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Have the Rules of Engagement become a Departure Procedure

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J. Parker Graham

Thread Starter
Freshman Member
Joined
Jan 19, 2002
Do you receive unwanted and unsolicited appraisal request from unknown
lenders ? Do these requests appear with out prior warning. Has the sub-prime market gone thru all of their approved appraisers to the point where new talent is needed ? Why are the appraisal fee's in the basement ?

Has the sub-prime market become so bold and so widespread that it is now instructing appraisers how to perform FHA ? USPAP is relaced with the must have, and need to have subject value. The 4150.2 section 5-1 of the Transmittal Handbook for the U.S. Department of Housing and Urban Development very clearly describes the form, format, and all addendums required. I have not found where the Transmittal states drop all addendums from your report and begin using the FNMA 2055.

Will the sub-prime become our prime-time method of real estate valuation ? Mortgage Companies working in concert with chosen appraisers could very well make it so. These companies exist because some of us service their appraisal needs and the companies fill a need for - not ready for conventional lender borrowers.

But in the mean time, call me conventional only, Do you ever wonder who you are working for ?

Living Large in Detroit

J. Parker Graham
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Living Large
point is well taken, in the course of work I have run into several appraisers who state they love doing 2055's cause they can fly thru them. I couldn't understand what they were leaving out, until one day I asked and they told. Couldn't believe they were/are under some impression they can automatically leave out what is required :roll: and these are folks with several years or more experience 8O .
I don't remember when FNMA, HUD, and/or Congress lifted the requirements instituted under Title XI - but if someone can inform me of the specific date this happened, I'll conform. Until that time, we are required to abide by the "Law" the way it stands; anyone who elects to tempt fate is more than welcome to and we'll wish them well.
With the effects of 9/11 now comming home to roost, we'll begin to see who's made of what in this business and in the Lending Industry, as the pages start to turn.

8)
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Jtrotta: Actually, if you read Title 11 carefully, regulated banks don’t have to comply with appraisals regulations under certain conditions. If a regulated bank has a written appraisal policy setting forth their appraisal policies, stating that they are requiring appraisals only as an abundance of caution, and name an appraiser in whom they have confidence, they can hire this named person to do appraisals if he happens to be the bank janitor.
I do a lot of work for a commercial bank and when I decided not to renew my NC appraiser license they said, “we don’t care. You can send in your Virginia license if you want to. Under our appraiser policy you are the appraiser." We hashed over this for years. I would go to a state law class or a standards class and they would tell me what all had to be done under USPAP. I would go back and tell the bank what had to be done. They would pull out a letter from the State Bankers Association confirming their position. I told the then chairman of the State Appraisal Board about this letter and he said no way. I told the bank and they said, tell him to call the Federal Reserve Bank and let them tell him. It is right there in Title XI in black and white. This came up again at the last state law class and somebody pointed it out to the instructor. Remember the Golden Rule: “He who owns the gold makes the rules.”
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Austin;
you may be correct, and it is the banks rules that they go by, but if something goes wrong and the Bank fails, they are then bound by Federal Law to be in compliance with those regulations. If they opt out, there is no relief - they own the sole responsibility for the debt. In 90-97 many banks failed, I know one Banker that cannot be involved in the banking industry any longer; I didn't make it a practice to check out every failed institution, but that tells me what can happen.
hey look at our industry, the Laws are in place and many people elect not to follow them, but when they get caught there is no relief, your responsible and accountable.

