July 2008 ASC Q&a- Wink Wink Comp Comp

[Hamlet]

USPAP is not meant to enfore any rules on anyone other than the appraiser, so looking to USPAP to regulate others in the mortgage industry is in vain.

IMHO, the only way to remove the unethical behavior and requests for target hitting is simply to remove those interested in the outcome from the appraisal ordering process. The MBs should not order appraisals, that should be done by the lender after they receive the package from the MB. After all, it is their money they are lending. Also, the lender should be required to hold that loan for a minimum period before selling to investors, unless they submit to an audit process by an independent.

 

[Lee Lansford]

Ummm!! How about recognizing the fact that the practice of performing comp checks could, has, and will lead to unethical behavior on a wide scale so let's not allow comp checks in the first place!!!!!

Chew on that one Mr. Socrates!!!

Sandy, your "solution" would only affect those who abide by the rules and already act in an ethical manner.

How would your suggestion prevent the mortgage broker from asking his (her?) favorite "skippy" to do what you want eliminated? The answer: It will not affect the unethical or ignorant appraiser.

Lee

 

[Lee Lansford]

USPAP is not meant to enfore any rules on anyone other than the appraiser, so looking to USPAP to regulate others in the mortgage industry is in vain.

IMHO, the only way to remove the unethical behavior and requests for target hitting is simply to remove those interested in the outcome from the appraisal ordering process...

Now you're on to something!

 

[Fred]

I disagree with the ASB twisitng this so someone can loop hole there way from the comp check to another assignment without exposing the impropriety of it all.

That's because there isn't necessarily any impropriety.

 

[Fred]

IMHO, the only way to remove the unethical behavior and requests for target hitting is simply to remove those interested in the outcome from the appraisal ordering process.

I theory, regulations do not remove or prevent wrongdoing. Laws against murder do not prevent or remove all murder.

In almost all cases, preventing those with interests in the outcome from ordering appraisals would preclude everyone except judges, mediators - and AMC's - from odering appraisals. Think about the consequences of that. Just as AMC's have arisen to fill the need of having disinterested parties order appraisals, the AMC's would become the brokers of all appraisal transactions because the buyer or seller, the trustee of an estate, a comdemnor or condemnee, the tax assessors office and the individual complainant - interested parties all - would all be precluded from ordering appraisals.

This keeps crossing my mind, but I never posted it. Put yourself in the shoes of a legislature. Who is it going to appear to be the ones who can't be trusted? If appraisers would do their job and just say no to htting numbers, then no one would be lobbying anyone to "fix" it. That's the whole reason the government has put appraisers in the middle of so many transactions.

 

[23Degrees]

Any assignment received after submission of a “comp check” has been assigned based on the contingency that the “comp check” gave the all clear to move ahead with that particular appraiser or appraisal firm. To deny this is to enter a world of complete and total fantasy. Anyone ever do a comp check and then have the assignment go to someone else based on your well done and completely accurate comp check.

I agree with Bert. The way to end this nonsense in the lending world is to have in place a mandate that any particular appraiser or appraisal firm can only appraise a particular property once within a 12 month period. You do a “comp check”, congratulations you just hit your quota and don’t even think about appraising that property until 12 months go by. Until the MB’s and LO’s are deep sixed from the process this could at least add some real clarity to the issue and would have its benefits even after they hopefully are removed. If they happen to decide to do enforcement on the issue it is much more evident if someone did more than one appraisal during the time period than trying to nail down whether every “comp check” file has all the t’s crossed and then making some judgment about contingency that they clearly refuse to want to make.

No more BS about whether or not there was a contingency, there was and there always is whether or not the powers that be include enough wiggle room for an 18 wheeler.

As was pointed out above there are similar problems that go along with every update (new assignment with same property as subject) when the same appraiser is used. Not only do you have expectations from the user as was pointed out, you have motivation by some so inclined to not remedy an error that they made in the first assignment in the second or third. Making it a one shot deal per firm ends that hazard as well.

 

[Hamlet]

I don’t understand the wish to hamstring ethical appraisers further. We have enough rules and regulations and piling on more will only hurt the ethical ones. Consider gun control. Certainly only the law abiding citizens follow the laws, not the criminals.

This time around, we appraisers need to fight for regulation over the other entities in this industry so that they have to recognize and abide by the same rules as appraisers.

I find it interesting that there is such a high number of criminals end up in the MB field (I won’t say profession).

 

[Fred]

Any assignment received after submission of a “comp check” has been assigned based on the contingency

Not necessarily.

Do you folks understand that a standards board or rule-making body cannot adopt a standard or a rule based on maybe? The rule has to be a benchmark that holds 100% of the time. That's what a "uniform standard" is. That's why the USPAP requirement is that the appraiser must not enter an agreement to hit a pre-determined number - because that is the key ingredient 100% of the time.

There are plenty of examples where limited, preliminary services are necessary and can be provided competently and ethically. That is exactly why the requirements can't be changed to stop business practices that are cost some appraisers profits.

 

[Fred]

I don’t understand the wish to hamstring ethical appraisers further..

And who here wishes that?

This time around, we appraisers need to fight for regulation over the other entities in this industry so that they have to recognize and abide by the same rules as appraisers.

Good luck. If everyone could be made to act as disinterested third parties, there would be no need for a profession built on being disinterested third parties.

 

[Lee Lansford]

... The way to end this nonsense in the lending world is to have in place a mandate that any particular appraiser or appraisal firm can only appraise a particular property once within a 12 month period. You do a “comp check”, congratulations you just hit your quota and don’t even think about appraising that property until 12 months go by...

And, again, this will prevent the unethical, the uncaring, and the ignorant, from doing what?

I know that implementation of what you suggest will have no adverse impact on most everyone who has posted in this string. They (we) already abide by the rules. I don't want to rain on your optimism that one more rule will be the solution, but if I must be the rainmaker, that is my lot in life.