PAREA: Darn the torpedoes / 3 Sheets to the Wind

[George Hatch]

It's no different than if/when a lender is operating their own in-house appraisal department. Or (since Tiffany is in the house) when a county is operating their own Assessors Office. Or when the state of federal govts operate their own appraisal departments. It's not the manner of employment that is the problem, it's the extent to which the employer or client is influencing the appraisers off of their stated impartiality and objectivity that becomes the problem.

In my FRT work I am NEVER engaged by anyone on the loan origination side of the business. No matter how large or small the institution the chief appraisers or appraisal coordinators or whomever is handling the engagement are operating independently of anyone on the loan origination side of the business. When its a chief appraiser that job title is usually a VP of equal status as the management of the loan originators, not a subordinate to them.

At the lender I worked at the loan originators were not allowed to get off the elevator onto our floor and they weren't allowed to even call the appraisers at their desks. We were employed by the same institution but we were not part of the loan originators' team. This didn't happen because the management was noble or altruistic but due to their compliance with the existing banking regs.

 

[George Hatch]

If and when the lenders are prohibited from using AMCs, their only other option will be to run everything in house. No matter what happens with AMCs, the lenders will NEVER be allowed to go back to outsourcing appraisals to the mortgage brokers. All that's going to happen is that the $10/hr clerk who is sending out blast emails and shopping you by fee and "reviewing" off a checklist will be employed directly by the lender instead of by an outside AMC.

That's assuming you don't end up in a cubicle farm at the lender doing an 80/20 mix of desktops vs 1004s. M-F/8-5, dress code and a fridge in the breakroom to keep your sack lunch cool.

 

[chad hampton]

It’s fun watching George defend a bastardized system.

 

[djd09]

The difference is that the AMCs are acting as the agent for the lender in lieu of the lender operating their own in-house appraisal department. The AMCs only handle appraisals and related. That's all they do.

What the AMCs are not are loan originators whose primary function is to originate loans , or who only get paid if the deal closes. That's the difference. It's big difference, too.

The much closer parallel to AMCs are the in-house appraisal depts that are operated by the (actual) lenders, those departments being completely isolated by banking regulations from the loan origination departments. Which is exactly opposite of what happens in the appraiser/MB relationship.

As outside loan originators, your old MB clients had no legitimate business in even touching those appraisals, let alone controlling the engagement and payment for those appraisals. They shouldn't have even been allowed to contact the appraisers directly, except indirectly via their contacts at the lender.

It's an inherent conflict of interest for the loan originators to control any aspect of the lender's due diligence requirements.

dang, i thought it was just jg on parrot mode. you need some new material

 

[Tiffany Gibbons]

It's no different than if/when a lender is operating their own in-house appraisal department. Or (since Tiffany is in the house) when a county is operating their own Assessors Office. Or when the state of federal govts operate their own appraisal departments. It's not the manner of employment that is the problem, it's the extent to which the employer or client is influencing the appraisers off of their stated impartiality and objectivity that becomes the problem.

In my FRT work I am NEVER engaged by anyone on the loan origination side of the business. No matter how large or small the institution the chief appraisers or appraisal coordinators or whomever is handling the engagement are operating independently of anyone on the loan origination side of the business. When its a chief appraiser that job title is usually a VP of equal status as the management of the loan originators, not a subordinate to them.

At the lender I worked at the loan originators were not allowed to get off the elevator onto our floor and they weren't allowed to even call the appraisers at their desks. We were employed by the same institution but we were not part of the loan originators' team. This didn't happen because the management was noble or altruistic but due to their compliance with the existing banking regs.

Actually that is not the same scenario at all. Public servants working on a mass appraisal for ad valorem tax purposes and/or defending the elected official's values are working for the public to make sure the tax burden is fair and equitable for all. Sales are used for a snapshot in time. No commissions are involved, no "origination fees", etc. No "Chief Appraiser" or "Deputy" operates that way. We were all on the same team. I've worked for both a county jurisdiction and Tennessee DPA as a W9 employee, but I have been back to only VA appraisals for years now. VA is the only one doing a fee panel correctly as far as I am concerned. I have never worked for an AMC, so I don't know all those intricacies and I don't care what they do frankly.

