Senate discussion of 2452 today.

[timd354]

This stupidity will lead to the rise of the every other year real estate appraiser. For example my wife is a licensed appraiser who has not worked in the 2 years since the birth of our son. If she appraised properties next year, she will have no bond requirement since her total volume of appraised properties in the prior year will have been $0. I will then do no appraisals next year and the year after will have no bond requirement since my total volume in the year prior to that time will be $0. I am fortunate enough to have a spouse who is a licensed appraiser who has taken time off to raise our son, but I am sure that many others without a licensed spouse will come up with inventive partnerships, etc. with other appraisers to get around this silly requirement.

 

[William K]

I am sure they will come up with a minimum bond amount, just to make certain that appraisers are reporting correct/ minimum amount of appraisals and values.

 

[rcsone]

......payment for services agreed to and as performed by an appraiser does not entail return of fee if loan does fails through........there would only be liability for performance and,, therefore, bonding required with consumation......sorta like a pregnancy after the act could cause liability, but the act itself could just be considered practice without the pregnancy with pre-payment agreed to and accomplished in advance....best to all............rs

 

[stefan olafson]

I've taken the time to send a letter to each of the senators from my state asking them to remove the bonding from the bill. I told each that it will drive out more appraisers and increase our costs as our income is declining because of people like Anthony Mozillo!

BTW - Kent Conrad received a 1% writedown on his up front costs on a vacation home in Deleware. He's being quite strident that he had no knowledge of it when it happened.....

This from the former ND Tax Commissioner and one of the smartest people in the Senate?????

 

[PropertyEconomics]

......payment for services agreed to and as performed by an appraiser does not entail return of fee if loan does fails through........there would only be liability for performance and,, therefore, bonding required with consumation......sorta like a pregnancy after the act could cause liability, but the act itself could just be considered practice without the pregnancy with pre-payment agreed to and accomplished in advance....best to all............rs

I doubt an attorney would agree with you. The bonding requirement says what it says .. if you seek payment for your services they have to be bonded.

 

[timd354]

I am sure they will come up with a minimum bond amount, just to make certain that appraisers are reporting correct/ minimum amount of appraisals and values.

That is possible, but that is not how the legislation is currently written. Besides, I am sure that the minimum would be far less than the bond which would be required based on my volume. I appraise in and around Washington, DC and I am sure that the average value of a property that I appraiser is likely over $500,000. Thus, even in a slow year of 200 total appraisals, my dollar volume under the proposed law would be upwards of $100 million, requiring a bond of $1 million or more. In a busy year of 400 total appraisals, my dollar volume could be expected to be over $200 million requiring a $2 million bond the following year. A $1 million bond will likely cost $40,000-$50,000 and a $2 million dollar bond $80,000-$100,000

Thus, the combined bond costs for 2 appraisers with this kind of dollar volume could be on the order of $200,000 per year. How about a firm with 5-6 (or more) appraisers? Their combined annual bonding costs could be over $1 million per year!!!

The solution for the appraisal firm (especially the large firm) will be easy.....each year one-half of the appraisers will be inspection machines, while the other half will be report writing machines (with of course the inspecting appraisers signing the reports, hopefully after reading and making changes to anything they do not agree with). The next year, the roles will be reversed. By going to an every other year appraisal arrangement, even if a minimal bond requirement is imposed, would result in huge cost savings and this model of business will undoubtedly come to dominate our industr if this legislation goes through unchanged. This type of arrangement will save such a huge amount of money in bonding costs for mutiple appraisers, it will have a huge competitve advantage over other business models and, as a result of this advantage, this business model will become the dominant business model in the industry. The sole practioner, once again, will be crushed as a result of the competitive inbalance.

This is the kind of perverse result that occurs when idiots in the government (the Congress) come up with regulations for an industry that they clearly do not understand. But, they will be able to hold their press conferences and declare that they have cleaned up the real estate mess and rescued the American people.

 

[Elliott]

Always fun to speculate on something that is totally new with no track record.
I think to apply for Dodd Bond Insurance you'll have to give them a list of
all the appraisals you did last year or for 3 years and then you'll probably
have to update them ever 3 months. Oh, and of course, there will be a
provision if any of the information you submit has any error then you are
considered to be fraudelent and misleading and all benefits, payments, and
disbursements from said policy are void and non-payable, go directly to
jail in accordance with criminal code.

 

[Mystery man3]

Better than the status quo

Anything is better than the status quo or or the AMC's having a monopoly on assignments. The bond may be a good alternative.

 

[timd354]

Anything is better than the status quo or or the AMC's having a monopoly on assignments. The bond may be a good alternative.

How does the proposed bond requirement change the AMC monopoly? I don't see how it would change that.

As far as the status quo, it stinks, but that does not mean that it cannot be made worse.

 

[lisagruhot]

How does the proposed bond requirement change the AMC monopoly? I don't see how it would change that.

As far as the status quo, it stinks, but that does not mean that it cannot be made worse.

You are correct it doesn't change anything about the AMCs. They are two different issues and two different bills. They are considering both of them not considering the bond instead of using AMCs.

I agree that the status quo does stink, but I do not agree that anything is better than nothing. We do need something that is for sure, but it has to be the right thing.