Senate discussion of 2452 today.

[Elliott]

It would just change the way appraisers bid jobs.
"The fee is $zzz, COD, plus the cost of the Dodd
Bond, to be paid at closing." No closing, no Dodd Bond.

HO will be calling the LO and Realtor and yelling,
"What the shxx is a Dodd Bond?"

 

[Couch Potato]

Also, some posters have said that bonding is not like insurance that pays a settlement but more like a loan that pays the claimant but has to be repaid to the bonding company. And that the bonding company will require that the appraiser have assets at least as great as the bond in order to even qualify for being bonded. That is, in addition to paying the cost of the bond, the appraiser must have a certain level of assets.

In other words the value of being bonded is that the bonding company has verified in advance that the appraiser has enough assets to make good on claims. That would knock out many more appraisers.

In many cases it would only take one claim against a bond to bankrupt many more appraisers and cause them to become unbondable.

Only if the appraiser failed to have appropriate insurance or committed outright fraud. As can readily be found in posts here on this forum, many appraisers don't worry about being sued form mistakes they make or harm their work caused because they have no assets and are not insured. The reason bonding is being proposed is the large number of appraisers with no assets and no insurance. In a service industry where an error has the potential to cause great harm the providers of the service should be able to make amends for the harm they have caused; not walk away unscathed. From the standpoint of the good of the public, bonding makes sense.

 

[lisagruhot]

Only if the appraiser failed to have appropriate insurance or committed outright fraud. As can readily be found in posts here on this forum, many appraisers don't worry about being sued form mistakes they make or harm their work caused because they have no assets and are not insured. The reason bonding is being proposed is the large number of appraisers with no assets and no insurance. In a service industry where an error has the potential to cause great harm the providers of the service should be able to make amends for the harm they have caused; not walk away unscathed. From the standpoint of the good of the public, bonding makes sense.

So why not just require insurance? I have always had insurance and never had a claim. Some of these lenders caused this enviornment and the way things are now, and some of these losses are due to bad decisions on extending credit and not just fraud.

There are many homeowners also that pressured appraisers that now claim they were injured knowing full well what they were doing. Should we also bond homeowners?

I am just saying that yes there is a ton of fraud and the people that participated in it or encouraged it should get what is coming to them, but why should appraisers that struggled to do the right thing have to go out of business so that the appraisers who played ball and have the money and have the assets be rewarded?

 

[Couch Potato]

So why not just require insurance?

Certainly an option, but a bonding requirement is much easier to regulate on a national level.

 

[Michigan CG]

So why not just require insurance?

Insurance does not cover fraud.

 

[PropertyEconomics]

The bond requirement was removed from the legislation!!! But don't let me stop you guys!

One day Pete you will learn how to read. It must be how you have "acquired" such great investments as have been shown in other threads. Laugh all you wish .. the bonding provision remains in the bill.

 

[Couch Potato]

The S2452 discussed yesterday did not have the bond requirement in it. I suspect you are looking at the original dated December 2007. I'll skip the giggles this time.

I suspect you are going on rumor rather than the official records provided by congress. Nothing in the bill has changed since its introduction 12/12/2007. Some discussions have occurred about taking the bonding provision out, but no amendments have yet been made. There is some alternative legislation, but s.2452 still contains a bond requirement.

 

[Elliott]

Pete said, The S2452 discussed yesterday did not have the bond requirement in it.

Prove it!

 

[PropertyEconomics]

Pete said, The S2452 discussed yesterday did not have the bond requirement in it.

Prove it!

Pete says lots of things.

 

[rcsone]

....the bond amount and its corresponding fee structure would be porportional to the dollar risk.......the bond amount would not have to cover the entire amount of the appraised value........after all none of could miss an improvement 100%, could we?......for example, each $100,000 of valued amount which should have some relationship to sales price would require a $5000 bond whose cost would not be 3% to 6% per $100,000......the "public trust" difference would be that those who had any history of a proven malfeasence would find their bonding fees increasing or not available for purchase......just like liability insurance with a good vs. bad driving record and/or resulting claims..........now the market has the "performance tester" and its resulting enforcement by the costs to the perpetrator......the states appraisal boards could continue to do the near "staffless" works and if there were non-functioning boards, the insurance man could get the crook after ONCE...........
and I still say bring on the bonding, jail and/or fines, increased educational requirements, earned experience, and product history examinations as real judgements for appraisal quality......not just a copy of a license and three completed appraisals as being "qualifiers for work referrals......the illegal have always won without resulting, earned punishments' application....best to all........rs