 

[Tiffany Gibbons]

If and when the lenders are prohibited from using AMCs, their only other option will be to run everything in house. No matter what happens with AMCs, the lenders will NEVER be allowed to go back to outsourcing appraisals to the mortgage brokers. All that's going to happen is that the $10/hr clerk who is sending out blast emails and shopping you by fee and "reviewing" off a checklist will be employed directly by the lender instead of by an outside AMC.

That's assuming you don't end up in a cubicle farm at the lender doing an 80/20 mix of desktops vs 1004s. M-F/8-5, dress code and a fridge in the breakroom to keep your sack lunch cool.

Sounds like this is what you are hoping for. I just watched a Fannie and Freddie webinar on LinkedIn where both representatives admitted that less than 10% of their loans would even qualify for Desktops at present and that Lenders did not quite understand they will be supplying the appraiser with the "floor plan", measurements, etc. With all the big layoffs happening, it's a bust to implement anytime soon due to all the technology on budgets already set for 2023. Implementing all that tech is for the long haul when rates drop again (years), by then they hope appraisers will be fully eliminated for the next big refinance market by any means possible, desktops, virtual reality, perceived bias, whatever. Then your dreams will come true. All other appraisers will be out of business with the exception of you. By the way, 8 to 5 is not how it works now, at least in government appraisal/assessment. There is flex time, 4 day work weeks, work from home days, and people that do work in cubicles go out to lunch with friends and happy hour too. Dress codes are probably not as strict as when you were in house, either. The Millennials wont put up with that crap. I'm also pretty sure minimum wage in California is not $10 for a clerk either. Probably requires a degree too, just not in Physics, that's only if you want to get on at Freddie Mac, lol

 

[George Hatch]

What I'm hoping for? WTF?

The trivial details notwithstanding, you seem to be missing the point - appraiser independence for the mortgage lending assignments is not a reference to self employment; it's a reference to isolating the appraiser as much as possible from interference from the loan origination side of the business. In that respect, anyone who thinks the demise of the AMCs will somehow solve their problems for them isn't using the left side of their brain. There is no scenario where the lenders will be allowed to go back to taking appraisals from mortgage brokers, no scenario where the art of selling appraisals to MBs by cold calling them is going to pay off for them. Those days are gone for good, never to return.

IRL the well being of appraisers is strictly subordinate to the impartiality and objectivity of the appraisal reports and we cannot get that by making appraisers servient to the loan originators, or to the County (when working for the assessor) or any other party to whatever transaction we're appraising for. If we work for an atty we are supposed to be doing so with impartiality and to refrain from acting as an advocate for their interests.

I agree with you that there are bankers in particular who do not want appraisals or appraisers - see tagline below. But if/when there is an appraisal the appraiser needs to be sufficient;y isolated to be able to tell even their own clients "no" if/when its necessary to do that. And leaving appraiser engagement and compensation to be contingent upon whether or not the loan closes - as is/was commonly the case when the appraisers were working for mortgage brokers - is antithetical to getting an impartial appraisal.

And for the last time, just because I can see the trends to move away from appraisals and/or vertical integration doesn't make me an advocate for them. Just because I'm unwilling to indulge in the untruths a couple of people here are constantly pimping doesn't mean I hate appraisers or want them to go out of business. Quite the opposite. Same with PAREA - just because I disapprove of skipping the live supervised experience requirements doesn't prevent me from acknowledging its potential impact of the supply of appraiser productivity. What you are criticizing me for is the same thing I do for my own clients if/when necessary by observe/report what I'm seeing without regard for their preferences.


I've watched appraisers get starved out in the last 2 RE cycles and I expect it to happen again as a result of too many heads chasing too few assignments. Me telling you guys that isn't an act of hostility, it's a kindness. If appraisers are going to get starved out, I want it to be the donkeys who deserve to get starved out, not the people who are trying to do the right thing. I want you guys to thrive as best you can in that environment. But to do so will require some adaptation to the environment as it exists, not constantly mourning for an alternate reality that can never happen.

 

[Lindseyw]

I didn't write most, but I agree most do not have the resources and that isn't a good thing. The big AMCs (I admit loosely defined) who have staff now and will always have staff, handle large volumes of appraisals from cradle to grave. They love the idea of PAREA because they will be able to mint and train (and train the way they want them trained) appraisers at will, in essence controlling the one thing they have not been able to control.

