Independent Appraisers GSE/Cuomo Proposal 3/19/08

[Roscoeman]

Answering the call

"The call" was the individual, internal recognition that massive change is pending with or without appraiser input. It's a euphemism, folks. People who answer "the call" are acting on their own sense of urgency.

Posters on this thread are constantly crying out for leadership, always complaining that some entity or the other has failed to step up to the plate and begging for someone else to take action, write a letter, mount a lawsuit, or spoon feed the masses with an on line petition that is mindlessly easy to click on and sign.

These people in this thread who have answered their own internal call have not waited for someone else to make it easy for them. They took action. Who cares if they are self appointed? If I want to submit a proposal, I'm certainly not going to wait around for someone to appoint me. And I'm certainly not going to wait around for a herd of cats to reach a consensus on a public forum.


The urgency

Massive change is pending with or without appraiser input. And there are powerful people who do not have the best interests of appraisers or the public trust at heart that are, as we speak, bringing massive amounts of pressure on the people in power with their own proposals. The timing is urgent. Input needs to those in power has to happen fast.

The proposal in this thread had to be in Cuomo's hands quickly. Speed was a strategic necessity.

Membership?

Pam put out a question, "if there were an AMC that insured appraiser independence, would you be interested?" She made an electronic sign up sheet available and stressed that, for now, it was just a show of interest. That did not make anyone a "member" of anything except a member if a group that had expressed interest.

Furthermore, all of the posts in this forum have gone into the thinking process of this committee. After the settlement agreement was posted, Pam posted more than once (on our long threads) that "this is good stuff please keep the ideas comming." In this indirect way, we all had input.

Public input

Now that these self starters have answered the call and formulated their own proposal, which is an organizational outline, they are simply asking for your support. And they are asking now for your further input for ideas or pitfalls that may occur during the actual development stage.

It's great that people are questioning aspects of the proposal and offering ideas to make it more palatable to them. But the basic concept might not change. If one were to think that the basic concept were so off that no amount of tweaking would get them to support it, then they need to get busy with answering their own call to formulate a proposal. And they need to do it fast.

Because if this is the only proposal that Cuomo gets that actually protects appraiser independence, and all the other proposals he gets are nothing more than the usual plausible deniability loopholes for lenders, then it is imperitive that he (and the feds) see a show of support from appraisers. **Quickly**



The proposal

It is an outline of a plan that accomplishes two main goals; it works in conjunction with the already signed settlement agreement and it actually enhances (and does not diminish) appraiser independence. That's the basic starting point.

Appraiser independence, not just a good idea, it's the law

The economic meltdown has engendered new interest on the part of those in power in enforcing the existing banking laws regarding appraiser independence. Bank LOs, MBs, and AMCs should never have been allowed to be in a position to pressure appraisers, it's illegal. It may be painful for us, but we simply must remain of the side of begging for enforcement for those laws. Every single attitude of ethical appraisers must be filtered through that concept.

Just because one has a client pool that does not pressure, or that only pressure in a way that allows one to not cave in to it and remain ethical, does not change the fact that the law says those clients should never be in that position.

Frankly, any position espoused that does not make appraiser independence the primary focus is seen by me as a protectionist attitude that favors the status quo of leaving clients in a position to pressure appraisers.

Lamenting for the old days has it's place but accepting the reality of what we have to work with, now, is urgent if we are to have any say at all in what happens through the actions of those in power.

I'm endorsing. Now.

As I am too!

Very well said, thank you so much!

Let's all band together, instead of fighting each otherm2: m2: m2:

 

[PropertyEconomics]

How can constructive debate ever be harmful?

 

[Wendy]

How can constructive debate ever be harmful?

Most of the debate I'm reading is simply b*tching.

I'd like to see those unhappy with the proposal give their own solutions to the questions they raise. Pointing out flaws is easy; solutions are a great deal harder and scarcer than hen's teeth.

 

[George Hatch]

One common theme I'm noticing in the opposing opinions is that people are assuming a rotational panel will reward sloth and basically punish excellence. If the proposal really was limited to a rotating panel that assumption might indeed be valid. However, the proposal actually involves several components that are intended to work together, not separately.

