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This may be the straw to break the camels back

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David E. Coley

Thread Starter
Freshman Member
Joined
Jul 24, 2002
Professional Status
Certified General Appraiser
State
Texas
:evil: It is hard to be proud of your job when you see crap like this: :evil:

http://www.HUD.gov/news/release.cfm?content=pr02-081.cfm

The mortgage business is absolutely destroying our profession. It confirms my believe that it would be better to work for businesses and individuals outside the banking business; yes, even lawyers!
 

Doug in NC

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
I tried to connect to your link, but nothing happened. I also tried, unsuccessfully, to copy and paste it. Is it my computer or something wrong with the link?

Doug
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Doug: it worked for me but had to cut'n paste

http://www.HUD.gov/news/release.cfm?conten...nt=pr02-081.cfm

maybe this will work better?

it is the July 18 Appraiser Watch news release....

this is a good time to indicate again that there is a comment period lasting 60 days from the date of release... so you gots til Sept 16th to comment... feel free to vent to the proper authorities!
 
Joined
Jan 16, 2002
The entire FHA system is so riddled with corruption that it will never change. The appraisers are at the core of the problem, but even the honest appraisers can't help the default rate. The entire system should be dismantled and the buyers left to their own devices through the onventional lending system. Besides, where is it written that everybody in the USA is entitled to be a homeowner ? This of course is a poltically incorrect statement, but think about it, why should the government be involved in providing housing, in most cases to people who can't afford it anyway ?

We all know that the government is going to screw this whole thing up. I for one will not tolerate defending myself and responding to some letter from HUD/FHA saying "my defalut rate" is to high, let alone try to get reinstated to some half-assed list which generates about 12 assignments per year. HUD can go to hell, along with all their program participants !

As of today, I WILL REFUSE ALL FHA ASSIGNMENTS.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
The appraisers are at the core of the problem, but even the honest appraisers can't help the default rate.
--------------------
As of today, I WILL REFUSE ALL FHA ASSIGNMENTS.
Joe I take issue with yourstaement that the 'appriasers are the core...
As to the latter I would encourage you not to quit at this point...

As to the former:
How bout we place the blame where it belongs?

The lenders are leading the bull by the little ring in its nose..

I came on board just before "lender select" began.
That tail wags the dog and virtually guaruntees outster of competent honest appraisers, perceived as troublemakers...

I ONLY do REO's these days (haven't had but 2 or three FHA purchases in the last year- big surprise) and it will be quite interesting to see what this watch thing does to MY stats :roll: since I am appraising (mostly) trashed homes no right-minded individual would purchase!

I think like many others that Lender Select opened up the system to extreme corruption, but HUD also needs to accept that we appraisers cannot act in a vacuum!! So much is left uncovered by the current 4150.2 and FAQ's that even on a national forum like this one gets 3-7 answers to a simple question posted for input... Calling tech support more than once often results in contradictory one might even say arbitrary answers from well meaning tech support folk!!!!

So how bout writing a few very pointed letters to comment rather than up an quitting?

What do YOU see as the primary problem and 'best fit' solution?

Obviously taking the lowest bidder to do national reviews didn't work well :eek:
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
I saw the light about 12 years ago and have only done one FNMA appraisal in the last 12 years. The entire purpose of appraising and Loan to Value Ratios is to keep the lenders safe and keep supply and demand in balance. When you remove or raise the loan to value ratio to 95 to 100%, credit qualifications, and regulators like FNMA write policy to thwart sound appraisal principles, you are essentially thwarting the whole process.
Case in point from local history. Back in the 1970’s, the Farmers Home Administration completely screwed up the local development land and building market to the point that it has never recovered. I was building houses in 1973, and I could buy lots, 100 x 250 feet average, all day for $1,000. That was the going price. Houses could be built for $14 per square foot. The typical 1,000 sf rancher with full basement and carport bricked ran around $20,000. Then the Farmers Home Administration US Department of Agriculture decided that the poor and oppressed needed affordable housing. Within three years the price of lots went to $5,000. We had a bad recession in 1974, and you couldn’t give a lot away, but Farmers Home Administration was still paying $5,000 for lots. Why? Because they decided lots were worth $5,000. These people lived in the houses for about 20 years and literally used them up. You had to see it to believe it. When the roof goes bad, the well pump breaks, or the hot water heater goes out, these people don’t have it fixed; they just pack up and move out.
At the same time on in the 70’s, I was in the Auction business selling land and farm machinery. Life was good. I would have a farm machinery sale and the Farmers Home Administration would tell the borrower that he could purchase $10,000 in farm machinery. They would come to the auction sale and pay $5,000 for a tractor worth $2,500. Heck, they even screwed up the farmland they purchased I kid you not.
True case in point: A man and his family lived in an old shack on a farm that he worked on and the Farmers Home Administration decided to make him an entrepreneur. They sold him the sixty acres he lived on; built him a new brick rancher home will full basement and hard wood floors and the necessary farm machinery. Twenty years later it is sold at a trustee sale. I go out to appraise it. You would not believe what they did to that house, land, and machinery. Totally destroyed. All doors kicked in, cabinet’s torn off the walls, floors looked like cows had been living in the house, and nothing touched since the day they moved in. The machinery was a pile of junk scattered around in fields. The land was eroded and washed out. Guess where the man lived? Back in the same shack he moved out of 20 years ago with a cost to the taxpayer directly of about $75,000.
They didn’t all turn out this way, but the down side of that is that they ran the cost of land and housing out the roof and now without more government intervention the present generation of poor and oppressed don’t have a chance. I work in a town of about 50,000 people. In the last 30 years there has not been a new subdivision developed for middle and lower income houses. Why? The cost of development is so high that the minimum price house to justify the development expense is $150,000 and up. Most present building activity is $300,000 and up in urban subdivisions. About the same in the county. Why? Federal Government trying to help the people. You have to be a lawyer to keep up with all of the development regulations. Then to make matters worse, the local county one-month ago changed the subdivision ordinance that again changed the entire economics of land in the area. Now county development land prices will shoot and to solve that problem will require more Federal Programs for the poor and oppressed. It is a vicious cycle.
Local papers are loaded with HUD housing abandoned.
 

