• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Reporter Looking For Help

Status
Not open for further replies.

KatherineLewis

Freshman Member
Joined
Jun 3, 2003
I'm a reporter for Newhouse News Service looking for people to interview for an article on the housing market. I'm specifically writing about the pressures on appraisers to inflate real estate values. Ideally, I'd like to find a homeowner or consumer who ended up in financial difficulty because of a faulty appraisal, but I'd also be interested in hearing from appraisers who are willing to share the details of their experiences on the record. Horror stories, anyone?

I really appreciate your help! Please feel free to contact me directly at 202-383-7821 or by email at [email protected]. Or, of course, you can reply to this post in the forum. My deadline is Monday, June 16, so please respond before then.

I work for the Newhouse chain of newspapers, so my story would be available for publication in any of our roughly two dozen U.S. papers, including the Newark Star-Ledger, Portland Oregonian, Cleveland Plain-Dealer and New Orleans Times-Picayune. For more information, feel free to check out our Web site at: http://www.newhouse.com/

Thanks!

Katherine Reynolds Lewis
 

jeff samolinski

Senior Member
Joined
Apr 18, 2003
Katherine:

Interview some your local lending institutions and ask them:

1- Who chooses the appraiser to use in their company? Is it the loan officer from an approved appraiser
list?

2- Ask if the loan officers are given some type of bonus if they close more than x dollars of loans each
month.

3- Ask if their loan officers are evaluated based upon the number and dollar value of loans they close.

4- Then based upon the answers ask yourself if the system is fundamentally sound or designed to ensure
that adequate collateral is there for each loan or does it semm to be geared around closing deals.

Here is how it generally works with the above system:

Loan officers are given a relatively low base salary. They earn the bulk of their money from a monthly bonus for closing loans over a certain amount each month. They are given a monthly quota or target for the number/amount of loans they need to close to receive an acceptable performance evaluation.

Now, the kicker- They are the ones that get to choose which appraiser to use, thus the pressure is a natural human survival response.
 

Bob Stainbrook

Sophomore Member
Joined
Jan 3, 2003
Copy of the e-mail I sent to Katherine.

Hi Katherine,
I am an appraiser assistant in W. PA. I don't have any specific appraisals that people have lost their home ( that I know of ) but the pressure we get is not a once in a while thing. Every order we receive, and I do at least 10 - 15 appraisals a week, has the
" Owners estimate of value " or the " min. value needed to make the deal work " or if the value stated is not there STOP !!! and call us immediately. What's worse is they want the appraiser to do a comp. search before they will even fax us the order. By the time I do I full comp. search all that's left to do is type it up ( total time with computer software < 1 hr. ). I used to be a mortgage broker and I try to explain to them if a home owner has a 50k first mortgage + 20k second mortgage + 30k on credit cards + 5k in back taxes + want 5k to take a vacation + 10k in closing costs ( includes title work, processing, brokers fee and other closing costs ) doesn't mean that 70k home is worth 120k. Some bank lent them 100% of the value of their home 1 year ago with a total mortgage of 70k ( which I have seen that appraisal for the 20k second mortgage was stretched ). The brokers will refuse to pay for the appraisal or if you don't call them before you finish the above and be willing to take 75% cut in pay for your research ( they call it a trip fee ), you'll never see another order again. I have even had homeowners try to stop payment because the value the home came in at doesn't get them what they want. I have even had homeowners stand there and tell me they won't pay for the appraisal if it doesn't come in a XYZ. We as appraisers try to do our jobs, but there is NOTHING that will happen to the broker if the homeowner goes belly up. I definitely hate big government, but there should be some type of central appraisal ordering system where the orders come from a clearing house by a random computer order and we never even talk to the broker. They order an appraisal, we complete it and that's the end of the process. If this was the way the appraisal system worked, you would see 75% of these brokers go out of business and we wouldn't have another S & L scandal with us the tax payer bailing them out. Thanks for letting me vent. I have 25 voice mails & e-mails to sort out from the brokers needing another 10k on that appraisal that I just sent over.
:eyecrazy:
Thanks,
Bob Stainbrook
Castle Realty Appraisal Services, Inc.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I think it would be very interesting to see the experience level of appraisers working for companies like "The Money Store" and others who were doing 125% equity loans.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Or follow some of the so called 'appraiser' that are sent out from the shops with lots of trainees....

lots of untrained and unlicensed out there right now.
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Katherine:
If you want a story on some people that lost their homes, research the bankruptcy of the 3rd largest corporation in US history to go under and that was CONSECO. They destroyed the manufactured home industry and home market by making inflated loans and tens of thousands of people lost their homes. They ran the biggest scam operation in the country. They would make loans at up to 120% of the properties value, or more, to people with bad or marginal credit. How did they get away with it? Fraudlent appraisals. Some appraisers knew better but some were just inexperienced. What they would do is use fraudlent deals for comparable sales to support another fraudlent sale. I think CONSECO lost $6 billion in about 4 years. The company was broken up and sold at auction recently.
Here is the way the real estate scam operation works: If you will check most of the high rates of property appreciation takes place in big cities with a lot of property turn over due to people moving in and out. A home sells in 2000 for example at $100,000. In March of 2003 they decide to sell and call their Realtor. The Realtor asks what they paid for the home and are told $100,000 in 2000. Here is the way Realtors determine the sale price: Properties in this market go up at the rate of 5% per year, so the subject property is worth $117,000 now so that is what we will sell it for. Then the appraiser comes along and comes up short on the appraisal so to make the deal work they make a time adjustment. What is a time adjustment you ask? Well they reason, if prices are going up 5% per year and I come up $4,000 short on the appraisal, then prices must have gone up by $4,000 since the comparable sales were sold, so I will add $4,000 to my appraisal and the deal is made. Where did all of the price increase percentages come from? Right out of the blue. That is what keeps the system running. Nobody would pay a Realtor's commission if they thought that money was coming out of their pocket. If the appraiser comes up short, he/she gets no more work.
If you wonder why appraisers don't report some of these lender abuses, the answer is that there is no agency to report them to. On the other hand, they can report the appraiser to their state appraisal board in a New York minute and they will be investigated for sure. Lenders use this threat as leverage.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Katherine,

Here's a link to our Appraiser's Petition. Please read it and you will have a better understanding about the concerns we have.
Bear in mind that many appraisers won't sign it because they are afraid that lenders won't send them work if they do.

http://appraiserspetition.com/


Thank you for taking the time to research our side of this business.

Dee Dee
 

hal380

Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
Hello Katherine;

Would you please be sure to post here where we can locate your article once it is published?

Thanks in advance, and good luck

Hal
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
Katherine,

This may require a few days of travel that I am sure your employer wouldbe willing to pick up, but I have a good idea for you.

Why dont you travel to a few state's Appraisal Board meetings. You will see the complaints filed against some of these people and the actions taken agaisnt them. Florida has a good web site that you can see wht the outcome was. Perhaps if you saw and heard first hand the complaint, the results of the investigation, etc, you would be able to see a small slice of what has happened.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks