TAF's Industry Advisory Council

[George Hatch]

If you could go back and read what we were posting here 5 years ago you'd see that a lot of appraisers have shared your concern all along, including most of the veterans. Although most of them don't surf, they could all see the tsunami building on the horizon.

According to the chief enforcement officer at my state regulator (California's OREA), it costs my state about $50,000 to duke it out with an appraiser in court if they decide to fight an administrative decision. And for some reason, it seems like our worst offenders are the people who are quickest on the draw with their attorneys when they get caught.

Government enforcement of our professional standards is the least effective and most expensive way to get things done. That's why going for the revocation is usually reserved only for the worst of the worst.

One of the things we were working on in conjunction with the HVCC was with respect to the provision in it that would have required the GSEs to fund the IVPI, which was to be charged with reviewing 10% of all the appraisals used by the GSEs. I don't know what's going to happen with the HVCC or if there will be an IVPI, and if so who will end up running it, but the Dodd/Crowley group did put together a pretty ambitious proposal for the review end of it.

Our proposal included a centralized vault to ensure the availability of the original report in its original format, an ongoing review function by local reviewers that would not only review those reports against the applicable requirements but would maintain a running talley of each appraiser's average score.

I think it's safe to say that if for some strange reason the GSEs really did run an IVPI that looked like our proposal that the skippys amongst us would soon be motivated to either clean up or get out. And by "get out", I mean leave the residential appraisal business as a result of working themselves off the GSEs accept lists.


The thing is, no matter what measure any of us propose, our society has to come to recognize the value of those measures before they'll fund them. Nothing short of that widespread acceptance will stick because the temptation to cut corners that these lenders face when times are good is overwhelming.

Many people bemoan the damage to our economy that this widespread avoidance of diligence has enabled. Few groups are more angry about that than appraisers. Personally, I think it's great that these losses have come up because it highlights what we've been saying all along. All through the 20th Century, everytime there was a big meltdown in the markets the appraisal profession got more attention and more support for what we have been trying to do, which is to level the playing field for everyone involved in these transactions. I expect that the pendulum will swing back in our direction this time, too.

That's why I am optimistic for our future. That's also why I've been trying to prod people into spending their efforts supporting the measures that speak to the underlying problems rather than the superficial symptoms.

The worst thing about the way this HVCC thing has gone has been the length of time it has spent on the back burner. The uncertainty is what has given these AMCs the room to monger their fear tactics on our clients. Had the proposal been either enacted or rejected by now we'd be in a better position to develop a functioning response. As it is now, all we've been able to do so far is spin our wheels and fret over what the opposition is doing. That's not a plan.

 

[moh malekpour]

The least TAF can do is to raise a RED FLAG and let the public knows that its standards are not followed and practiced. It should send a letter to OCC, OTC, FDIC, NCUA, the US treasury, the Federal Reserve Bank, the Legislators and any other agency or institution that TAF considers public and users of appraisals warning them of the failure in practicing USPAP standards for Federally transaction mortgage financing appraisals. The failure to do so is going to be a detriment to USPAP credibility and honest appraisers who want to comply with USPAP standards. This warning may raise a question in how to repair the system and what would be the best alternative. To keep quiet and complaisant and let the status quo keep going as if every thing is just fine is not going to solve any problem.

 

[JSmith43]

The uncertainty is what has given these AMCs the room to monger their fear tactics on our clients. Had the proposal been either enacted or rejected by now we'd be in a better position to develop a functioning response.

Appraisers need strong arguments and unforgettable slogans and sound bites in order to magnify their limited visibility. The primary tool appraisers have is their ability to communicate, because they certainly don't have organized pools of substantial money to throw at politicians.

Systems that concentrate power present vulnerabilities to the so called safety net of appraisals as part of financial due diligence. Power tends to corrupt, and when it is concentrated, the corruption can be more costly.

This is unfair to some AMC's, no doubt, but, think of them as organized bacteria that set the requisite conditions for rapid tooth decay.
Every morning and evening we brush our teeth to disorganize the bacteria (love that Sonicare!). Every chance we get, we should defend the independence of appraisers by keeping at bay, those that would organize (control) them.

It is simply a safer system, one made up of individual, independent appraisers. Cats can't be easily herded and same goes for independent appraisers.

That's my argument. Sound bites, anyone?

 

[Dutchman]

The least TAF can do is to raise a RED FLAG and let the public knows that its standards are not followed and practiced. It should send a letter to OCC, OTC, FDIC, NCUA, the US treasury, the Federal Reserve Bank, the Legislators and any other agency or institution that TAF considers public and users of appraisals warning them of the failure in practicing USPAP standards for Federally transaction mortgage financing appraisals. The failure to do so is going to be a detriment to USPAP credibility and honest appraisers who want to comply with USPAP standards. This warning may raise a question in how to repair the system and what would be the best alternative. To keep quiet and complaisant and let the status quo keep going as if every thing is just fine is not going to solve any problem.


Well said. The noise generated by the appraisal governing bodies is conspicuous by its absence