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What's an Appraiser's option?

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Red Blumenstock

Thread Starter
Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Florida
Earlier this week, one of the PA Council members forwarded to me the Fannie Mae article about their not requiring appraisals where the L to V ratio is 80% or lower and asked if the State Board can do something about this. The answer is that the State Board has no control over lenders or Fannie Mae.

In my not so humble opinion, I think it is past time for Appraisers to continue to depend on lenders, many (most?) of whom have little regard for Appraisers. The lender is interested in the bottom line and the loan officer has a great deal more interest in the commission fee. Both have little (if any) regard for the consumer (borrower) or the Appraiser (again IMNSHO).

I believe that Appraisers should concentrate on creating a better source of appraisal assignments - the Borrower. Somehow, we must get out the message to the Borrower that they are not protected from paying too much by the lender and that a fee of $250 - $300 is very little to spend to have piece of mind about one of the largest expenditures they will ever make.

We must concentrate of educating Borrowers to order an appraisal which they can see and depend on. That would be a much better future for Appraisers than will be available at all from lenders.

Red Blumenstock
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
I agree totally. However, FIRREA says they can not order the appraisal. The borrower certainly doesn't want to pay two appraisal fees. I think if it was proven they could save thousands of dollars they might, but few will take that chance. Plus, especially in a refi market, home owners will believe what they want to believe and they "know" their property better than any appraiser and certainly can't be told it is worth less than what they think it is worth. Borrowers do need to be educated, but you can only teach those who want to learn.
 

Red Blumenstock

Thread Starter
Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Florida
Hi Tim,

I considered the FIRREA requirement, but that only applies if it is a Federally Related Transaction and then only if an appraisal is ordered. If Fannie Mae is correct in their estimate that they are going to avoid appraisals in 75 - 80% of the time with this $50.00 payment, it is going to eliminate a lot of appraisals. It is particularly those instances that concern me.

I agree with your statement that at least some are not going to want to pay for a second appraisal, but that is where the education is important. If someone is offering to pay $150,000 for a house, shouldn't they spend another $250.oo to make sure it is worth that and not less than $100,000 as in several cases in PA? I hope that Appraisers (and maybe Appraiser Organizations) can somehow educate these people so they can be saved from some awful results. (and in the process change the direction of the Appraisal profession.)

Red
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Red; it was my understanding that FNMA is getting $50 from the homeowner and another $200 from the go between guy (lender) who will pass that cost onto the Borrower (No Way Their Payin-Guaranteed); so in essence there is no cost reduction. Your point is well taken and yes it should be our job, but most won't; it like "Buyer Brokering" once someone gets it started and makes millions, everyone else will jump on board. As the start up company though, it does afford you bragging rights, which will allow you a significant flow of business. :lol:

Good Luck
 

David C. Johnson

Senior Member
Joined
Jan 15, 2002
Red:

A Nationally broadcast prime-time 45 second Television Commercial, including production cost, with a run schedule of 20 times over a two week period might cost $1.5 million. Repeating four times per year might run $6,000,000 (six million) With 60,000 appraisers sharing the bill, we would be looking at $100 per appraisers.

This might be quite cost effective for drumming up some business and saving some homeowners some grief (cumulatively worth orders of magnitude higher than our yearly budget).

Just a though. But it would be a trip to be able to pull it all together since it would take so much cooperation from so many appraisers.

Short of a full steam trial, we could try it on a regional basis to see how the idea would likely fare.

As commercial appraisers it is not going to effect you and me, but I bet others and our selves would be willing to donate the $100 just to help and see if it could be done.

Regards,

David C. Johnson, Raleigh, NC
 

Red Blumenstock

Thread Starter
Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Florida
David,

I would be willing to contribute a lot more than $100, but I agree with you. We couldn't get anywhere near enough to raise that kind of money. My thought was that on a local basis, it might be possible to make an inroad.

Red
 

Steven Bonner

Sophomore Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
If getting this subject and our perspective on it in the national eye is the goal, what about a relatively short, no holds barred, hard hitting, and to the point form letter to the editor that each of us could send to our local papers? It's free, gets attention, drums up business for the local appraiser that submits it, and may help get the ball rolling locally for radio talk shows and/or those morning radio commentaries.

At present it seems we have lost some of the momentum that our petition started. But consider this. Many said it was a waste of time and we would get no attention at all from it. I believe we got quite a bit of attention nationally and it is still causing waves but only because for a brief moment we worked together for a common goal. Whatever is done, the results will reflect the degree of our common efforts.
 

Proactive

Senior Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Washington
How about a series of informative newspaper ads paid for by groups of local appraisers? Maybe something like this:

BUYING A HOME?

If your lender suggests giving you a loan without an apprasal...

<<Cartoon of fox giving loan docs to chicken couple in front of henhouse>>

GET ANOTHER LENDER

<<Copy describing how getting a professional opinion of value
from an independent appraiser can protect the homebuyer's interest.>>

This important message brought to you by the following professional appraisers:

<<List of appraisers>>
 

David C. Johnson

Senior Member
Joined
Jan 15, 2002
Red:

Planning to fund such consumer-oriented (read: Public Oriented) media announcements / "advertisements" might be the most decent thing Fannie and Freddie and FHA have done in years.

Since state appraisal boards can expect Substantial Budget Cutbacks (at least in staff from a reduced work load), they might have an interest too.

Besides, the sworn mission of all these groups includes protecting the public... Well, the state's appraisal boards' does anyway -- almost forgot about that GSE Congressional Re-chartering.

David C. Johnson
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Steve,
Now that would be cute. If someone with artistic skills could draw up an editorial cartoon, and have it available for downloading, I sure would submit it to my local fish wrapper. I would submit it as an opinion letter, or maybe even an ad if the paper gods would not publish it. :wink:
 
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