Grant]

That was the solution that most of the lenders chose. That's different from saying they were forced to use that alternative.

The lenders, who were the cause of the problem in the first place, shouldn't have been allowed to choose the solution.

Up until the market crashed, lenders used mortgage brokers to do their dirty work, process the C and D credit borrowers, S T R E T C H value if they could to make a deal work. The lenders, meanwhile, were lending at predatory and high-risk terms: no money down, no asset or income verification, 125% LTV, teaser rates, sales contract flips at closing allowed, etc. The GSE's greenlighted it , and a result was toxic loans, C and D paper packaged with A and B paper and not disclosed

What a group! Allowing the same group to be in charge ...what can one say.