Appraisal Independence & Bias

[djd09]

Sure, what do I know? I mainly do mortgage work, have to work for a few AMCs on occasion, go to houses and talk to homeowners and agents evryday, write reports from start to finish, etc. Hard to be as educated on the topic as appraisers who don't do any of those things .

they will hate the ones that speak the truth...ask mej

 

[chad hampton]

They made mej a martyr

 

[George Hatch]

Don't forget, the scumbag cuomo was about to go after the gses when it was clear they were in on the scam. When you're too big to fail, you can pretend to be innocent and buy your way out. It's the american way.

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?

 

[George Hatch]

Sure, what do I know? I mainly do mortgage work, have to work for a few AMCs on occasion, go to houses and talk to homeowners and agents evryday, write reports from start to finish, etc. Hard to be as educated on the topic as appraisers who don't do any of those things .

I don't know who you think you're talking to but - unlike you - I work full-time as an active appraiser. I never forgot how to ride a bike and I also never forgot how to appraise a house or write up a 1004. That my scope of practice is much wider than the one niche doesn't detract from my understanding of what you do. Aside from working for splits with an AMC, that is. Which BTW, is not exactly a flex.

 

[J Grant]

Two things can be true at once:

Loan originators can and sometimes do try to influence the outcome in order to cheat the lenders with whom they are doing business​

and​

Lenders can and and sometimes do cook their own books to do "justify" deals they shouldn't be doing.​

​

Cutting the LOs out of the loop only addresses that particular conflict of interest. It doesn't touch the lender-misconduct which also occured before and which continues to occur. Nor does cutting the LOs out imply some higher moral virtue to the conduct of the lenders - they're still doing what they were doing before. With that said and WRT the conflict of interest in allowing the sales types to control the appraisers, less is still less. Cutting the LOs out completely justified the damage to those LOs and their appraisers.

If you want to say the LOs (internal and external alike) were only doing 25% of the crime (!!!!) then that's still fine because 25% less is still 25% less and it still completely justifies the collateral damage to appraisers.

Your economic interests aren't worth the reversal. They never were. You were an afterthought at best, if at all.

The tiny amount less than the AMCs might have provided with respect to lender misconduct does not justify the collateral damage done to appraisers. That is ridiculous. For any small amount the AMCs might have discouraged direct pressure in value inflation, they wiped it out by allowing value inflation to continue for lenders by providing lenders with plausible deniability.

You are naive about the imagined amount of (crime) you think AMCs stopped. You admit you never personally did URAR lender work for an AMC. I have, prior to being able to get rid of them, and my expeirence with them mirrors the experience of many appraisers on this board, who have posted about how an AMC drops them from work if they dared to come in "low" on more than a rare occasion. The AMC's merely shifted the lender pressure to the back end instead of the front end.

If the AMCs stopped 5% of the lender pressure (being generous), that was a dog and pony show, because had a true round robin firewall been set up instead, it would have eliminated 90% or 100% of the pressure. But the stakeholders never really wanted to eliminate lender pressure. They just wanted to hide behind it via the AMC.

The fact that now a WAIVER allows the lender or borrower to estimate whatever property value makes the deal work is an ironic Coda to it all.

 

[J Grant]

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?

???? Did WAMU work through an AMC when they got caught? When did it happen?

If WAMU engaged a ton of volume for x years through an AMC and finally got caught, the AMC was useless at stopping them. Lenders get audited too. So if WAMU did not order through an AMC, they would have gotten caught as well as AMCs, so if Wells Fargo would have gotten caught anyway.

 

[George Hatch]

As I recall, the story is that NY State got complaints from appraisers about being pressured on WAMU deals via the MBs and by their AMC. The state looked into it, found the AMC paper trail and used those examples as leverage to investigate the GSE files for both the AMC and MB pressure. The GSEs entered into what amounted to a consent decree in order to resolve the complaint without further ado.

 

[J Grant]

As I recall, the story is that NY State got complaints from appraisers about being pressured on WAMU deals via the MBs and by their AMC. The state looked into it, found the AMC paper trail and used those examples as leverage to investigate the GSE files for both the AMC and MB pressure. The GSEs entered into what amounted to a consent decree in order to resolve the complaint without further ado.

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?

 

[glenn walker]

Some of you have really high opinions of the ethics and morals of “lenders”. Everybody who’s employed by a lender is by default on the sales side of things. Anybody in the process who scrutinizes deals too hard, will not be employed for too long. Credit analyst, underwriters, it doesn’t matter. They are all looking to do one thing and that is to push every loan through. Lipstick on a pig is the name of the game. Sometimes that job is difficult, but no one who gets a paycheck from a lender is in the business of saying no to loans.

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 ?

 

[J Grant]

My personal experience with lenders ( and some wholesalers ) is that a segment of them, and people who work for them, do care about appraisal value and will keep using an appraiser who might come in "low" with support - the euphemism of low is slang - either a MV was credibly supported or it was not. That is true of MV whether it came in low, high, or equivalent to whatever number or sale price gets the deal done.

I am aware that many lenders do not care about value unless it is so egregiously bad that it might expose them. I harp on AMC;s but to be fair, they are caught between a rock and a hard place . They have to keep their lender customer "happy," and that can mean very few "low " values. Yet the AMC can be subject to audit. It is the SYSTEM that stinks, which allows this conflict of interest for the AMC. In addition to the fee problems, of course.