The Vault concept isn't new, but it's inclusion in the proposal provides for a one-stop depository of the appraisal reports the GSEs are using. It would be separate and apart from what the lenders put in their loan files. In addition to providing an extra level of security for everyone involved, it allows us to analyze groups of appraisals to seek common trends for patterns of performance.

Part of the proposal includes developing a current and comprehensive appraisal policy for the GSEs, updating it on a regular basis, and making the current version readily available to everyone. Not only would such a reference provide a definitive guide for appraisers to use when developing appraisals for these intended users, but it also provides a solid basis upon which objective reviews can be built.

The review function as proposed is possibly the most powerful element in the proposal. As has already been noted by several other people in this thread, we discussed - at length - the benefits of developing an objective standard for performing reviews and rating the appraisals. Another item we discussed that I've seen discussed is keeping tabs on an appraisers cumulative average score; that score being kept on a rolling basis. That means that however bad or however good you were three years ago is irrelevant to an average that's based on your past 100 appraisals. People are concerned about the idea of losing a populatiry contest at an arbitrary "judgement panel", but in my mind they should be more concerned about returning appraisals with cumulative rankings that drop them below a minimally acceptable average score.


One of the suggestions we discussed that I haven't seen mentioned outside of our discussions is the idea of returning a deficient appraisal back to the appraiser for correction, rather than just passing on a significantly deficient appraisal or rejecting it outright. It's been my experience that correcting a problem in an appraisal report is a lot more time consuming than doing it properly in the first place. After an appraiser gets called on the same deficiency two or three times in a row, they start rethinking the economic benefits of cutting corners and playing the odds.

Think about how many assignments can be redistributed to the reasonable operators if the slackers have to slow down to produce an acceptable workproduct.

Another idea we discussed is rewarding appraisers with consistently excellent quality scores by increasing how often their "turn" pops up; and doing it at the expense of the proven slackers who will see a reduction in volume. Obviously there are limitations to that based on supply and demand.

I wouldn't be that anxious to see a "banned" list. OTOH, I could see some benefit to having an "all-stars" list of appraisers who, solely by virtue of their demonstrated excellence, get some recognition for their hard work. Perhaps such a list would result in more business for them outside the GSE system.

The point I'm trying to make here is that the proposal includes some elements that, depending on how the details work out, could go a long ways towards levelling the playing field and rewarding excellence at the expense of the slackers. We specifically avoided discussing fees or imposing artificial limitations on panel size, but it seems pretty obvious to me what will happen with fees when appraisers have to either slow down or risk falling off the approval panel.

Right now, the sweatshops and the single signers (1 appraiser + 20 trainees) are basically stealing business from legitimate operators. Lenders have been using their own priorities for reviewing and rating appraisers and handing out business; and for some of those lenders, turn times and fees have been bigger priorities than quality and honesty.

In summary I'm asking everyone to consider the whole as consisting of a number of elements that are intended to work together, not separately. I'm also asking those who seem to be so confident about their quality how they plan on reacting if the occasion arises that good enough for a lender review turns out to be short of good enough for an IVPI review. 'Cause for some of us, that's a distinct possibility.

Who knows, maybe by the time the IVPI reviews start leaving their mark, the MBs will probably be glad to get out of the appraiser control business.

 

[Dale Smalley]

A good time to think BIG. It appears to be a good plan with good intentions. My A.D.D kicked in after the second Whereas so I'l try to read the rest later. Then I was wondering if an independant appraiser joins a group of independants to which they are dependant upon are they still independant? And if you get kicked out of a group of independants whould you be exdependant?

 

[Smokey Bear]

Darnit George, that was a good post you retracted. :blush:

 

[Jonsey]

Darnit George, that was a good post you retracted. :blush:

Retracted - in deference to George Hatch's sound principles.

 

[Randolph Kinney]

Retracted -

Your remarks are enlightening and explanatory. People who engage in the problem solving, involve themselves, take the lead are the ones who get the acclaim.

Others just want to know who appointed you as god. :icon_mrgreen:

What is that saying ... either follow (get behind), lead (get in front) or get out of the way (stand aside) and let those who are part of the solution get the job done.

 

[Frederick]

George;

Another vote for putting it back.

 

[PropertyEconomics]

I respect the retraction as much as I respected the post. As I said Mr Hatch, your honor is beyond reproach.