According to AAR 1 out of every 5 reports is being reviewed. I'm seeing more and feel that to some extent the number is twice that.
Today we have the electronic review, used by most AMC's and the in house person that does his little 21 circles and if it's too bad sends out to the field.
We are quoting higher fees and still get daily request to do field reviews. Last week I was told that some appraisers are making a list of lenders that have nearly every job reviewed and taking them off their list of approved lenders. I asked this person, if he was afraid to be reviewed and his reply was "why ask for trouble" I can see his point.
Foreclosures, oh yes seeing more, bankruptcies are up too. This is a hard part of our buisness but they have to get done and we don't turn them away.
I have always done many reviews monthly, but over the past 2 or so months, just about every report has such serious flaws that a new grid is necessary. From my not being able to find any verification of the sales used, to values $50-$100K above the listing price. How can someone ignore a listing at $189,000, dropped 3 months later to $174,900 and then expired because no offers arrived, and then appraise the property at $239,000? Of course, that was the "sales price". This is one of those cases where I did call the appraiser (this was a topic last week) and asked to have the P&S faxed over. Seems not only did I not receive it, but the broker who had the listing expire in September had no idea of the P&S sale which was as of July. Seems as though she is due a commission! I do not know if this is just a coincidence, or if the lenders are carefully examining reports which either are not well written or supported or the photos display something that the report does not address and therefore they need another opinion. Notice to appraisers: if the property in the photos appears to be something other than described, be very explanatory in the report. More is better today than less in these reports.
Appraisal fraud is much higher than anyone thinks or suspects. It seems that we want to turn a blind eye to our own problems. I think every appraisal should be desk reviewed and upgraded to full field review if the desk review uncovers problems. All you have to do is come in low on a property and you will get faxed the "number hitter' appraisal from last year or the appraisal from down the street. I do quite a few reviews and see many more questionable reports when I don't hit the number. Appraisers are digging a whole that we may not be able to climb out of. I actually had a loan officer today tell me that her "underwriter" told her to have me use comps over a year old to get the desired number for a borrower's refi. I tried to explain that I could not use old sales because there were current sales available that represent "today's market" that does not support that kind of value. She basically told me that if her underwriter says there is nothing wrong with it, I should do it. That assignment is now going to Joe Number Hitter, because they are going to do the loan despite my opinions.
Just had the same experience. Property on the market for 2 years at 145K and 140K. Rec'd one offer at $130K one year ago. Did not close. I appraise two months ago for a refi and fall short of $130K, prop owner says it's worth $170K, even though she can't sell it for $140K...But, she has 2 reports from sois-disant appraisers at $169K and $172K. Lender still wants to make the deal. I'm outta the picture, send in the number hitters.
This kind of ridiculous crap goes on all the time and the honest professionals who correctly report on the market are slandered, libeled, denigrated and blackballed. Then the repos start to hit and we're called in to give them accurate estimates of value on their REO properties. Then the lenders complain to the feds that the appraisers got'em into trouble again with fraudulent appraisals and here comes more regulation, more widespread use of AVMs and more bogus press releases from fannie mae stating that over 90% of appraisals meet or exceed sales price...and next thing we know, we're in the ditch again.
When are the feds going to get to the heart of the problem? Loan officers paid commission only are the primary source of pressure to inflate and they're the ones who hire the number hitters...but the banking and lending lobby will sacrifice us to protect themselves every time. It's happened before and it's coming again.
James, ..... I ought to just copy all of the text of your post....and then put my name on the heading ! Despite all we have read, and said, here in the Forum about our collective experiences with the coercion, the arm-twisting, the deception and the fraud, and the other examples of appraisal garbage we are shown as being "good" representations of a portrayal of solid value in our market area....not much has changed. The Fed does not really care, most States do not really care, most clients would never turn-in a bad, misleading and sloppy report.....they just order a review and expect other appraisers to do any "police" work. Like another Poster said today...."They just need our signature" and all becomes good again. All the while, we see the rapid erosion of any respectable fee structure and we (I) get numerous calls from individuals inquiring ...."are you hiring ?", as they are about to take appraisal classes or just got their license. I always ask them what has motivated them to choose this profession and WHO suggested appraising to them. I've probably had about 3 dozen callers in the last year and 80% of them have a friend selling real estate who suggests it. Still trying to figure that out....get a check at closing for $3,500...$5,000....$7,300....$11,200.....and instead many will succumb and agree to $175 for a 1004 and call that makin' good money. Sorry, remaining positive 7 days a week is a definite challenge.
Just about everyone that post on this forum agrees with all the problems. How many are writing to other places other than just this forum? Or have signed the petition & fiqure that's good enough? How many have gotten the HONEST Mortgage Co's & Real Estate Agents to sign & comment? The REO's are increasing & elections are coming up. This is the TIME to WRITE & ASK as a candidate are U aware of --Predatory Lending---Pressure to get Values so those that are struggling can struggle more --- Creative Financing ---OR fill in the blanks.