PAREA program

[Surf Cat]

Ethically Driven Appraisals LLC.

AAA Ethically Driven Appraisals LLC.

There.....now you'll be at the top of the heap in Google searches.....

 

[J Grant]

IMO the level of morality and wisdom and restraint and compassion and all that are not among the factors that changed. I don't believe the lenders were more moral before and less moral after. I believe they have acted consistently all along. That's the same reason I believe they will continue to act as aggressively as their options will permit if/when additional prohibitions on their conduct are imposed upon them.

I don't believe in the existence of the compassionate and socially responsible lender. not to any significant extent. I believe in the prevalence of more-prudent vs less-prudent. I think it's mostly just business.

IT is a matter of ethics, not personal morality ( though the two can intersect )
There are professional ethics in USPAP and in lending regs and RE brokerage as well. How much the regs are enforced and who the individuals are and their standards matter as well. For some it is about upholding the ethics and still doing a good business, for others it can vary per their tolerance for pressure etc - while others have no compunction about hurting customers and committing fraud and violating the ethical standards - figuring if later on they lose their license or get slapped on the wrist with a fine it was worth it.

 

[George Hatch]

I think you might confuse morals ( what people should do, be better) with ethics - USPAP has a set of ethical standards, not moral standards. Same for other professions. The problem is that appraisers are often punished for acting like appraisers - fulfilling a neutral umpire role /

The fact that the AMC firewall is a fail, with just as much or more pressure to "make value" than in the bad old days is a travesty. An argument that if it made things even 10% better is worth it is ridiculous. Appraisers who fear work being cut off if they come in "low" on more than rare occasion cn not function in their intended role. Many try the best they can within that capacity, others have given up and just want to collect a fee, others simply will not accept mortgage lending work because of this conflict of interest. Teh same might apply to commercial but there is a much wider client pool and type of work available, making it easier to say " no"

Having AMCs engage in the demoralizing practice of fee bidding to "win" an assignment contributed to the appraisers' lack of confidence in standing up to these all-powerful clients who control a large portion of work. RE agents and lenders do not have this problem—their potential customers are thousands and even hundreds of thousands of consumers and buyers.

There are some clients who are more ethical wrt dropping appraisers for not hitting value and most of them are not operating in the AMC order pieple tohgh to be fair some direct order lenders or lenders who own a captive order AMC can be no better.

I'm referring to governance. Not to ethics in the generic context. Governance is not just limited to establishing the benchmark but also to the extent they will actually enforce those benchmarks.

Speed limit on the highway is 65mph. The prevailing traffic pattern is usually running at 75mph or 80mph. The reason for the disconnect is that - ethical considerations aside - most drivers assume they don't have to worry about enforcement until they stick their necks out to the extreme. The limit legally enables the cops to enforce that limitation at their discretion, and upon occasion they do ramp enforcement up; like during the holidays or when a local stretch of highway gets too fast due to too many offenders taking additional liberties.

Now we can argue that the 65mph is aspirational in nature and that the prevailing 75mph flow of traffic represents a moral failure among the drivers, or we can argue that the legislators recognized that regardless of where they put the number a certain percentage of everyone will run 5-10mph faster - so they accounted for that by sandbagging the limit. Pre-loaded in anticipation of human nature, if you will.

One strategy speaks to the aspiration that its reasonable to expect mass compliance with the one speed limit because as humans "we're better than that". The other strategy speaks to the recognition of human nature that in fact we are not "better than that".... but that we "are that".

In my personal relationships I try to refrain from expecting people to exceed their personal limitations. That only leads to frustration if/when they fail to exceed their personal limitations. In our professional standards its important to establish minimums that we can reasonably expect everyone to be capable of meeting, and refrain from establishing (aspirational) minimums nobody is capable of meeting all the time. In our standards the first step of establishing professional credibility starts with an appraiser establishing expectations they can actually meet, and not overpromising.

 

[George Hatch]

I'll add one more thing; wherever the prevailing pattern of conduct lands, 95% of the enforcement of those benchmarks occurs at the individual level. The individual choosing to comply at that level, usually in furtherance of their own interests. External enforcement at the govt or interpersonal level is more costly in terms of time/effort and such. Depending on what an individual is actively attempting to do, the cheapest and easiest and simplest way to resolve a problem is to avoid the problem in the first place.

 

[J Grant]

I am not alone in this thought that when the individuals in a profession get punished financially for practicing within the ethical standards, Houston, we have a problem.

 

[George Hatch]

There's nothing unethical about accepting or performing appraisal assignments for an AMC, if that's what you're driving at.

If you're going to draw the line at client conduct then the AMC-users aren't any more ethically pure than the AMCs they select to manage their process for them.

 

[J Grant]

There's nothing unethical about accepting or performing appraisal assignments for an AMC, if that's what you're driving at.

If you're going to draw the line at client conduct then the AMC-users aren't any more ethically pure than the AMCs they select to manage their process for them.

That is not what I am driving at , at all.

The problem is not being accepted or performing an appraisal for an AMC, a lender, or anybody. The problem is after all these yeas, there is still no firewal wrt pressure to make value or not reporting adverse property conditions. I bring up AMC 's because their supposed reason post HVCC was to be a firewall, and it is a fail .

 

[George Hatch]

Okay, I'll play the other side of that observation......

If there's pressure on an appraiser who is engaged by an AMC to (for example) over value a property or to not report adverse property conditions, where exactly would you say is the origin of pressure is coming from?

 

[Mejappz]

That is not what I am driving at , at all.

The problem is not being accepted or performing an appraisal for an AMC, a lender, or anybody. The problem is after all these yeas, there is still no firewal wrt pressure to make value or not reporting adverse property conditions. I bring up AMC 's because their supposed reason post HVCC was to be a firewall, and it is a fail .

I agree—and now it's even worse, because AMCs can essentially run their own sweatshops. That creates the exact kind of antitrust issues the current regulations were meant to prevent.