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Veterans' Appraiser Choice

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The Matrix

Senior Member
Joined
Apr 28, 2003
Professional Status
Certified General Appraiser
State
Colorado
Does anyone have any information regarding the proposed legislation which would allow veterans to choose their appraiser from the VA appraisal panel.

The following information is from the Appraisal Institute's web site.



AI, ASA Oppose Veterans’ Appraiser Choice Act via Letter

The Appraisal Institute and American Society of Appraisers have asked bill sponsor Adam Smith, D-Wash., to withdraw H.R. 1500, The Veterans’ Appraiser Choice Act, in an April 24 letter, citing concerns of lack of objectivity, the potential for pressure and consumer protection.




“The independence of the appraisal process is a fundamental principle that assures participants in a mortgage transaction that the value of a home held as collateral will reflect the market value. This protects both the lender and the buyer,” the letter stated. It went on to reference the current Loan Guaranty program administered by the Department of Veterans Affairs, through which real estate appraisers are selected by rotation from the VA Fee Panel, the “approved” appraiser list administered by VA. “The key benefit of selecting appraisers by rotation and away from lenders, brokers, realty agents or prospective borrowers is to ensure the independence of the appraiser, whose primary responsibility is to provide the VA with an unbiased opinion of value on the property being financed,” the two groups stated.




Members of both the AI and the ASA have found that the VA Fee Panel is more effective in reducing instances of inappropriate client pressure than other federal housing programs such as the FHA Single Family Housing loan program, which allows the lender to choose the appraiser. The groups pointed out that recently, the FHA Single Family program has recognized that inappropriate pressure should be avoided and has issued a proposed regulation to hold lenders accountable for the appraisals they order.



“For borrowers, veterans or otherwise, to dictate to the VA the use of a specific service provider is problematic. Such a practice injects a party with a stake in the outcome of the loan into the selection process. If passed, the legislation could have a profound effect as predatory lenders, brokers and realty agents will likely “suggest” veterans choose an appraiser that is friendly with the lender, broker or agent. As many veterans move to new areas after assignments or retirement and may not be familiar with local market conditions, such a process would leave veterans vulnerable to unscrupulous players in the real estate market,” they said.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
As I understand it, they want to invoke a version of the FHA Lender's Select for VA. The effect would be the borrower being steered to the appraiser acceptable to the lender. Now, admittedly having done some VA brokerage work for buyers, I have a real problem with some VA appraisers. However, this is just begging for additional fraud in HUD's operation.

Roger
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
David, thanks for posting this to the forum and welcome to our not too little group. Hopefully this will not get out of committee. All it will do is create more fraud.

Folks, David is an MAI in Colorado Springs who chooses to do VA residential work. Please welcome him to the forum.
 

Tom McDowell

Member
Joined
Jan 19, 2003
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
North Carolina
I think the system works well now.

Contact your reprsentative
 
W

walt kirk

Guest
Perhaps a copy of the appraisers petition should be sent to Rep. Smith, He or his staff should be invited to join this forum to discuss this and other important matters.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Ah come on guys..you know the VA roster system is an affront to every licensed appraiser in the US. It's akin to the banks and S&L's saying in the days before licensing that they would only use MAI's and SRA's. Didn't that PO alot of you?? Sure it did. Why do you think I'm an SRA? I grew-up during those days. The existing VA panel is no different. It's discrimination, plain and simple.

The fraud scare tactic is just that, a scare tactic. I can't berlieve that AI and the ASA were that dumb to use that line/bait. The proper scare tactic which worked at FHA was the 10% mandatory review of an appraiser's work. That letter in the mail every so often kept you on your toes. That fear is now gone and with that, things run rampant.

Bring back the reviews and FHA appraisers will fall in line.

Me. I'm for VA lender-select. I have a license and I should be able to appraise for any government agency I choose. limited only by the competency provision in USPAP. To be denied that, is being denied my rights. We don't hold the police responsible when banks are robbed by crooks, why are we assuming ALL non-VA approved appraisers are going to be crooks and bow to lender-pressure?

AI & ASA better get in touch with their residential members instead of supporting the continued existence of an elite class of appraisers.

As a member of the Institute, I will be writing a letter to Mr. Smith supporting his actions for VA lender-selection. Damn, it's 2003 and soon, I may be free at last to do a VA appraisal..

Ben
 
W

walt kirk

Guest
Ben,
With lender select appraisers are not chosen for their ability or knowledge of the market but rather for their sales skills or willingness to hit the number. I believe that we need more appraisals assigned with no input from anyone who stands to profit from the deal closing, not less.
 

john mello

Freshman Member
Joined
Feb 12, 2002
Professional Status
Certified General Appraiser
State
Massachusetts
A V.A. appraiser for over ten years, I, for one, know that the quality control exercised through the V.A. fee panel works and works better than most other appraiser-qualifying systems. Some appraisers may snipe that a fee panel is discriminatory and a restraint of trade. But in practice, it is an effective quality control mechanism that ensures, to the greatest possible extent, the independent judgement, integrity and technical competence of the V.A. appraiser. Its abolition or weakening would fly in the face of the basic human truths which caused the independent fee panel structure to be established in the first place.

More information on the "V.A. Appraiser Choice" proposal is available at www.appraisalinstitute.org.

It is vital that elected representatives hear from appraisers so that political expediency and pressure do not succeed in undoing, yet again, one of the remaining sentinels of indepenent and responsible valuation.

John Mello, SRA, MAA
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Walt,

I disagree. The panel should be open to everyone and then weeded out via reviews. Basically the idea would be: you had your chance but blew it because you were caught on a field review. You and I both know how it was when we were on the old FHA roster panel in the Camden office. One poor review, you were in the FHA office to be scolded by Tom Bordone. 2 poor reviews in a year and you were history..and it wasn't hard to get a poor review with Bill A, if he was your reviewer!!! Then you got to advertise when a potential client asked you if you were ever removed from an approved appraisers panel, that you were.. and then they wouldn't approve you. So there was some fear of "God" in the appraiser because s/he knew they were going to be reviewed on a regular basis. They did "x" amount of exterior only reviews and then a certain percentage of interior and exterior reviews and you knew that if the house was vacant.. that was going to be your interior review so you'd better dot your "i's" and cross your "t's" on that one.

Now for your "blast from the past-see how good your memory is test" How many FHA appraisers in the Camden Service Office did jail time in the 1980's for the flipping fiasco in Camden? Answer: ( ? ) How many VA appraisers went to jail? Answer: ( 1 ). Remember his name? I drive by the Physic that now occupies his former office almost everyday. How did he get caught: Not by VA but by FHA. He didn't know that FHA reviewed every appraisal report in Camden and when the VA's were converted to FHA's, he was reviewed by FHA and was caught. So a roster system is not necessarily better than lender-selection in preventing fraud.

And there's the secret. A level playing field for all with adequate and advertised field reviews by HUD and hopefully soon to be VA. Hey, when was the last time you got a field review in the mail from FHA??? I bet many newer appraisers haven't seen any and don't think anyone is watching them. I have been informed by a HUD friend from the left coast, who read one of my past posts, that HUD is indeed still watching, reviewing and sanctioning. They just need to advertise more, that's all.

Secondly, if the appraiser works for reputable lenders, they want to know the truth. They don't want to take the loan back from FHA if there is fraud. They don't want to lose their DEU privileges. In today's corporate world, they don't want to be embarassed...kind of like what Commerce Bank is going through right now. If the appraiser works for the pressure cooker lender, rest assured s/he will get caught eventually along with the lender. It's just not worth it.

Ben
 
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