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Lender Pressure--Better than new laws without teeth?

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Elliott

Thread Starter
Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Congress and most states are running around trying to figure
out how to address mortgage fraud and lender pressure. We've
seen the drafts of legislation....but how about this for a
solution?

Just like when we just got the new 1004 forms, and someone
forgot to include an intended use statement. Fannie made us
all include an intended use statement.

So how about adding (like the way we discuss the contract,
listing, etc) a requirement to "Explain how you were
contracted to do the appraisal assignment?"

--The best answer would be, "I received a phone call regarding
my availability, fee, and time frame for the subject. I was sent
over a refinance order with the address and phone number of the
borrower. In the last year I've done 15 reports for this lender."

But others would read (and this is how we end lender pressure)....

--MB called requesting a 'comp check.' I said, I don't do 'comp
checks', but he sent over the request with a "estimated value"
of $500,000, and to contact him if there was a issue with value.
I proceded with the inspection, developed my opinion of market
value and sent the report.

--XYZ, an AMC, faxed an order, with 4 pages of SOW requirements.
There was a estimated value on the request of $500,000. In the
SOW it required that I contact them immediately if there was a
potential isssue with value. I inspected the property and delivered
the property without contacting the lender prior to completing the
report. About 5% of my work per year comes from this AMC.

--MB faxed a request for a report on the subject property with a
borrowers estimated value of $500,000. This MB is my largest
client and I get 45% of my work each year from this MB. The
MB is also my brother-in-law.

You get the idea....So instead of new legislation that will never be
enforced, why doesn't Fannie or OMB require appraisers to explain
on Form 1004 the circumstances surrounding their engagement for
the appraisal assignment?
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
So Elliott,

Why do you expect this verbiage to survive the slice-n-dice AMC portal or the MB never turning in your "complete" report?
 

Elliott

Thread Starter
Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Randolph,
Just like we have to provide a analysis of a contract, I think
appraisers are capable or can be required to provide an
adequate explanation of the verifyable source of information
regarding how they obtained their assignment.

Try omitting a 'intended use' statement and virtually every
UW will call you on it.

After the S&L Bailout, the powers that be said, "no contact between
production and appraiser" and it happened instantly.

If AMCs and MBs can alter every and all appraisals report, then I
guess there would be no hope.
 

Lawrence R.

Senior Member
Joined
Mar 27, 2007
Professional Status
Certified General Appraiser
State
South Carolina
But others would read (and this is how we end lender pressure)....

--MB called requesting a 'comp check.' I said, I don't do 'comp
checks', but he sent over the request with a "estimated value"
of $500,000, and to contact him if there was a issue with value.
I proceded with the inspection, developed my opinion of market
value and sent the report. Edited to add "and immediately threw it on the floor and took that appraiser off the approved list"

--XYZ, an AMC, faxed an order, with 4 pages of SOW requirements.
There was a estimated value on the request of $500,000. In the
SOW it required that I contact them immediately if there was a
potential isssue with value. I inspected the property and delivered
the property without contacting the lender prior to completing the
report. About 5% of my work per year comes from this AMC.
and then the AMC threw my report on the floor and took me off the approved list.

--MB faxed a request for a report on the subject property with a
borrowers estimated value of $500,000. This MB is my largest
client and I get 45% of my work each year from this MB. The
MB is also my brother-in-law.
and he threw it on the floor and didn't even pay me for it and we got in a fight about it at Thanksgiving dinner

You get the idea....So instead of new legislation that will never be
enforced, why doesn't Fannie or OMB require appraisers to explain
on Form 1004 the circumstances surrounding their engagement for
the appraisal assignment?

The problem with that theory is that FNMA would NEVER see the words you wrote on an appriasal they never got.

Skippy would still say allllllllllllll the right things and keep right on rockin'

Or maybe I am just too cynical tonight.
 

Joe Masin

Sophomore Member
Joined
Jan 21, 2004
Professional Status
Certified General Appraiser
State
New Jersey
Unfortunately, Mr. Roscoe, you are soooo right.
Jersey Joe
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
...You get the idea....So instead of new legislation that will never be
enforced, why doesn't Fannie or OMB require appraisers to explain
on Form 1004 the circumstances surrounding their engagement for
the appraisal assignment?

And you believe that the appraisers who play the game would be truthful?

And, for those appraisers who don't play the game, do you believe that the appraisal with the truthful language that you offer as illustrations would ever see the light of day (that is, would be anything other that circular filed)?

You are an optimist.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
I got a phone call from some MB in San Diego a few hours ago. He called me because apparently I am on the Provident list of approved appraisers. Provident is VERY strict in their requirements and underwriting from what I hear. So the broker says he needs me to do a comp check to make sure the value is there before ordering an appraisal.

I asked if we should call Provident underwriting and get them on a conference call to see what they think about getting comp checks before doing an appraisal for them to make a loan on. He was all for it. He thinks it's insane to order an appraisal without making sure the value is going to be there.

This guy has no clue whatsoever. Typical. Are MB's living in a cave?
 

tjcou812

Junior Member
Joined
Aug 17, 2007
Professional Status
Certified Residential Appraiser
State
Connecticut
My question is why is it the appraiser that has to do the explaining when its the lenders/mb that are putting the pressure on us. Its time congress puts them on the bubble instead of the appraisers with new laws and regulations. It just irks me also that some appaisers out there if they don't get a emv from a lender/mb they would not know where to start because they didn't have a value as a beginning point. its sad but true.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
...

This guy has no clue whatsoever. Typical. Are MB's living in a cave?

Greg, I don't suspect that they are living in a cave.

What I do suspect is that the VAST MAJORITY of the time when they ask for a "comp check", a "comp check" is what they get (and, very likely, a guaranteed value). Thus, their behavior is SOP.

Lee
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Greg,......Yes, in a big way....they are living in a cave. The desparate and angst-filled conditions in many realty markets remain ripe for the perpetuation of comp check request tactics, or outright demands thereof, and a clear disregard for whatever half-baked language might be in any state-sponsored legislation in the last two years that is supposed to get tough !....protect the consumer, and establish the expectation that there is to be NO COERCION of the appraiser in fulfilling their role. If they want free value statements they can get them from infinite sources. If they want an appraisal.....then order an appraisal.....and there is NO NEED to tell me what you think the place is worth ! (One SHOULD be able to submit hard-evidence of coercion to their State and reap a $$-reward from posted bonds retained !)

They do not care, they will not stop, and most states are frozen stiff in putting out the REALLY strong language that forewarns the corrupted ones. There is only one party that carries obligations for doing things the proper way. Any guesses ? The invertibrate appraisers will survive this era of doldrums because they are flexible. The vertibrate appraisers with rigid internal body parts will move closer to the brink of.....(you fill in the blank).

The truth about property condition, the truth about market trend and activity for most-recent sales of most-similar homes that are most-proximately located......will not necessarily salvage a property owner who has no equity, is in over-their-head, can not sell in quick time, and no matter what fancy government program is being installed to come to the rescue. Everybody else who is secure in their property, their assets and their income is likely to just.....sit it out.

Sometimes a python eats a pig.....and that mass passes slowly through the gut while the python lays there.....and endures the experience. He was hungry, he ate, and now he digests. Same can be said for insurgent and aggressive mortgage industry practices and their feeding frenzy of recent years. That digestion process is still on-going. If only they had sprinkled some more Q.C. on that pig....before they swallowed !
 
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