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Appraisers Ruining the Profession

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Ghost Rider

Thread Starter
Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
I was starting to respond to a post regarding Wells Fargo's new guidelines and their decision to cut LTVs in declining markets, and decided this needed to be a thread of it's own......

To many of the appraisers on this forum, you all NEED to get off your horse for a bit, and understand what is going on in the lending industry in this cycle. We have seen unbelievable excess over the past 5+ years, and now the building is crashing down upon itself. EVERYONE is going to get blamed. Mortgage Brokers, Lenders, Fannie, Appraisers, Borrowers, and there is plenty of blame to go around.

My problem is with many on this board who maintain this attitude that the appraiser is some sort of god is just wrong. Some examples:

"My broker said that a Wells Fargo AE said to mark the stable box so my LTV won't get cut, and I'm gonna report Wells Fargo to everyone in the world and the entire bank should be sanctioned (I'm paraphrasing)" :new_Eyecrazy:

Seriously - I've seen a few HUNDRED threads on this board where no one here would take the word of a Broker when they give you an UW stip - Why in the hell would you believe them when they tell you an AE said something? MOST AEs for the major lenders are very professional individuals, and get whats going on. I'm not saying there are bad apples, but thats not a reason to sanction a bank. Also, do yourself a favor, and stop before filing a complaint with the state - You have no proof, and it looks kinda dumb to have an appraiser waving an order form from a broker saying "Wells Fargo said this", when WF did nothing, a broker did.

Appraisers are just one cog in the machine that is the mortgage lending world. Many lenders have been/were working to eliminate the appraiser from the equation. Why? Before anyone thinks this is a conspiracy theory, or a way to get more loans done, it wasn't that. It was a way of funding loans faster, and creating more automation in the system. It was also a way of trying to eliminate the "human error" of the decision. Frankly, there are a LOT of really bad appraisers out there and there are some really bad ones on this board also (I won't mention names, but I've seen plenty of appraisals come across my desk signed by people who post here regularly, and they are really REALLY bad). Even with the best appraiser, they make mistakes. From a lenders perspective, if they can eliminate the mistake with the use of technology (read, AVMs), they are going to do it. Personally, I think AVMs when not run by appraisers are of very poor quality, but trust me when I tell you the technology is out there for appraisers to do "automated" appraisals of very good quality.

The problem is, especially on this board, appraisers typically don't see that they are a part of a larger puzzle, a piece of the picture, not the entire picture. Many appraisers on this board seem to want appraisers to be the only part of the lending decision, and to make guidelines as to how loans are done. How many here have posted that doing high LTV (95% and higher) loans were stupid? Point in fact, thats not your call as AN APPRAISER to make. You want to make that call, go work for a bank/lender and try to move guidelines. In many cases, doing high LTV loans are good business decisions. Borrowers with good job history, credit scores, lots of reserves, etc.. Yes, the industry went too far, but thats not part of the appraisal decision, and many here seem to think it should be.

My main point of this is simple - As an appraiser, don't get too tied up in the back end of the industry. It's not worth it, and it's not your job. And when you do get into arguing over LTV, and whats good for the lending industry, most lenders kinda laugh, and move on because most appraisers have no clue what goes on in the LENDING industry, and the statements made are silly.
 

DTB

Elite Member
Joined
Jun 11, 2004
Professional Status
Certified Residential Appraiser
State
Illinois
.

Appraisers are just one cog in the machine that is the mortgage lending world. Many lenders have been/were working to eliminate the appraiser from the equation. Why? Before anyone thinks this is a conspiracy theory, or a way to get more loans done, it wasn't that. It was a way of funding loans faster, and creating more automation in the system. It was also a way of trying to eliminate the "human error" of the decision.

An oil pump is also only a small cog in the 700HP engines I build for fun. It probably would be cheaper and I could get done a little quicker if I left that small cog out. Especially as I have witnessed a few oil pumps that were junk from the factory. Nah, I just switched suppliers and spend a few extra minutes and $$ to build the best I can.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Speaking of "HIGH HORSES". Which one are You Riding?

Ghost Rider

"From a lenders perspective, if they can eliminate the mistake with the use of technology (read, AVMs), they are going to do it. Personally, I think AVMs when not run by appraisers are of very poor quality, but trust me when I tell you the technology is out there for appraisers to do "automated" appraisals of very good quality.


YOU BETCHA......just like this AVM >>>>> :leeann:

http://appraisersforum.com/showthread.php?t=134986

"the statements made are silly". Yes - you proved SOME really ARE.

Which "horse" do you ride? :shrug:
 

J in Florida

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I know for a FACT as I have personally witnessed AE's coach loan originators in how to package a file together to get it past underwriting. "We need the file to show...(nod nod, wink wink)". Numerous times. Countless times. I have been told by many loan originators, a couple of them family members, that AE's routinely coach them how to manufacture files to get past underwriting, including jerking with the appraisals. If anyone says it does not happen regularly, rather than rarely, they just have no idea what the are talking about or are deliberately lying.

So long as the lending industry pays these people on production, and does practically NOTHING to those that dummy up files, it will be rampant.