As far as volume, there's a current thread in one of the FB groups so we don't have to wait until the next cycle. A staff appraiser (7 years) with one of the largest AMCs just jumped ship and is spilling the beans. He describes how he was able to cherry pick as many as he wanted to handle until recently, with the rest going to the fee panel. He got bent because he was expected to take anything to keep his volume up once volume overall volume decreased. I'm sure layoffs are coming, but they won't lay all off, it's the panel appraisers who will be ghosted. And several panel appraisers are confirming the lack of anything coming in from that

I knew it! All my easy appraisals went out the window 2 years ago. All of them. ****ty how the AMCs were put in place to provide a safety net for the public…looks like AMC/lender influence could be the next crisis. (At least I hope so)

 

[Tiffany Gibbons]

What I'm hoping for? WTF?

The trivial details notwithstanding, you seem to be missing the point - appraiser independence for the mortgage lending assignments is not a reference to self employment; it's a reference to isolating the appraiser as much as possible from interference from the loan origination side of the business. In that respect, anyone who thinks the demise of the AMCs will somehow solve their problems for them isn't using the left side of their brain. There is no scenario where the lenders will be allowed to go back to taking appraisals from mortgage brokers, no scenario where the art of selling appraisals to MBs by cold calling them is going to pay off for them. Those days are gone for good, never to return.

IRL the well being of appraisers is strictly subordinate to the impartiality and objectivity of the appraisal reports and we cannot get that by making appraisers servient to the loan originators, or to the County (when working for the assessor) or any other party to whatever transaction we're appraising for. If we work for an atty we are supposed to be doing so with impartiality and to refrain from acting as an advocate for their interests.

I agree with you that there are bankers in particular who do not want appraisals or appraisers - see tagline below. But if/when there is an appraisal the appraiser needs to be sufficient;y isolated to be able to tell even their own clients "no" if/when its necessary to do that. And leaving appraiser engagement and compensation to be contingent upon whether or not the loan closes - as is/was commonly the case when the appraisers were working for mortgage brokers - is antithetical to getting an impartial appraisal.

And for the last time, just because I can see the trends to move away from appraisals and/or vertical integration doesn't make me an advocate for them. Just because I'm unwilling to indulge in the untruths a couple of people here are constantly pimping doesn't mean I hate appraisers or want them to go out of business. Quite the opposite. Same with PAREA - just because I disapprove of skipping the live supervised experience requirements doesn't prevent me from acknowledging its potential impact of the supply of appraiser productivity. What you are criticizing me for is the same thing I do for my own clients if/when necessary by observe/report what I'm seeing without regard for their preferences.


I've watched appraisers get starved out in the last 2 RE cycles and I expect it to happen again as a result of too many heads chasing too few assignments. Me telling you guys that isn't an act of hostility, it's a kindness. If appraisers are going to get starved out, I want it to be the donkeys who deserve to get starved out, not the people who are trying to do the right thing. I want you guys to thrive as best you can in that environment. But to do so will require some adaptation to the environment as it exists, not constantly mourning for an alternate reality that can never happen.

Aren't you one of "us guys"? I don't want "Lender select" either. But mortgage brokers still exist, and working as a county appraiser doesn't make you an advocate for the assessor. It is mass appraisal, sometimes values are appealed and corrected when more information is submitted. I assure you I'm adaptable, most appraisers who have had a CR and upgraded to CG have had to be very adaptable, think Terrell Shields. Generation X has seen high interest rates before. We don't scare easy. And a good place to ride out a storm can be the assessment field, though it takes some working on schedule, certain number of parcels per day, etc. The benefits are usually great. 2 of my mentors are Chief Commercial Appraisers at major nationwide banks. There are always options. Jeez don't worry about "us" so much. Not all lenders use AMCs, I promise.

 

[George Hatch]

Is there a reading comprehension problem here? I have never criticized ANYONE for the jobs they chose to take. I'm not one of the morons who think appraisers who work on staff are automatically biased in favor of their employer's desired outcomes. I got trained up in non-res by working on staff for a commercial bank, and it was a good gig precisely because they supported the appraisal function and carefully adhered to the rules for appraiser independence.

And since you seem to think I was born with a silver spoon in my mouth I think you should reconsider. I hacked out plenty of 1004s before I was given the opportunities to expand my skillset, so I "adapted" the same way you did. The only difference is that I pulled my transition off earlier in my career and prior to the inception of licensing.

And yes, I will worry about appraisers who are dependent on the GSE pipelines, precisely because the business is cyclical and because I've seen appraisers struggle through the slow times. I'm not apologizing for remembering what I've seen in the past, not to you or anyone else.