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Letter To State Board And Banking Commission

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Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
I have been toying with the idea of writing a joint letter to my State Appraisal Board and the State Banking Commission. I want to point out the obvious to them and ask why and suggest that they get together and work on some of the problems we face with lenders.

Today after almost having a shouting match with an pushy lender it lite my fuse and I am thinking on what I want to write and I would like some suggestions. While this may be a wasted effort I want to do it anyway.

Some points that have come to mind are:

1. Commission based Loan Officers choosing the appraiser.
2. The hints at values we receive, Owners Estimate of value, Loan amount, Can you hit $zzz,zzz etc.
3. Asking us to do free appraisals in the form of Comp Searches.
4. Trying to not pay us or asking us to reduce our fee if an appraisal doesn't work.
5. Promises of more work "if you can help me out"
6. With holding work because you didn't h it the value
7. Pointing out the flaw of loan officers that get bonuses based on their amount of dollars loaned and them ordering the appraisal
8. Appraisers that are willing to bow to lender pressure.
9. Including some Examples from my Lender Pressure file I keep.

This is just some rough ideas and some of them could be incorporated together. Help me think of the other things we appraisers have to deal with that might be addressed by these boards. I know I am forgetting other issues.

I am also thinking of sending this letter to my State Representative, a person friend of mine and my State Congressman and anyone else I could think of. I am open to suggestions of who to send it to also.
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Many state legislature websites have a way to send an email to ALL of the members. I do that often. You never know when one of them may want a cause to champion.

Remember, some of the legislators are appraisers and bankers. Some of them are interested in weeding out some of the bad apples.


Post your letter here and I will send it to ALL of the NC legislators.
 
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Would it help if lenders/loan officers/mortgage brokers had to log and report all shopping done to secure an appraisal?

Would it help if the appraisal request was required to be in writing, state minimum information, including the fee and be signed by lenders/loan officers/mortgage brokers and the appriaser, and be included in the appraisal report?

Would it help if USPAP had minimum requirements for the information to be included in an appraisal request?

Would it help if USPAP included a section for lenders/loan officers/mortgage brokers?

Would it help if reviews and the report they reviewed, had to be forwarded to the state enforcement agency?

Would it help if an enforcement section was added to USPAP?

Would it help if everyone involved with lenders/loan officers/mortgage brokers had to take an exam and complete continuing education every two years?

Would it help if the AQB had minimum requirements for lenders/loan officers/mortgage brokers?

Would it help if someone set up a forum like Appraisersforum for lenders/loan officers/mortgage brokers?

Best of luck.

Please join me in a prayer for al those who are going in harm's way for freedom's sake.

Roger R. Patzold
[email protected]
281)592-0582
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
Just read an article in the Communicator by Randy Hartman. He suggested a couple of things I really liked.

Lenders being required to pay up front. Keeps the threat of non-payment out of the picture. MY FAVORITE Require the lender to sign the report saying they agree with the report and take responsibility for it!

The way it is they have no accountability. They don't (normally) get sued when the loan goes bad. Lets put some liability on them along with the number hitters.
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Roger,

Many of your ideas are good ones. The problem is that state appraisal boards have limited authority to impose rules and regulations and NO authority to encact LAWS (which has to be done thru the state legislature).


The BANKING commission in each state is who needs to be looking at several of these points. Several states (including North Carolina) are starting to have co-operation between the appraisal boards and the banking commissions or boards. Problems and issues that entertwine are being discussed.


I agree with you 100% that appraisal orders should be in writing and lenders not be allowed to ask an appraiser to violtae USPAP/state appraisal board rules. Every appraiser should be requiring orders to be in writing and to include the information that the appraiser wants and needs. Any appraiser working off of verbal orders is aking for trouble. Every repoert in my files has a copy of the order form attached.


USPAP should be enforced...by your state appraisal board. Each state appraisal act/law should give that authority to the state appraisal board. (NC certainly does).

NC requires all loan officers (except Federally chartered institutions) to be licensed and take 8 hours of CE each year. This went into effect 1 year ago and has helped a bunch!

The AQB has no authority over lenders in any way shape or form. Other governmental
agencies have authority over lenders.

There are several online forums for lenders/loaan officers/mortgage brokers

These are good suggestions. The problem is that so few appraisers ever contact their appraisal boards or state legislatures with ideas such as these. It is so much easier to moan and groan than to actually try and get some changes made.

As a whole, we appraisers do little or nothing to improve our profession.
 

Caterina Platt

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
New Mexico
Jeff,

One problem I didn't see mentioned:

When the lender requires a review of the first appraisal, and the selection of the reviewer is made by the LO - again they get an opportunity to find a number hitter.