MB's and loan originators are widely known as complete and total liars. They are paid very well to be very good liars. That may be why we pretty much don't believe most anything they say. Since we can't afford to trust or believe anything they say, sometime we have to form our own opinions.
 

Kevin Mc

Elite Member
Joined
Jun 7, 2004
Professional Status
Certified Residential Appraiser
State
New York
Frankly, there are a LOT of really bad appraisers out there and there are some really bad ones on this board also (I won't mention names, but I've seen plenty of appraisals come across my desk signed by people who post here regularly, and they are really REALLY bad). Even with the best appraiser, they make mistakes.

No doubt, appraisers make mistakes. I will say the majority of your appraisals in my area are ordered through an AMC. I know some of the folks who are in fact doing your appraisals. They are marginal appraisers at best. They are doing them for a minimum $100 less than my local market pays. There are also trainees involved but that isn't my business, it is yours.


How many here have posted that doing high LTV (95% and higher) loans were stupid? Point in fact, thats not your call as AN APPRAISER to make. y.

That is true, it is not our call. Truth be told I rarely if ever know the LTV of my appraisals and frankly don't care. I will say on the surface, 95% LTV loans and 100% and 106% and ARMS and teaser rates and I/O loans all appear to be fairly risky stuff. Stupid me, I actually put down 25% when I bought my home, who knew? Be that as it may, you are right it is none of our business how your lend money. Of course if you are doing a balls to the wall refinance and need a little bump in the value to make that 95% loan work, save the phone call because how I appraise real property is none of your business.
 

Kevin Mc

Elite Member
Joined
Jun 7, 2004
Professional Status
Certified Residential Appraiser
State
New York
Ditto.

I know for a FACT as I have personally witnessed AE's coach loan originators in how to package a file together to get it past underwriting. "We need the file to show...(nod nod, wink wink)". Numerous times. Countless times.

I have had the same conversations although never with a WF AE. Don't DARE tell me it doesn't or hasn't happened, I have the e-mails and phone conferences to back it up.
 
Last edited:

The Dog

Senior Member
Joined
Apr 18, 2005
Professional Status
Certified General Appraiser
State
Oregon
I think Ghostrider has some valid points. It ties in with a post I did a couple days ago

http://appraisersforum.com/showthread.php?t=134914

We as appraisers have to add value to a transactions, or we are not needed. I think most residential lending could be done more efficient on a credit worthiness model and statistical analysis. Heck, I can get financing for a $70,000 car in a couple hours max, but a $20,000 credit line takes weeks.

Think about it. We as appraisers need to rethink some of our attitudes. The general feeling in the banking industry is that most don't want us. That is hard to overcome. And I worked in banking before this field.
 

Frederick

Senior Member
Joined
Nov 2, 2005
Professional Status
Certified General Appraiser
State
New Jersey
Frankly, there are a LOT of really bad appraisers out there and there are some really bad ones on this board also (I won't mention names, but I've seen plenty of appraisals come across my desk signed by people who post here regularly, and they are really REALLY bad).

Wells Fargo via RELS does not pay for good. They pay for cheap and fast. When you go to McDonalds don't expect aged beef ala, Smith and Wolinski.

Bad appraisers and sloppy appraisers have been cultivated and nurtured by a system you designed that rewards fast and cheap and has no tolerance for anything else.

Clearly we are all now seeing the results of the almighty brain trust that runs our nation's banking/mortgage industry. You are the engine that pulls the train that has all of us in tow. You have the gold.....or did, and you made the rules. Its your mess. I sure hope you can clean it up yourself without the taxpayer having to.
 

Green Hornet

Senior Member
Joined
Dec 29, 2006
Professional Status
Certified Residential Appraiser
State
Washington
Originally posted by Ghost Rider
"but trust me when I tell you the technology is out there for appraisers to do "automated" appraisals of very good quality."


Ghost,

Please provide some additional information re the techology you note above. Who is developing it and for what purpose? Is it already being used and is it available to the independent fee appraiser?

As you are an AF Addict I suspect that you know that many on this forum are qualified to speak about the lending industry outside of the appraisal "cog". So please do not lump everyone into the same pile.

I think that many of the posts to which you refer are a result of frustration. Frustration caused by the feeling that everything that we do is reviewed and questioned, often by people who are not qualified or competent to do so. At the same time, it appears, that every other cog in the machine can get away with any activity so long as it makes money.

We, appraisers, are supposed to be the unbiased cog, but instead of being respected for that, we are demonized and presented as the speed bump in the process. A process that, at times, should be slowed down. It is one of the largest financial decisions that most people will make.

It is my opinion that much of what the market is currenlty going through could have been avoided with a slower process and more time for both the borrower and the lender to consider the long term results of the deal. Not just the short term financial gain.

My 2 cents on a Sunday morning.


Thanks.
 

Offshore

Senior Member
Joined
Dec 25, 2005
Professional Status
Certified Residential Appraiser
State
North Carolina
Why the anger? Maybe Ghost Rider is being forced to buy back some loans?
 
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