AQB's latest dumbing down by 'Stakeholders' Dropping the College Degree Requirement

[DWiley]

Critical thinking and problem solving skills which are essential do not come either appraisal education or supervised experience. I think I might argue that you are born with these skills. Others may say that these skills are developed through high school and college education. More specifically math and science education.

Or, a good SA could provide that while the trainee tackles real-world problems. The elephant in the room with regard to supervisory appraisers is that it is in supervisors' best immediate economic interest to provide the trainee just enough knowledge so that trainee can produce a document that looks like a legitimate appraisal report and produce revenue. Hence, we have the "adjustments lists" that a large number never seem to move way from and toward actual data-supported adjustments. If one views training folks as a way to grow a business, then long term interests may prevail, and there is real training, but how often is that really the case?

 

[TerryRohrer]

Contemplate this thread with the arguements for writing off student loan debt as student loan debt continues to skyrocket because it is free and no effort need be applied to "earn" anything and it becomes apparent we are on the road to sh*thole country status for the good old USA.

 

[George Hatch]

The current laws "give" a huge perk to the lenders ( free of cost to them AMC service ) and give a huge market share advantage to the AM< C's by the split fee, allowing them to offer free of hard cost service to lenders (I an aware the lender sends a pass-through payment to the AMC which comes from what the borrower paid for the appraisal, that i snot a hard cost to the lender ).

If two restaurants were serving similar food in the area, and one was free , and the other charged for a meal, which would you go to ? That is the kind of market share advantage the HUD fee split sees the AMCs get from gov regs, and that is why, regardless of how many appraisers are in an area. S/D does not normally work in the AMC realm vs. the non-AMC/private sector realm. Of course, fewer appraisers might see higher fees in all areas of appraising.

Of course, nothing is ever free - the AMC compensation comes from seeing appraisers get paid far less for an AMC assignment with their part of the appraisal fee going to the AMC, and in teh case of a restaurant, the "free" meal to customers might be paid for a govt perk to that restaurant that sees them pay far below min wage to employees and outsourced and expired food free of cost to serve -

The laws don't give anything to anyone. That's not how laws work. Thinking otherwise is a factual error.

 

[Carnivore]

To answer ZoE's the above question: The Two entities were AI & McKissock. for PAREA. This set up would certainly invite competition down the road.

Was this a Good Concept? I am not sure. If you compare it to the prior educational steps in most states this 1PAR EA concept would not fill the up-coming decline who quit or ARE retiring of current appraisers with new incoming appraisers. That's assuming ALL states adopted PAREA. which they did not.

I never thought this excess production of new appraisers was meant to keep fee's low was a good idea.

 

[J Grant]

There's never been a housing crash due to inept valuations and the next one will be no different. My guess is the next one will be just like the last one...the lenders gave close to 100% loans to marginally or unqualified borrowers, prices dropped, and millions of people were instantly underwater. Borrowers walked away leaving taxpayers holding the bag, thanks to F/F. If the deadbeats would honor their obligations and make the mortgage payments, there would never be a housing crash.

I recently sold my late Mom's house in Pt. Charlotte FL. $265K sales price, FHA. The estate paid about $10K in concessions, the buyer got a second lien for about $12K or so for their down payment, this lender charged nearly $5K in fees, etc. Bottom line is the borrower had $280K in loans to buy the $265K house and had a total of $1,500 out of pocket to buy the house. Borrowers were $15K underwater the day they closed. Prices are falling in that area and they are now about $30K under. Classic case of no-skin-in-the-game, too easy to walk away. This kind of silly crap causes housing crashes.



Its called "dynamic pricing", the model used in the hotel and airline industry. Perfect example of supply and demand.

Not long ago, on this forum, some appraisers were bragging about getting $750 - $1,000 for a simple residential report due to the demand for the low interest loans and 'shortage' of appraisers. I'm thinking some of these same people are now the ones crying about the waivers and AVMs. Gouging clients when business is booming is not a good business model for longevity. Clients will and have found alternatives.

I can tell you that from my experience wereh I reviewed a good many appraisals post crash ( field reviews of over 300 appraisall over 2 plus years ) that many of these appraisals were over valued. That is in addition to the exotic loans and predatory lending that you mention. The loans with 125% LTV and teaser rates etc paid a huge part, but over valauiotn of some properties by cerratin appraiser played a role as well....

