Appraiser Full Employment Act ?

[Mike Boyd]

The ONLY cure is to take the appraiser selection and ordering completely away from ANYBODY or ANY COMPANY that is involved in the transaction.[/QUOTE
]

........which should include AMCs. An AMC that does not result in providing consistent usable (by the broker) appraisal reports will get the same treatment.....loss of contract. So, the temptation for the AMC is equal to that of the individual appraiser. I agree that the assignment process must be taken away from all who currently choose the appraiser to a truly independant source that uses a rotation system from a national list.

 

[Michael Tipton]

This bill is not just about FHA, it also increases the loan limits for FNMA and FHLMC. Starts on page 96 HR 3221.

http://www.house.gov/apps/list/press/financialsvcs_dem/hr3221_bill_text.pdf

 

[Gregory Beck]

I agree that the assignment process must be taken away from all who currently choose the appraiser to a truly independant source that uses a rotation system from a national list.

The only problem I see with that is Who sets the fees? or does it become a national bidding war on appraisal fees I'm not allowed to solicite any business just get on a Nat'l List? I don't know about that.

 

[Tim The Enchanter]

Also how does a rotating list eliminate the incompetent?
It seems like it would just ensure they get work.

 

[Metamorphic]

The only problem I see with that is Who sets the fees? or does it become a national bidding war on appraisal fees I'm not allowed to solicite any business just get on a Nat'l List? I don't know about that.

Any kind of rotation system that ties the lender to a particular appraiser for an assignment will necessarily have to have some sort of fixed fee schedule. Other wise here's what you'd have.

Lenders will compare notes and compile a list on which appraisers will work with you and which wont. When they draw the honest appraiser, and he quotes his fee of $1 it will be "too high". But when the ***** appraiser comes up in the lottery his fee of "One billion dollars" will be fine.

 

[c w d]

Also how does a rotating list eliminate the incompetent?
It seems like it would just ensure they get work.

What is the point of this incompetency argument against the rotation system? Everytime someone brings it up someone else points out that the incompetent will be protected from purging.

Are the incompetent appraising now? Are you losing work to incompetents who are willing to hit the target value? Are you being out bid by incompetents? Does the current system adequately purge the incompetent? If you answered Yes, Yes, Yes, No, then <removed>. No system is going to be perfect but a rotation system has got to be better than this.

Edit: Sorry for being belligerent.

 

[Mystery man3]

The ONLY cure is to take the appraiser selection and ordering completely away from ANYBODY or ANY COMPANY that is involved in the transaction.

I disagree that is the only way Pam.

An alternative is to make the person who is actually ordering the appraisal have a signifigant stake in whether the loan is paid back or not (he takes a signifigant loss if the loan defaults).

Or you could bond appraisers so that the appraiser would lose a signifigant amount of money if he was caught inflating values (he can get sued for his bond if he inflates appraisals).


By doing either of these two things you would be working with human nature and altering the cost to benefit analysis to encourage accurate appraisals.

 

[Riick]

I disagree that is the only way Pam.

(1) An alternative is to make the person who is actually ordering the appraisal have a significant stake in whether the loan is paid back or not (he takes a significant loss if the loan defaults).

(2) Or you could bond appraisers so that the appraiser would lose a significant amount of money if he was caught inflating values (he can get sued for his bond if he inflates appraisals). .....

My add of #s

--Ignoring whether or not the appraiser significantly over-valued the property --

(1) The $12/hr clerk who orders appraisals has no significant assets, nor would your typical MBroker; Who's on the hook?
As long as the Lenders can sell-off the loan and wash their hands of it ... no joy.
Perhaps if their commission did not come 100% at the front-end, but was paid-out over a 5-year period??
((Insurance agents -for example- participate in income from a sale on a long-term basis and thus rewarded for selling something valuable the Buyer will KEEP paying for.))

(2) E&O insurance already exists; why add the extra cost burden of a Bond?
Oh... because if it's not an ERROR or OMISSION, then the mortgagee has proven their case.
Well, if the Lender wants to increase fees to cover the additional cost + a profit .....somewhere on the order of ?? $50 - $100 each ??

 

[c w d]

No system that is employed is going to be perfect. We must recognize and accept this. What we must do first is identify which is the greater threat our wellbeing and future prosperity? Unethical appraisers or incompetent appraisers? We are never going to employ a system that minimizes both. It's never going to happen. Even if we designed a system that was perfect those with the powers to implement it are going to break it. We need, as a whole, to decide on which constitutes the greater threat. Then we need to focus our collective will on the greater of the two evils. Personally, I think it's the unethical. We cannot compete with someone who willingly breaks the rules as needed to impress their clients. We can compete with incompetent appraisers. Implement a rotation system that minimizes a client's ability to pick and chose at their whim which appraisers who are unethical, that they know to be unethical. Implement adequate peer review and the incompetent will be carried out to the curb with the unethical. As it stands now we have a system that rewards both the unethical AND incompetent and penalizes the ethical competent appraiser. How can a rotation make things worse?