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Frankly Speaking

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Mike Simpson

Thread Starter
Senior Member
Joined
Jan 30, 2002
I'd like to predicate my following remarks by stating I do not believe that everyone in the lending & real estate community to be dishonest or self serving. To the contrary, I value my clients beyond illustration, and count among those clients many real estate agents. In fact I'm a licensed agent myself (currently inactive). However, it is painfully obvious to thousands of appraising professionals across the country that something needs to change regarding the current state of affairs that exist between these various industries.

As a former Home Inspector & Commercial Pest Control Consultant I can say with certainty that the same problem exists between that industry and some commission based experts. The following was an introduction given at a seminar I attended more than 10 years ago presented by Northwest Inspection Engineers, Inc. Among the speakers were 3 P.E.'s and a graduate of WSU w/a Bachelor of Architecture and a Bachelor of Science in Architectural Studies.

"Ingnorance is bliss. The old axiom holds true in the professions of real estate appraising and inspecting. If you don't know much, you can breeze by a lot of stuff without worrying about it. The more you know, the more you'll think about and the more problems you'll recognize. Each time you recognize a problem, you'll have to decide how to deal with it. The more problems you deal with, the more time it will take you. Other people involved with the transactions will become increasingly unhappy with you because you're causing problems. The will get angry with you, call you names, and threaten you. Some may become violent. You will get fewer and fewer appraisal jobs. You will slowly become isolated from society. Your life will become a living hell. But, by damn, YOU'LL BE RIGHT!"

"There will be a short pause for those of you who want to leave. There will be no refunds."

"For those of you who want to continue, there will be some compensations. You'll be better able to sort through the stories that owners, agents, contractors and lenders lay on you. You may become a little less vulnerable to lawsuits. Eventually, you may even have some impact on the way real estate transactions are made. Maybe transactions will come to be based more on hard information and less on rhetoric. Maybe we can even get to a point where a problem is "a problem" that is dealt with, rather than being ignored, covered up, or represented as "an outstanding opportunity for improvement."

These prophetic words were written more than 10 years ago, and yet here we are in a new millennium, and the problem appears to have gotten worse...much worse. There now exists an on-line petition with nearly 7,000 signatures requesting some type of reform. The petition has existed for years, yet nothing is done. Insurers of mortgages have eliminated the appraisal in lieu of a "transaction fee," citing the lending community we're all complaining about says; we're hitting the number every time. Real estate Brokers are even getting into the act--see letter to the Editor, Inman Realty News titled "Appraiser's are shooting themselves in the foot." It's ironic that the very professions which attack appraiser's for not "playing ball" turn around and attack appraisers when the do "play ball."

The answer to these problems certainly isn't flawed AVM's, or Businessmen/women driving around in Ferrari's who've reinvented the wheel (like one of our erstwhile competitors replying to an earlier post). The answer is simple, and always has been; give the appraiser some legislation that allow them to do their job incoerced and uncompromised.

-Mike
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
BRAVO!!

Encore!!

Send copies, no TAKE copies of this and related posts to your local State Banking Officials, to your state Congressmen and Representatives.

You might enclose a copy of what the average person still pays annually for the S&L closings :twisted:
 

Dale Smalley

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I disagree with your faith in the government coming to the rescue. How can more legislation solve your problem. This can only slow down the process and increase the number of usless forms like the Firrea addendum. Also we will have to increase the fees to compensate for the additional work. Higher fees and longer turnaround times will be a hard sell. Legislation is the simple answer but not the right one our issues are too complex lets keep the govt beurocrats out of this.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Dale:

In case you can't don't know, can't recall or remember: to a high degree it was legislation that got us INTO this mess!!!

Pre-licensing it was the responsibility of the lender to hire a responsible appraiser to do the work granted times have changed since the word ws hammered out on granite tablets, but some of the 'rooles' which led us to the present idiocies were the result of legislation!

Bank examiners USED to care, now even the SEC (a once proud and responsible oversight comittee) cannot weed out the crooks!

BUT THE PRESENT SYSTEM encourages(!) bad behavior!

hence my urging to awaken those who make the rooles :roll:
 

Mike Simpson

Thread Starter
Senior Member
Joined
Jan 30, 2002
Dale-

You a lender???

I'm not suggesting the government saddle the appraiser with anymore legislation. That's proved to be a failure. I just think blaming the appraiser for the problems that exist (past & present) is as rediculous as blaming the accountants for the terrible mess the stock markets been in. When commission based individuals control the weights & measures there's gonna be BIIIGGG problems. I can't believe no ones--at least no one in a position to do something--has figured this out yet. To a rational impartial thinker this issue is a no brainer!!!

What we'd all like to see is more accountability from the lending & real estate professionals. Afterall, that's were the very real problems lie. Take away (or make it painful) for a lender or agent to punish the ethical appraisal while rewarding the number hitter. We should be able to do our jobs without fear of punishment or retaliation.

Do you know what it feels like to do a good job and be kicked in the teeth by someone trying to perpetrate a scham on some unwitting borrower?. Do you know what it's like to have more than a decade of experience & education just to have an agent--or borrower who wants a new boat in the driveway--bash your reputation & credibility for doing your job? Do you know what its like to complete a job & have your fee withheld because you failed to hit someones predetermined value estimate? Most of us do, and so do the six thousand, seven hundred some odd people signing the petition on this website.

Providing protection to, and enabling appraisers to do the job they are meant to do for the good of the public will not raise fees, increase work, or increase forms!!! To the contrary--I think it could actually speed up the process. Granted, it may cost an unethical lender a few loans they probably shouldn't be making, or cause a dishonest agent to work a little harder for than yearly trip to Maui.

Personally I don't view FIRREA as useless. It was created for the public good, and needs to be enforced, and lenders & agents need to be held to the same standards as the appraiser's & inspector's.

-Mike
 
Joined
Jan 16, 2002
The "powers that be" don't really want to reform the system. I believe this sytem we are working in was designed from the start to be exactly like it is. The appraisal profession was started as a front for Realtors (yes, the trade mark people) in conjunction with the bankers - if noboby believes this, check the history books. Guess who once owned the Appraisal Institute, until the cozy relationship became an embarassment ?
Now, if we really want to reform this corrupt system, we don't start at the end of the "pipeline" with the appraisers (although appraisers do need serious reform), you start at the begining, namely with pandering, corrupt Realtors (and all others like them). Then you reform the crooked bankers, mortgage brokers, and the feds. After your done with them, you can start in on the appraisers.

Having said all of this, none of it will ever happen. The entire system is so corrupt that it would have to be totally dismantled, and nobody is willing to do that.
 

Dale Smalley

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Mike
I am an appraiser that works for a lender (don't we all) This company buys loans. I am the one who is accountable for the accuracy of the values. My performance is charted and graded and shoved back into my face once a year. Lender accountability is all about the numbers and its profits for the investors and buying overvalued loans is just not good business. A good review policy will weed out the fakers and inflated values. If the lenders dont fund the bad loans then it will get back to those doing bad appraisals. If the LO is stuck with a loan he cant sell they will think twice about it the next time.
 

Frank Bertrand

Junior Member
Joined
Aug 21, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
best way to avoid LO's UW's and all their headaches and problems is diversity. I realize that that concept is not practical for many who specialize in city or suburbs, but I kind of like my 33-33-33 split between banks, avms and guvmint.
 
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