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Gao Report Released

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Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Steve:
The AI like every business and organization in this country is made up of American people. If the American People are crooked and immoral and they join the AI or whatever organization, it doesn’t seem fair to me to blame the organization because some of their members are crooks. These people acquired their values from American society and not from their employer or the organizations they belong to. Appraisers are normal human beings and given a choice they will take the path of least resistance. The path of least resistance is to be a number hitter because that is what the system is set up to allow. No appraiser goes out on an assignment with any intention of doing anything but coming up with the correct answer unless some one inserts pressure to do other wise. That is why I say all of this appraiser regulation crap is mis-directed. This is not an appraiser problem; it is a problem of crook clients who have the power. If they have the power to dictate the rules of the game and the government and regulators set up a system to let them get away with it, then whose problem is it? We appraisers are instruments of the regulatory system and if the system won’t back us up then the system can’t work. If you take every appraiser’s license the world will still be full of crooked clients with the power to corrupt the next crop of appraisers.
I have been working with an LO for about 16 years and the last couple of weeks he had worried the hell out of me over a duplex apartment house one of his buddies bought and remodeled. This all started because prices stopped going up and started going down. The purchaser repaired the fire damage and rented the units at about $100 above market rent and the LO wants me to appraise it at that rental rate. My dad owns rental property in that neighborhood and I have 15 years of his experience to back me up. Vacancy, lost rent, low quality tenants, etc. These tenants will agree to pay double market rent but you can’t collect it. The duplex house is like new but the adjoining neighborhood is in the boarded up stage and this adjoining neighborhood is on its way to extension. I walked through the bank this week and the LO asked me if I could go another $6,000? I said, “I tell you what. If you will give me a letter from this bank saying that you believe the market rent is $zzz and state that you will take full personal responsibility and absolve me of any responsibility I will do it. I thought that would put an end to it. The next day he said he had talked to the CEO and senior VP and they gave him permission to do it. I told him, “Man why in the hell do you guys bother with getting appraisals? Why don’t you just make the loan like you want to and leave me the hell out of it? He said, “We can’t do that.” This whole year has been like this all because the market is depressed and prices are actually going down and they just can’t understand it. There are times when I just want to say the hell with it. I enjoy appraising but the first opportunity I find to do something else I am out of here. If I hear one more time, “Well all the other banks and appraisers are doing it” I might just close the doors. There in lies the basic problem, “If we won’t do it some other bank and appraiser will” and they are exactly correct. "Why worry, inflation has always saved us. In a few years who will know the difference" or so they say. Now whose fault is that? It ain’t the AI’s fault, and it ain’t the appraiser’s fault, it is the failure of the regulatory process to set up a system that will work. The GAO missed the mark by a mile.
 
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