Remember multiple flip sales and same-day assignment of contracts at a closing, where 40k was added to the price? Remember sky-high refinances, where the buyers later did a "strategic default"?

The present lending regulations deny lenders the means for the kind of no doc, no income loans and teaser rates etc so lenders and fannie and Freddie loosened standards on valuation to compensate to get more deals closed - appraisal waivers/value acceptance which eliminates an appraisal and allows the lender to write in their own value estimate as the property value in a refi and the sale price to be the property value in a purchase ( as long as it falls in the FF AVM range) , allowing CDC collectors to inspect instead of the appraisers

We also are seeing some loosening of credit and other requirements in lending as mortgage lenders struggle to get business -

 

[J Grant]

The laws don't give anything to anyone. That's not how laws work. Thinking otherwise is a factual error.

But these laws in affect DO give the AMC a huge market share advantage. I just explained how it works - it allows the A<Cs a huge market share because they can give free-of-hard-cost AMC service to the lender on the backs of the appraiser, via the HUD bundled fee.

True or not, yes or no? The HUD allows a fee split off the borwoer paid appraisal fee to compensate the AMC and the AMC thus can offer free of hard cost to their lender customers. Tell me about other businesses that due to this kind of govt largesse of regulation lets those businesses offer free-of-cost service to customers.


The lack of the ability of the consumer or the loan officer to hire the appraiser is unique to mortgage taxpayer-backed loans and greatly imbalances the supply/demand dynamic with such few channels of demand, compared to nonlender appraisal work, or other businesses where thousands of consumers, anyone in fact, can order and hire - that is normal S/D

And not to head off any spring false charges I am not advocating the loan officer or consumer order the appaisl in lending.I am explaining how it works to narrow the demand .

 

[ucbruin]

Everyone wants supply and demand free market capitalism....
Best system in the world....
Until they're no longer in demand....

 

[George Hatch]

But these laws in affect DO give the AMC a huge market share advantage. I just explained how it works - it allows the A<Cs a huge market share because they can give free-of-hard-cost AMC service to the lender on the backs of the appraiser, via the HUD bundled fee.

True or not, yes or no? The HUD allows a fee split off the borwoer paid appraisal fee to compensate the AMC and the AMC thus can offer free of hard cost to their lender customers. Tell me about other businesses that due to this kind of govt largesse of regulation lets those businesses offer free-of-cost service to customers.


The lack of the ability of the consumer or the loan officer to hire the appraiser is unique to mortgage taxpayer-backed loans and greatly imbalances the supply/demand dynamic with such few channels of demand, compared to nonlender appraisal work, or other businesses where thousands of consumers, anyone in fact, can order and hire - that is normal S/D

And not to head off any spring false charges I am not advocating the loan officer or consumer order the appaisl in lending.I am explaining how it works to narrow the demand .

Nope. The law still didn't give anything to anyone. You're not in objection to what the law prohibits, but rather what it doesn't prohibit. Your real objection is that the law didn't go far enough by including even more prohibitions.

 

[Surf Cat]

So what happens when they get it wrong and there is another housing crash due to these inept valuations?

Why, the tax payer foots the bill of course.

Who was held responsible for the housing crash of the Great Recession? Who went to prison for the sub-prime mortgage debacle? Lenders? Government officials whom failed to regulate the financial institutions?

It was the appraiser's fault...

https://www.google.com/amp/s/www.businessinsider.com/youre-all-wrong-blame-the-appraisers-for-the-mortgage-crisis-2010-4%3famp

 

[Joe Flacco]

Or, a good SA could provide that while the trainee tackles real-world problems. The elephant in the room with regard to supervisory appraisers is that it is in supervisors' best immediate economic interest to provide the trainee just enough knowledge so that trainee can produce a document that looks like a legitimate appraisal report and produce revenue. Hence, we have the "adjustments lists" that a large number never seem to move way from and toward actual data-supported adjustments. If one views training folks as a way to grow a business, then long term interests may prevail, and there is real training, but how often is that really the case?

That's why supervised experience model as it exists today is a massive failure. Supervising is not feasible for the "Good SA".