Review appraisals should be ordered by the end user, ie. the institution funding the loan.
 
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
What I don't understand is the apparant lack of oversight by the end user/lender/investor. Are they not the ones with the most dollars to lose when anything in the sale/financing process goes wrong? Conseco was reported as having seriously damaged the manufactured home business. That statement is "An understatement" according to a friend who sells manufactured homes.

The buyer usually walks aways with little if any loss on a high percentage loan. The criminals don't care. They do it again or go back to renting.

The loan officer as far as I can see, at worst, changes company names or companies. The criminals don't care.

Most appriasers don't have the deep pockets many people think we do. Appraisers can loose their livelyhood, which is serious. The criminals don't care. Several appraisers are reportedly still working under different names or company names. Or they move to a new state. Reciprocity would help with that as well as make it easier for legimate appraisers to work across state lines. I don't know if I like the idea of a Federal license but I can do FHA appraisals in any state in which I have a license. Reciprocity should be available to any appraiser who wants to pay a fee and become competant in the new state/area.

I can understand living with a lose if it doesn't get too large, but when less money can be spent than is lost, to reduce that lose I do not understand why procedures are not set up to combat those loses. Sometimes it is necessary to go to small claims court to collect unpaid fees of only a few hundred dollars or less. But the practice of doing so for only a few hundred dollars keep me from running up outstanding fees of several thousand dollars as some appraisers have bragged about. If they had been more aggresive in collecting the smaller fee and not hoped that if it became large enough it would be paid, they might not have any lose at all on that account. The more someone owes you the more chance they will never pay.

Small things go a long way to solve large problems before they become large.

FNMA holds the lender responsible for the appraisal but doesn't advertise that requirement sufficiently.

Other entities will let the problems continue as long as the process continues. I don't see that as smart business. When you see that you are in a hole you should really stop digging.

When I spend a dollar it has to have a reason or I am soon out of dollars.

I will now get off my soap box.

Please pray for all those brave souls who are going in harm's way for freedom's sake.

Appraisers have the easiest opportunity to stop the criminal activity in the appraisal process.
 
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Bob,

I misstated my "What if" question about other entities being governed by USPAP.

I think everyone who has any involvement in "appraisals" from ordering one to receiving one should be governed to some extent by USPAP.

I do realize how unlikely that will ever be and how difficulty it would be to implement.

However, If the entity ordering the appraisal had to provide specific information in order to request the appriasal it would help. Being able to tell an orderer that I can't accept a request with a specified amount or range of value stops completly my having to deal with such problems in that request. Yes, they do sometimes go away and order from some other appraiser. If no appraiser accepted such an order the problem would be controlable.

If USPAP required the order or appraisal request to be included in the appraisal at all times things would change. The printed certification is always required, why not the appraisal request. FNMA could specify a particular form as they do the URAR, 2055, etc.

Working in the sticks helps but about half of the "specified amount or range of value" request I receive get corrected and we go on with the process. That step also, usually sets a positive atmosphere on the complete appriasal process. A positive process that leaves me in control of what I can and will do in completing an appraisal.

If the end user has some requirement to require documentation that USPAP had been complied with, including the appraisal request, they will be more likely to provide oversight of the whole process.

With those unique properties, the mortgage broker/loan officer/ whoever simple gets involved in a bidding process to see who will accept the package in a given situation. They also frequently want the appraiser to tweak the appraisal to fit the individual as they move from one individual to another. If an appraiser is not careful the appraiser will have several different appraisals out there on a single piece of property. That is usually the first step toward finding a new career.

My soap box has gotten a work out today.

Please join me in a prayer for all those who are going in harm's way for freedom's sake.
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Roger,

Nothing wrong with having a "what if" and "wish" list. We just need to channel the requests to the right governing agencies, boards and commissions.

Appraisers need to be speaking out like you have more often. There is no sound reason why ALL INVOLVED in the appraisal process should not be prohibited from making requests that violate USPAP and/or state appraisal board rules, coercing appraisers to do so or in any way and participating in acts that result in dishonest appraisals.

The biggest problem is our own fellow appraisers who are so willing to be dishonest in exchage for a few appraisals a month. These appraisers that are unable or unwilling TO SAY NO continue to make it possible for lenders, brokers, agents and others to contaimate the appraisal process. They are stealing from me, you and very often the borrower and BUYER of mortgages.

The only way dishonest lenders can exist is with the help and cooperation of dishonest appraisers. It is a conspiricy pure and simple when appraisers agree to be dishonest.
 
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Bob, you said it.

Only honest appraisers can clean up our mess.
 
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