8)
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Jt: I started appraising for this bank in 1986, a year in which they lost about 25% of their NOI to bad real estate loans. Since 1986, they have not lost one dime, they have one of the highest earnings on asset ratios of any bank in the country, in 1998, they were the highest rated community bank in the state, and I don’t remember the last time they had a foreclosure sale. In the last 16 years they have foreclosed on two properties and in both properties I told them in the report that due to the nature of the property they were high risk and had questionable marketability. I can assure you I don’t cut any corners and my appraisals far exceed USPAP requirements. I am under no pressure and never hear from the bank about my appraisals. I turn the appraisal in and that is the end of it. They are in full compliance with all regulations and all appraisals I do are USPAP compliant. As a matter of fact, the bank examiners use this bank to train examiners to show them how it is suppose to be done. The point I was making is, they don’t have to be. I could turn my license in, never miss a beat, and be perfectly legal and the bank in full conformity. The secret to having a good honest appraiser is to sell him a lot of bank stock. That makes all the difference in the world. That is my damn money they are lending and I want it back some day. You would be amazed how much difference this makes.
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Austin, perhaps you misinterpreted what I was saying - it was not aimed at you, the Bank has to own up if anything goes wrong, no matter what their rules are, they all go bye, bye when the Fed takes over.
Now in regards to holding stock (and that does not insure honesty-it only insures your willingness to venture capital) in the Bank, thats your perogative, far as I know we live in a free country, only thing is, IF the Bank fails and your the only appraiser, you be labled as offering a biased opinion by Fed reps. and that is a fact.


8)
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
And won't it be fun if banks get the right to sell real estate. They sign the sales agreement in the banks coffee shop, take the mortgage application right in the lobby, send the janitor (now the appraiser) out to see if the house is standing, roll the paperwork together with their handy-dandy computer, cash in some CD's for the down payment and move right to the closing; all within 1 hour and 17 minutes of application. So fast, the seller won't know what hit them.

Banks can be a frightening thing. Really big banks….ye gods!
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Austin,

So why are you hanging on to your license? Seems like only a liability with regard to what you said. If you can make money without liability, seems your ahead of the game. Just wondering. :roll: Not that you would do any less of an appraisal, but, you'd relieve yourself of the encumberance of USPAP and (sometimes) ignorant enforcers.
 

jtrotta

Senior Member
Joined
Jan 16, 2002
R.Carlsen;
you make me feel like a deer under the influence of "high beems" - looking from past to present, if I recall (and I'm old-so perception sometimes gets the better of me) Banks began taughting this assumption that when the appraiser's invest in all of this computer stuff, we'll be able to turn over a mortgage in TEN DAYS :roll:
Well here I am 12 years later, haven't seen a mortgage roll over in less than 30 days yet; most Lenders are just now (01-02) comming to accept the idea of electronic services. Problem is, in my area if you think an attorney is going to jumpt thru hoops for some Banker, your sadly mistaken, so your not closing in less than 30 days, due to their busy schedule period. Think all the Bankers forgot about that; you see here you cannot close in escrow, you need an attorney- our State Law prohibits anyone else from providing that service; and the Title Search is also performed by the attorney. Yahooligans
Guess the attorney's here got'em by the "short hairs" eh :?: Anything you would like to do in my State requires a License; required education courses; Insurance; and of course an exam that you need to pass. Now if someone can point out when Congress deleted the "Monopoly Law" - I'd like to know :!: Oh I need a date, cause then I'm going to Sell that information to Bill Gates - so he can sue the government for misrepresentation. Also, won't they fall under SEC guidelines for restraint of trade :?: This may also lead to the discovery of various State Laws - restraint of trade; potential for co-minguling of funds; and lastly a "Biased" - Misleading - and Inappropriate methodology for self presevation vs public knowledge. Don't forget all the hoopla about the Blaley Bill - latest reports are in and only 5% of mortgage holders have made a response to the "opt out" program; what does this say about the public; :lol: THEY :? ARE :idea: UNINFORMED 8O


Life Inside A SnowGlobe - circular & neverending man 8)
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Blue 1: That is a good point and I may well do it. I have done up to 9 appraisals a day using regression methods and in a few years the ways things are going I may be doing that full time. I can beat any AVM hands down and am just waiting for the market to come to me. I can take one gofer to get the property data about the subjects and do 15 per day easily with better accuracy than you can imagine and far more convincing.
 
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