The Decline of the Appraisal Industry: An Unsustainable Future

[Mike Ault]

It almost makes one wonder how the banks worked and how people managed to buy a house pre-F/F?

I thought we were talking about S&Ls?

The Savings and Loan (S&L) crisis was a financial collapse that occurred in the United States in the 1980s and 1990s, resulting in the failure of nearly a third of the nation's S&Ls. The crisis was caused by a combination of factors, including:

• Interest rates
  Interest rates rose dramatically in the late 1970s and early 1980s. The federal government set the interest rates that S&Ls could pay on deposits, which were much lower than what could be earned elsewhere.
  
  
• Mortgages
  S&Ls primarily made long-term fixed-rate mortgages, which lost value when interest rates rose.
  
  
• • Deregulation
    The federal government deregulated the S&L industry in an attempt to help it grow out of its problems, but this led to even more severe issues.
  • Fraud
    Some S&L executives, such as Charles Keating, defrauded investors by selling them high-risk bonds as safe investments. Keating also gave money to US senators to influence regulators to overlook Lincoln Savings and Loan Association's illegalities.
  • Speculation
    Banks took on too much risk with too little capital on hand.

The S&L crisis resulted in a taxpayer-funded bailout and regulatory reforms in 1989. The total cost of the crisis was $160 billion, with taxpayers bearing $132 billion of that cost.

s&l crisis summary - Google Search

 

[Fernando]

Some may be generous, but I am sure most of them wanted to be on my 'good side'.

Or my Bro' Appraiser knows how to get me in trouble if I can't get the value he wants.

 

[BRCJR]

Or my Bro' Appraiser knows how to get me in trouble if I can't get the value he wants.

or you are being set up for accepting a bribe.....

 

[Fernando]

or you are being set up for accepting a bribe.....

A bribe? My Bro' is helping another Bro'.
I thought I was only appraiser carrying Bejamin Franklins.

 

[IlliniApp]

While there are a number of gay guy hairdressers, some of that is a stereotype. I have known a number of straight male hairdressers over the years (( come of them were married). Even a mediocre stylist can do well, and a talented one, especially in an urban, high-priced area, can do extremely well.

My daughter cuts hair and moved from the Quad Cities area where she made very little to Atlanta, where she is doing quite well. Thank goodness.

 

[Tom4value]

As I have said any times, wean yourself off of AMCs! They were created as a “go between” between appraisers and lenders with the intent of eliminating pressure on appraisers and improving the quality of appraisals.

In practice, they do neither. Reduce pressure? Please! The lender tells the AMC to do this and that and the AMCs just pass the instructions on to the appraiser. Those 6 page letters of engagement? Created by the lender. Hoping the AMC will go to bat for you on ridiculous stips? Forget it!

Improve quality of appraisals? Nope! The best they do is give a non-appraiser jamoke a punch list to “review” an appraisal. Report can be crap but as long as the boxes are checked, it goes. They grade appraisers on accepting the lowest fee and fastest turn time.

Go after the lenders directly. They use a portal and if small enough, give you orders directly. The full fee they charge the borrower for the appraisal goes directly to you, minus the portal fee that is a tax deductible business expense.

“It’s hard!” Yeah, but it is worth it. I got rid of my last AMC during the Covid crunch. Felt good to tell them that with the volume I had, I couldn’t do their BS for peanuts.

 

[Mark K]

I thought we were talking about S&Ls?

And banks, mortgage lenders in general.

Contrary to what some seem to believe...it is possible to have a reasonable and functional mortgage lending system that doesn't rely on F/F.

The vast majority of the first 6,000 +/- appraisals I completed were for banks and S&L's that did not use F/F.

 

[sputnam]

The Decline of the Appraisal Industry: An Unsustainable Future

I did my first appraisals in 1985. I've been hearing that appraisers and the apprasial industry were doomed the entire time. I guess, if someone keeps claimin our demise, eventually they might be right.

 

[Non Sequitur]

And banks, mortgage lenders in general.

Contrary to what some seem to believe...it is possible to have a reasonable and functional mortgage lending system that doesn't rely on F/F.

The vast majority of the first 6,000 +/- appraisals I completed were for banks and S&L's that did not use F/F.

Times have changed. If a 30 year mortgage were attractive lenders would offer them, so how many outside of the GSEs do? I've asked the question and the community bank I worked for just couldn't tie up the money for 30 years, and servicing anything beyond 5 years or so is a flat-out loser per my CCO.

As far as the decline of the appraisal industry, take a look at the appraisal org membership numbers and that will give you your first comp.

 

[Sadie]

Times have changed. If a 30 year mortgage were attractive lenders would offer them, so how many outside of the GSEs do? I've asked the question and the community bank I worked for just couldn't tie up the money for 30 years, and servicing anything beyond 5 years or so is a flat-out loser per my CCO.

As far as the decline of the appraisal industry, take a look at the appraisal org membership numbers and that will give you your first comp.

You are overlooking a key issue. A 30 year mortgage ties up a banks assets for 30 years. When interest rates go up, banks lose money on their lower interest rate-bearing mortgages. They are forced to pay depositors more in interest but, with a fixed-rate 30-year product, they can't adjust their loan portfolio to compensate.