Newspaper Article--Good work forumites!

[J in Florida]

http://www.orlandosentinel.com/realestate/...ate%2Dheadlines


Please sent this link to every single reeeliter and loan officer you know--They MUST read this.

 

[xmrdfghap]

What is interesting is not that it is a good accurate report, but that it is carried by the Dow Jones Newswires........

Think any financial house is looking askance at their portfolio this afternoon?

 

[Judy Whitehead (Florida)]

Oh, my - this really is a public forum isn't it?

 

[Pamela Crowley (Florida)]

Fantastic article!!!! Even better knowing where it's from Dow Jones Newswires :!: :!: :!:

Better late than never. Let's hope this goes a lot further very quickly while we still have a chance of stabilizing this mess.

The NAR would do very well to jump on this ASAP and make it very clear to all it's members that exerting their influence onto appraisers is very wrong behavior. NAR becoming part of the solution right away would do worlds of good for all Realtors; not addressing this will make them appear to be a big part of the problem instead.

 

[Terrel L. Shields]

>>Bob Ipock, a residential appraiser in Gastonia, N.C., said he's surprised public attention hasn't focused more on the quality of some appraisal work, given that most Americans have more money invested in their homes than in the stock market. <<

I was really smitten with Bob's remark and it should be emailed to every Senator and Representative in the Nation. This is what the public should worry about.

As an aside, I argued too many large bank mergers are like Enron mergers, Huge debts did not translate into Huge profits. I wonder when (not if) a few of the Mega banks will falter under crushing debt. They are treading water in my estimation. Bank problems generally lag the general economy by months, even years.

ter

 

[Bob Ipock]

Ter,

I saw PART of the article in my local paper today. They cut the stroy down a good bit. My comments were not included in the article here.

The last several months have been tough for me in that it seems NONE of he politicians I have contacted see "created equity" and "appraisal inflation" as a big problem. In my opinion there are more people affected by these issues than by Enron, Worldcom et. al.

The foreclosure rates here are thru the roof and that is not a good thing for anyone. If a person were facing foreclosure and could sell their home for the loan balance...would they not do so? Of course they would. The problem is that too many people are upside down on their mortgage and CAN NOT SELL. This a part of the reason in the rise of foreclosures.

I have been pulling up tax cards and MLS date sheets on local foreclosures and am finding that MANY of these homes were sold for and appraised for inflated prices (as compared to the market). Couple that with 97%, 100% and 125% financing and it is no wonder that so many recent sales (3 years or less) are going into foreclosure.

None of my elected officials seem to think this is a problem and they certainly do not see a relationship between mortage/ appraisal fraud and foreclosures. Many of the regulators are is asleep at the wheel while the huge train wreck looms in the near future. Real estate is about the only bright spot our economy has and much of the brightness is done with smoke and mirrors.


Bob Ipock

 

[James Bourgeois]

The article was vanilla without much sugar in it for us. The media, like those fine folks who regulate our profession, are reluctant to place the blame squarely on the lenders and those originators who exert pressure on appraisers. Instead, they see it as a failure by the appraisers who cave to the pressure. The lender, after all, is only looking after his own interest, and that's the way it should be. At least that's how it's seen.

The end result will be the same as we witnessed during the last S&L meltdown. The appraisers will get the heat and the lenders will skate. The feds will show up again with the same attitude they displayed that led to licensing and certification. The Foundation will hang us out to dry while the Institute mines our data and makes money from our research and work.

We'll all be displaced by AVMs and end up as greeters at WalMart.

I know this seems pretty bleak, but the last time we took the heat while all those crooked S&L bigs retired to sunny climes with cash in the bank while we went to school so we could be certified, regulated and jammed by Fannie, Freddie, HUD and VA.

 

[Francois K. Gregoire]

Fantastic article!!!! Even better knowing where it's from Dow Jones Newswires :!: :!: :!:

The NAR would do very well to jump on this ASAP and make it very clear to all it's members that exerting their influence onto appraisers is very wrong behavior. NAR becoming part of the solution right away would do worlds of good for all Realtors; not addressing this will make them appear to be a big part of the problem instead.

Pam,

Agree it's nice to see the article. Keep in mind, NAR has taken a position on the issue. See ARTICLE HERE

Just because there has not been a recent story does not mean there is nothing going on behind the scenes. There are efforts on a number of fronts, including the Congress and NAR Professional Standards Committee. The issue, be assured, is not dead.

 

[Steve Owen]

Great article. This is the stuff that appraisers have to live with; the good ones have backbone. What we need is an equitable system to find and decertify those who do not have backbone. The pressures on us will never change because human nature will not change.

I had a situation yesterday that will bring the point home. A guy building a very unusual house (one bedroom, large greenhouse in place of the living room, heated driveway, etc.) was unhappy with his appraisal and his wife called me to do another one. I told her I respect the first appraiser and can't guarantee anything about my value. The loan officer called me (this is one of the few good guys) and said go ahead and do it. I went to the under construction site. When I asked for a set of plans and specs, cost estimate, and completion date, the owner couldn't provide them. (This probably means that the first appraiser was guilty of a USPAP violation.) I told the loan officer that I couldn't complete the appraisal until the owner provided this information.

That is when the loan officer provided me with this interesting tidbit of information. A third appraiser (and one whose ethics I already did not have much regard for) had brought him an appraisal the day before. The owner had hired this appraisal done, but the appraiser put it in the bank's name. GET THIS: It was delivered to the bank by the owner! Of course, it had the value the owner wanted, some $50k higher than the first appraisal. The loan officer told me he would lean on the owner to provide the information I need not to be in violation of USPAP Standards
Rule 1-4(h) - departure not permitted. He also said he would not accept the second appraisal and would wait for me to finish my work before making a decision on the loan.

HERE IS THE PROBLEM: The standard audit program operated by MREAC and other appraisal commissions will not stop this kind of abuse. Everyone in town knows about the bad appraiser from above, but nothing is done to stop the abuse. I cannot turn him in because: the appraisal is made out in the bank's name and I have no proof that the above unethical behavior occurred (it would take testimony from the loan officer, who probably doesn't want to get involved). The basic problem is how to stop this kind of abuse without having the burden fall on the good appraisers (who are most of those in the industry) the way the current audit programs do.

 

[Richard Carlsen]

Steve,

There is only one way that any pressure at all can be taken off of our shoulders. That would involve appraisals assigned out of a pool with the lender having no choice or influence. I'm not sure I want to see that come to pass where my work load is dictated by some bureaucracy that tells me what to do and where to do it and, would most likely want a piece of the action to do it.

The only reports that I do where there is absolutely no sense of any pressure at all are the VA's I do. The lenders cannot cancel me and they have a heck of a time getting a value raised.

But I don't think I want more bureaucracy. I believe that I can handle the pressure if it is applied and walk away from an order if there is a pre-determined value attached to it. I’ve done it for nearly 9 years and my business is as strong as ever. I don’t want some paper pusher overseeing me to keep me on the straight and narrow.

If we learned one thing from the Clinton years it is that character does count. My profession demands it. I believe that most of us exhibit it on a daily basis with no problem.