Give appraisers their integrity back.

[Katalin Farkas]

News
H.R. 3837, the Escrow, Appraisal and Mortgage Servicing Improvement Act Approved by Financial Services Committee
The House Financial Services Committee approved H.R. 3837, the Escrow, Appraisal and Mortgage Servicing Improvements Act, today. The legislation bans improperly pressuring appraisers to reach value, strengthens the appraisal regulatory structure and recognizes the importance of professional designations when selecting an appraiser, among other things.

The only amendment attached to the bill was offered by Congresswoman Gwen Moore (D-WI), who is an original co-sponsor. Her amendment includes Appraisal Management Companies among those entities forbidden to pressure appraisers and also requires Appraisal Management Company employees who review appraisals, to be properly licensed.

Representative Moore proclaimed that this bill would help give appraisers their integrity back.

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[TXCBoy36]

I am curious to see how this all turns out....good or bad?? I have not decided yet!

JC

 

[Roger R. Patzold]

The only appraisers who need their integrity given back are those who gave it away to begin with.

I understand the pressure a new appraiser can be under with bills due but when you bow to those pressures it is your integrity you are putting on the line. They are not taking it you are giving it.

No one is free from those type of pressures, it just comes in different forms.

May God bless and keep one and all during this most joyous of seasons.<><

 

[hastalavista]

Representative Moore proclaimed that this bill would help give appraisers their integrity back.

I appreciate the gentle-lady's sentiment.
However, I (and many of the rest of us) haven't lost our integrity.
I think it was appropriate (but unnecessary) to specifically identify AMCs as being prohibited from pressuring appraisers.
But I'm against giving them any type of official recognition period, since I see it as a step closer to being regulated, and once they are regulated, they are never going to go away!

I'm against forcing any user to only have reviews done by appeasers, but I suppose the critical part is how the bill defines "review" (one of my clients who heads up the risk-department at a good size bank is not an appraiser, but he can review a report and knows USPAP as well if not better than anyone else I know-including me!!). And I don't understand why AMCs only were targeted for this requirement?

 

[tjcou812]

The bill should go farther with stronger language about asking for comp checks, value checks etc before they assign you an order. That there will be fines and possible jail time until this happens nothing will change. This is also for all those appraiser who do comp checks as well. Revolk their licenses. I know this would be hard to enforce but when banks, lenders appraisers etc. start getting fined, jailed or lose their licenses things will change. They can write and enact all the bills into laws but untill they start enforcing them like I said nothing will change.

 

[Doug Wegener]

Whats the penalty?

News
H.R. 3837, the Escrow, Appraisal and Mortgage Servicing Improvement Act Approved by Financial Services Committee
The House Financial Services Committee approved H.R. 3837, the Escrow, Appraisal and Mortgage Servicing Improvements Act, today. The legislation bans improperly pressuring appraisers to reach value, strengthens the appraisal regulatory structure and recognizes the importance of professional designations when selecting an appraiser, among other things.

The only amendment attached to the bill was offered by Congresswoman Gwen Moore (D-WI), who is an original co-sponsor. Her amendment includes Appraisal Management Companies among those entities forbidden to pressure appraisers and also requires Appraisal Management Company employees who review appraisals, to be properly licensed.

Representative Moore proclaimed that this bill would help give appraisers their integrity back.

Find

What is the penalty for pressuring an appraiser?

 

[Marcia Langley]

I'm against forcing any user to only have reviews done by appeasers,

Denis ... can't argue with that!!!!

 

[Marcia Langley]

I think it was appropriate (but unnecessary) to specifically identify AMCs as being prohibited from pressuring appraisers.

I'm against forcing any user to only have reviews done by appeasers, but I suppose the critical part is how the bill defines "review"

Denis,

It is sort of interesting that Congresswoman Moore's amendment highlights the fact that AMCs are both buyers and sellers of appraisals.

From the point of view of Cuomo's suit, AMCs are "appraisal companies". From the point of view of appraisers AMCs are "lender's agents".

I think your fear that the role of AMCs will be codified by the rush to legislate is well founded. I have the same fear but am beginning to see it as inevitable.

As far as requiring in house reviewers to become licensed appraisers, I don't see how that would change much. I can see from Ms. Moore's point of view it may hold the promise that rviewers would all become more like your risk department head client.

Of course the reality is that in house reviewers (whether appraisers or not) are subject to intense pressure themselves.

Overall, though, I am still waiting for that bill or amendment that removes appraiser selection and ordering from commissioned participants. Including the commissions earned by AMCs.

 

[Pamela Crowley (Florida)]

I appreciate the gentle-lady's sentiment.
However, I (and many of the rest of us) haven't lost our integrity.
I think it was appropriate (but unnecessary) to specifically identify AMCs as being prohibited from pressuring appraisers.
But I'm against giving them any type of official recognition period, since I see it as a step closer to being regulated, and once they are regulated, they are never going to go away!

Agree! I just want them dead, dead, dead. Regulating AMCs will work as well as licensing appraisers has...

 

[hastalavista]

Agree! I just want them dead, dead, dead. Regulating AMCs will work as well as licensing appraisers has...

I think your fear that the role of AMCs will be codified by the rush to legislate is well founded. I have the same fear but am beginning to see it as inevitable.

I think we are at a tipping point as far as the AMCs go as they currently operate. Few know better than Pam the many sordid details (although I understand another shoe may be dropping soon... we'll have to stay tuned to see if it develops :icon_wink. It is the rush to legislation that you mention, Marcia, that I fear more than anything else. I agree with Ronald Regan's comment that one of the most frightening things to hear is someone from the government saying, "We're here to help you!" :laugh: . So, I say that about Congresswoman Moore's bill; I appreciate the attention it is creating but I have a fear that the cure to the illness may make me sick!

What I would like to see is this:
A. Regulators (such as the SEC is doing now) review FRIs internal operating procedures. FDIC,OTS, etc., can do this on a regular basis and can also do this any time they want.

B. If the system reveals de facto appraiser-pressure that degrades the integrity of the process (be that "systematic" as Wamu claims it is not, or non-systematic such as in an unorganized [non-systematic] but prevalent practice anyway), they should fine the FRIs a fee that can be linked to the total cost of the AMCs annual expense.

C. Never give the AMCs regulatory standing. Keep the regulatory focus on the FRIs. AMCs can come and go and are dependent on the FRIs/Lenders for their business, so like the Hydra, cutting one down may result in two more popping up! We've seen how AMCs can be pressured by clients to lower quality standards. I think the same dynamic can work (and work better than direct regulation) to improve quality standards but that pressure has to come from the client (a bank or regulated lender).

Under The Denis Plan, the lenders would have every incentive to choose a quality provider and the AMCs would have every incentive to provide quality work. The entire reason for having an AMC (eliminate internal overheard and create a firewall between loan origination and property valuation) would be restored. The AMCs would still be able to compete on fee (sorry, guys, that's never going away; just as we compete on fees) but they would also compete with the quality they provide- and I think it is fair to say (despite what I hear from some AMC management personnel) that there is a relationship between higher fees and higher quality work- shame on the AMCs if they haven't taken the time to be selective in who they use: the truth is there's been no incentive to be selective based on quality (that's the problem!); the AMCs can't find it if they don't look for it.

So, that's my grand plan. Regardless how this plays out, in the end, I think things will be better!