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Who should order the appraisal?

Who should order the appraisal?

  • Through a consumer agency

    Votes: 0 0.0%
  • Buyer

    Votes: 0 0.0%
  • Loan officer

    Votes: 0 0.0%
  • Title Company

    Votes: 0 0.0%
  • Buyers Agent/Realtor

    Votes: 0 0.0%
  • Other

    Votes: 0 0.0%

  • Total voters
    0
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Lee SW IL

Thread Starter
Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Who should appraisals be ordered on a purchase of a home? Would the answer be different on a refi?
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Ha! The Deal-a-tor of course. :lol:
jus' kiddin. :drinking:
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
The original intent of FIRREA was to have the lender engage the appraiser directly. It was only as a result of some intense lobbying from the banking and mortgage brokerage industry that the clause "The regulated institution shall engage the appraiser" was modified to read "The regulated institution or it's agent shall engage the appraiser". Too bad, because we could all have avoided a lot of unpleasantness if it had been left the way it was intended to read. Now the lenders have an out, and they are not shy about using it.

Anyway, it's the lender's money at stake and they are the ones who are held accountable under FIRREA for the appraisals they accept. IMO, there is no way the engagement of the appraiser should be coming from the origination side of the business. In a perfect world, the appraisers would be engaged by the underwriting staff; after all, that's who the users actually are in this process. Ahhh, to dream a little dream......


George Hatch
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
From the Office of Thrift Management (OTM)

THIS DATA CURRENT AS OF THE FEDERAL REGISTER DATED APRIL 30, 2002

12 CFR - CHAPTER V - PART 564

View Part
§ 564.5 Appraiser independence. (a) Staff appraisers. If an appraisal is prepared by a staff appraiser, that appraiser must be independent of the lending, investment, and collection functions and not involved, except as an appraiser, in the federally related transaction, and have no direct or indirect interest, financial or otherwise, in the property. If the only qualified persons available to perform an appraisal are involved in the lending, investment, or collection functions of the regulated institution, the regulated institution shall take appropriate steps to ensure that the appraisers exercise independent judgment and that the appraisal is adequate. Such steps include, but are not limited to, prohibiting an individual from performing an appraisal in connection with federally related transactions in which the appraiser is otherwise involved and prohibiting directors and officers from participating in any vote or approval involving assets on which they performed an appraisal. (b) Fee appraisers. (1) If an appraisal is prepared by a fee appraiser, the appraiser shall be engaged directly by the regulated institution or its agent, and have no direct or indirect interest, financial or otherwise, in the property or the transaction. (2) A regulated institution also may accept an appraisal that was prepared by an appraiser engaged directly by another financial services institution, if: (i) The appraiser has no direct or indirect interest, financial or otherwise, in the property or the transaction; and (ii) The regulated institution determines that the appraisal conforms to the requirements of this part and is otherwise acceptable. [55 FR 34549, Aug. 23, 1990, as amended at 59 FR 29503, June 7, 1994]
 

Neil (Texas)

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Texas
Maybe the underwriting department should have been included.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I would like to know who is voting for the LO. Are LOs coming in here and voting?

Anyone voting for the LO want to post your reasons.

I voted for "Other". The underwriter might be a decent choice, but I've heard from some UWs that they were pressured also and if they decline too many, they also lose their job.
 

USPAP Compliant

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Pamela,

I voted for loan officer. Maybe I misunderstood???? Are we talking as the system is now or how we WISH it was?

If we are wishing....I would certainly cahge my vote to some other entity with no dog in the hunt.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I didn't vote because we are not going to change the system.

Underwriters have the job of "underwriting the loan". They have too much responsibility in the transaction now which involves things other than just the appraisal.

I want whom ever orders the appraisal to be responsible for payment of the appraisal fee. Perhaps lending instututions should have a department that is responsible for this. Take the Loan Officer out of the picture.

Classic example of "de-regulation"....once upon a time Fannie Mae had a panel, FHA had a panel, and VA had a panel of approved appraisers. Things worked relatively well. Along came licensing (de-regulation in reverse) and now the system is rampant with fraud and incompetence.
Sorta reminds me of the air lines.....and another one bites the dust!

Wouldn't be alot simplier if "the intended user" of the appraisal report be the named client AND be responsible for payment of the appraisal fee?
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I would like to know who is voting for the LO. Are LOs coming in here and voting?

Anyone voting for the LO want to post your reasons.

I voted for "Other". The underwriter might be a decent choice, but I've heard from some UWs that they were pressured also and if they decline too many, they also lose their job.

Pamela,
For what it's worth.......many newbies don't understand the 'chain of command' that is involved in the lending process. They are trained that the LO is the client, not realizing or understanding that they are really a commissioned middle man in the transaction. Enter any sweat shop and you will find that those appraisers are carefully trained not to rock the boat with the LO because they are the client....the underwriter is nearly always portrayed as the bad guy who tries to mess with your work and kill the deal.

As to the UW's being pressured if they decline too many appraisals...yes, that is often the case. Same old story, it's a large business where production and profit for the share holders is the goal, and often quality is secondary to quantity.
 

larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
The best choice I can imagine would be for the underwriter to distribute the work on a rotating basis like the VA is now & FHA use to be. This would remove pressure from the UW. An appraiser could not be removed from this list without due process. Appraisers would have the ability to check their status on the approved list at any time. We would still be required to be approved by individual lenders as we are now.

Pamela:

I don't quite understand how UWs could be fired for declining loans. There are other factors just as important as the appraisal. I'm sure they have formulas to follow considering items like income, credit scores and the appraisal. I'm sure there are other factors as well. With a rotating system, they would be off the hook for the appraisal.
 
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