Publish Appraisal as Public Record??

[William Rightsell]

Hello all,

I am sure this has probably been discussed or batted around in some form before, but I wanted to run this idea by the good folks here on this forum.

I thought about this the other day and the more I think about it, the more I think it may be a way to help clean up this mess of an industry.

If the appraisal report were recorded as public record along with the deed of trust/mortgage docs at closing, a LOT of the crap that appraisers are pulling would stop. I cannot tell you how many times I have had an appraisal (with names redacted) faxed to me to prove I'm an idiot and dont know what I am talking about! Or the lender/broker/borrower has an appraisal that they tell me about but will not provide a copy of it - for obvious reasons.

Appraisers know they can hide behind the "confidentiality" shield and get away with almost anything, because the broker and/or loan officer involved will keep silent also. After all, most work on commission and will do/say damn near anything to close a loan. If the appraisal report were made public (after closing), then this crap would stop.

I know there are those that are going to say that the information in the report is confidential. That may hold weight BEFORE closing, but what in the report is confidential AFTER closing?? The new owners name, price paid, date of sale, lender, loan terms, etc. all become public knowledge after the sale. The property specifics (assesor/tax records) are public knowledge BEFORE the sale/refinance. So what is left after closing that is confidential?? Other than the appraisers' name and appraised value, I cannot think of anything.

I'd like to hear more thoughts on this subject - I'm sure there are things I haven't thought of or considered, but it seems like a pretty logical and easy step to me to clean things up. Nothing like the light of day to make folks do the right thing!!!

 

[Pamela Crowley (Florida)]

Personally, I really like that idea. The rest of this thread is going to be very interesting though.

At the very least, the name of the appraiser and possibly some of the basic data from the appraisal should be there. Maybe not the whole report.

 

[xm4yb7]

My main issue is the data provided in the report. We spend a lot of time and money researching transaction data and financials beyond what is in CoStar, Loopnet, etc. Other then wages, information is by far our biggest expense. Making our reports public would allow someone to see all our data for free. Without the expense of data collection, they could underbid the appraisers doing all of the legwork.

 

[Bob Ipock]

There is a Select Committe in the NC House woking on a "foreclosure bill". One of the primary issues will be that all parties involved in a loan for a real estate transaction. The names of the agents, lenders, appraisers, closing attornies......etc. will all be published and recorded so it will be easy to see who the players were.

I have not heard of any plans to actually record the entire appraisal. Thuis is scheduled to be introduced in the next session ...Jauuary of 2007.


Read this.


http://www.charlotte.com/mld/charlotte/news/special_packages/foreclosure/14505444.htm

and

http://www.charlotte.com/mld/charlotte/news/special_packages/foreclosure/

 

[William Rightsell]

My main issue is the data provided in the report. We spend a lot of time and money researching transaction data and financials beyond what is in CoStar, Loopnet, etc. Other then wages, information is by far our biggest expense. Making our reports public would allow someone to see all our data for free. Without the expense of data collection, they could underbid the appraisers doing all of the legwork.

I dont think that would be such a huge issue. After all, the data you have accumulated outside of data providers is still available to anybody that wants to assemble it. You did. Sure, you may make it SLIGHTLY easier for a third party to see it, but unless they have the time/inclination (and permission/resources) to download/save/accumulate/analyze data for ALL the sales recorded, a single transaction wouldnt do them much good. And if they are big enough to consider doing that, they probably have already subscribed to or operate an AVM and have the data anyway.

The beauty of making the report public would be so that an appraiser who KNOWS there was fraud/hanky-panky involved in a deal could later prove it or make some effort to report it and clean this mess up. They could simply go to the Register of Deeds and get the report (usually the SECOND report done)and see if it merits further investigation or action. I have had many cases over the years where this would have come in very handy. I refused to do what they wanted or came in low - they ordered another appraisal from the town Skippy, and use it to fund a loan. If that report were on file, I'd at least have some recourse given the fact that usually I lose a client over these deals!

I have appraisals thrown at me all the time with black magic marker all over them that are absolutely fraudulent - and the lenders won't tell you who did them!!! That way they can use the same guy again!

It's gotta stop. I think this a good start...

 

[Stephen J. Vertin MAI]

To add to what Kyle is saying, which I may add is a very good point, is the fact that commercial reports carry considerable confidential data such as rents, operating expense and many time tax return information. If business value is provided you have said business information and if you value the FF&E it would allow thieves an inventory list. Further it would give them a layout plan of the building. However, It might not be a bad idea for residential with the exception of providing potential burglars with escape routes. Further, if the people had children no one would want to provide some child molester with the location of their bedrooms.

Steve Vertin

 

[Caligirl]

Another consideration with commercial appraisals being public, and possibly other appraisals being public, is doing this in compliance with the Graham/Bliley act. That alone may require so much deletion that there wouldn't be much left to look at.

 

[Stephen J. Vertin MAI]

Sure, you may make it SLIGHTLY easier for a third

You must not be in the commercial business sometimes it takes days to get accurate income information.

Steve Vertin

 

[William Rightsell]

Sure, you may make it SLIGHTLY easier for a third

You must not be in the commercial business sometimes it takes days to get accurate income information.

Steve Vertin

Steve,

True, I am not a commercial appraiser. The post was oriented towards residential lending work, which is what many on this board practice. Obviously, there are different concerns about commercial work and much more confidential data.

As far as residential goes tho...there isnt anything that is confidential except for the appraisers name, comps used, adjustments made, and value. The rest is public.

 

[Bill_FL]

I would not have a problem with non-confidential, re-statement of facts in appraisals being made public. The product I sell is research, analyis and opinions. I want none of that being made public record. I get paid for that.

My question is who does the redacting? For me to be comfortable with it, that would be me. Who is going to pay me to sit there with an ink marker?