David Mullen

Junior Member
Joined
Jan 17, 2002
The only answer to the HUD problem is to shut them down.

Their staff does not have the technical expertise to even recognize the problem, let alone solve it.

The agency is just one large mess. It's only redeeming features are that it is a good home for otherwise unemployable political appointees and it has programs that generate lots of "campaign contributions" (better known as bribes to anyone not in politics}

They do nothing that cannot be done better by the conventional market except for their specialty. Loans that make no. They have ruined the credit of thousands of individuals by encouraging them to buy something they cannot afford.

Appraisers are a good part of the problem though because if they are not busy out there producing fraudulent reports for HUD, they are ignoring the bad ones that they see and not reporting them to the various State Licensing authorities. In order to be taken seriously, we need to report every case of fraud and incompetence that we encounter. I know that this takes a few minutes of time and a little effort but it is very important that we all do it.

Reporting them to HUD though is a waste of time. A few months ago, I sent one of the most blatant, fraudulent reports that I have ever seen in to them.

I did not get any acknowledgement from them, and only found the progress of their processing by bugging them. They sent a reviewer from way out of the area and he did not even have access to data for this area. I had to provide it for him.

After they finished, if they ever did, they did not let me know the outcome and have ignored my repeated inquiries. Maybe the "appraiser" that wrote that report was one of their "favorite sons" or maybe they do not even recognize fraud when their noses are rubbed in it.
 

larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
I don't know if it will help but, I called Harry Reid's office in Reno today and talked to the person responsible for HUD issues. He was not aware of this proposal. He typically works with borrower issues. I faxed him a copy of the report and offered to talk to anyone at anytime. When I explained the crux of the issue he sounded perplexed. He promised to forward the report to Reid's office in DC. I had to mention to him more than once that I was an appraiser and not a realtor. Not a good sign but we'll see. I told the guy that this was not the first time this idea had been forwarded but I didn't know the full history. If Harry Reid can be convinced that this issue needs to be laid to rest it can only help.
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Fraud is not the underlying problem it is politicians buying votes with these programs that is the problem. For example; I have not been very active on this board as usual of late. Why you may ax? Well, I live on a 120-acre farm and have been playing with my new 55hp tractor with front-end loader, which leads into an interesting story, related to my above post.
I had been looking for a tractor in this power class with a front-end loader for a long time. Six weeks ago my son-in-law went to a farm machinery auction sale and saw the exact tractor I was looking for. It brought $8,200 at the sale and the seller did not confirm the sale. Son-in-law’s uncle is a farmer and retired from Goodyear Tire Co. The seller of the machinery is also retired from Goodyear and these two birds worked together for 30 years. Uncle goes to see his buddy to get the low down on the tractor. They negotiate a price of $10,000 and uncle comes to get me to go check it out. Excellent tractor with low hours but has been left out side for ten years. Tires worn out, seat torn all to pieces, everything out of adjustment, broken lights, etc. I bought it.
The seller is a super nice guy and an African-American. We got to talking and he gave me the low down on his operation. He lives in a farming district on 70-acres and lives in a doublewide home. Some how the Feds end up with all of the surrounding land because it contains a wet lands area. The Feds come up with some program to help minorities (buying votes really) and sells him the land for $16,000 or $285 per acre. Average land prices in the area are $1,500 per acre. Then they gave him a permit to drain the wetland, he does, and goes into the cow and hay business. Apparently the Feds took the land from the former owner because it was a wet lands area. He is not married and has been making around $60,000 per year. Then he gets a low interest minority loan to buy some farm machinery. He paid $20,000 for this tractor ten years and except for cosmetics it is like new. It cost me $300 to fix it up and I have been offered $15,000, but I am not selling.
The point of all this is: How can you have any kind of rational market with this kind of thing going on. Special qualifications and deals for people of a certain race and sex category, deals for people with low income and bad credit, etc., and then expect the appraisers to deal with the results. This kind of activity is not a market situation, it is a planned economy like they tried in Russia. If you distort the market forces, how can you study market activity? If you read that article that prompted this discussion you will see the problem: “Easy terms for minorities and prople with no money or credit, etc.,” Screw up the market to buy votes and blame the appraiser for the results. In my opinion, any appraiser that stoops to do this kind of work deserves what they get.
 

David Mullen

Junior Member
Joined
Jan 17, 2002
I will not waste my time commenting. HUD has already decided the game plan and it is only out for comment because they are required by law to accept comments.

They may or may not read the comments but will go ahead with the plan as is or with very minor changes.

Last comment I made to them was about lender select. Spent hours composing it, mailed it FED X and it was never even acknowledged by HUD.

That agency is a joke and the President should do the taxpayers a favor and shut them down.
 
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