Appraised Value Below Contract Price

[Calvin the Airedale]

Baloney.
..............

What part is baloney?

That state appraisal boards don't hold such views as to appraiser's contract review obligations?

or, That using the MV as a standard by which to judge the reasonableness of the contract price in not a valid analytical tool?

 

[Calvin the Airedale]

Cal,

don't forget, I'm still waiting for you to document that analyzing the contract requires forming and reporting an opinion of the contract price.

Whenever you're ready!

Dear Mr. Hurlock,

I owe you less than butkus.

 

[David Mescon]

Pardon me David, but any narrative complaining about the amount and source of our regulation might do well to remember that one of the reasons this profession exists in any numbers at all is because appraisals are required of lenders by regulation. If they were not, more than half our number would be retired or greeting shoppers at Walmart in the alternative.

Calvin, you're not serious are you? Governmental regulation is what has allowed the demand for appraisals to wane. Private investors and banks do not want to lose money, and, if they were actually held responsible for the loans they made, (remember when), this nonsense wouldn't be necessary.

 

[CANative]

There is NO requirement to comment or explain a difference between the opinion of value and some other benchmark such as a purchase contract. So you're argument that it is somehow a requirement goes right out the window.

You find me just ONE state board sanction record that specifically mentions not explaining the difference between contract price versus the opinion of value and I'll change my position.

For one thing if this was a hard requirement it would be viewed as compromising appraiser independence.

 

[Calvin the Airedale]

Calvin, you're not serious are you? Governmental regulation is what has allowed the demand for appraisals to wane. Private investors and banks do not want to lose money, and, if they were actually held responsible for the loans they made, (remember when), this nonsense wouldn't be necessary.

David, it would only take the redaction of a few paragraphs in less than a dozen or so CFR publications to make most appraisal jobs disappear into oblivion. Government regulation sustains this business more than inhibits it.

 

[Calvin the Airedale]

There is NO requirement to comment or explain a difference between the opinion of value and some other benchmark such as a purchase contract. So you're argument that it is somehow a requirement goes right out the window.

You find me just ONE state board sanction record that specifically mentions not explaining the difference between contract price versus the opinion of value and I'll change my position.

For one thing if this was a hard requirement it would be viewed as compromising appraiser independence.

Fine Can, you go about analyzing the SC as you like. But when the client asks you to reconcile the difference between the SP and MV, don't come crying to the forum about scope creep, or unreasonable underwriters, or any of this other nonsense from those complaining that the client only wants what USPAP says they are entitled to in the first place: an analysis of the sale agreement.

 

[CANative]

Calvin, this is just a discussion about what MUST be done (which I disagree with you) versus what SHOULD be done (which I agree with you.)

There is no requirement and such a requirement would open a can of worms which we don't want opened. But in these times when market trends are producing inefficient pricing we should explain better when there is a difference.

 

[gregb]

Requirement to analyze the purchase contract never includes reconciling the purchase contract with the appraised value.

Period.

 

[David Mescon]

David, it would only take the redaction of a few paragraphs in less than a dozen or so CFR publications to make most appraisal jobs disappear into oblivion. Government regulation sustains this business more than inhibits it.

Calvin, that would depend upon whether or not the folks actually lending the money were held responsible if the loans went south. If they were, you can bet each and every loan would require an appraisal. If not, (you know, like it is now, with taxpayers being the ones actually held responsible for all the bad paper), then yes, nobody lending money would actually care. In fact, when those making the loans know they won't be held responsible, (like it is now), they will fight tooth and nail for the right to utilize alternative methods of asset valuation.

 

[CANative]

Fine Can, you go about analyzing the SC as you like. But when the client asks you to reconcile the difference between the SP and MV, don't come crying to the forum about scope creep, or unreasonable underwriters, or any of this other nonsense from those complaining that the client only wants what USPAP says they are entitled to in the first place: an analysis of the sale agreement.

When have I ever done this? And scope creep is nothing more than AMCs competing with each other. Underwriters can be idiots but I know how to handle them.

And for the last time "analysis" does not require reconciling the opinion of value with a benchmark. Your point of view is colored from too much time on the dark side.