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Why do loan officers hire the appraiser?

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MarkRichmond

Thread Starter
Freshman Member
Joined
Jan 16, 2002
I don't really understand why a bank would let a sales person (who is tied to commision and is not at any personal financial risk) hire the appraiser? If I owned a bank and it was my money at stake, I would rather have the tellers hire the appraiser. I would rather have the cleaning crew hire the appraiser. Anyone but the loan officer! These people are looking out for themselves as they should. So naturally they will try to do those things that make the deal happen. This includes hiring number hitters and black balling appraisers that try to do an honest job.

You don't put the local crack addict in charge of drug enforcement. Why put the loan officer in a position where they can "control" those safeguards that are put into place to protect the bank's capital base?
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
A very good question to which I have no answer. It makes no sense at all, as you say. If I was the investor buying the loans, I would choose the appraiser. :evil: Maybe someone else has some conspiracy theories. :twisted: I never usually buy those, but there has to be a reason. :?
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Mark, I think you answered your own question;

"If I owned a Bank and it was my money at stake" ah ha 8O


No need to go any further 8)
 

Ray Ohler

Sophomore Member
Joined
Jan 15, 2002
It's NOT the bankers money it's OPM. If you can juggle the numbers high enough, not ALL the loans are going to go bad in a short period of time, make the bottom line LOOK attractive, you can get bought out quicker and make millions and retire early (looks good on paper - so do most gypped up appraisals - well not really, if you look at them carefully BUT NO ONE IS LOOKING). If the bad loans start outnumbering the good, get more loans in the door at any cost.
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Mark and All --

The "Bank" is not making these loans for their portfolio.

The "Bank" is essentially selling the loans to the Government.

Fannie Mae is you, as in 'We the people' ... in a more ordered state of union[suits] we would otherwise be bare-naked before the cheaters who dump their loans on the taxpayer and keep the good stuff for themselves.

Nothing changes. The sun comes up every morning.
 
A

Anonymous

Guest
I have often wondered the same thing. I have one bank client that has the underwriters order the appraisals.
 

Jacob S.

Freshman Member
Joined
Jan 19, 2002
:?: :twisted: :p :cry: 8O :)

I work for a few private investors who actually lend their own money, most of thier loan apps. come from MTG bROKERS, they never care what the appraisal the broker provides says. They only go by their own appraisal. Since they lend their own money they tell me they don't use any of the appraisers who the brokers use, Generally because the values are inflated. This is not a new phenom. It has been going on for decades.

Why do the lenders let their sales people pick the appraiser, quite simple. If the salesperson brings in deals that the boss can't close neigher make any money if the salesperson can close a deal they all make money, and the lender can blame the ones that go bad on the salesperson and the appraiser. Keeping them out of trouble. Rouge Loan officer.

:wink:
 
A

Anonymous

Guest
"understand why a bank would let a sales person (who is tied to commision and is not at any personal financial risk) hire the appraiser? "

I find all the remarks above a little goofy. A "banker" aka Loan Officer is just that. And they AREN't paid by commission. They DO lose their job if too many loans go sour...because A BANKER is lending their own money. Some, like my own brother, are paid bonuses based upon net profit from their lending...i.e.- put the loans on the book ok, but repos count against you big time. I know 2 bankers who lost their job in the past two years because of bad loans. One was a branch manager who lent a bunch of money on a ranch he argued to the bank board was good as gold. It lost a cool 1/2 a big one and now he is a jr. loan officer across town.

A mortgage loan originator is NOT a banker. They are a *****, paid on commission to close a loan. I did not even respond to the two that called me today. I won't give them the courtesy of a call back. I work for BANKERS. I have had Dang few of them ever whine about an appraisal. They want trustworthy appraisals. Doesn't mean they always agree with me, but never had one pressure me for a higher value. NEVER. Mortgage *****s? They basically can attract only deadbeats with bad credit in the first place - high risk loans. I don't need their business. I know one Bank president who related how B. J. the "hit the numbers man" told him he would appraise any property for whatever he needed. He thanked him politely and after he left, called all his loan officers together and said, "Don't ever let me catch one of you using this turkey."

I have a feeling that every single one above is a Residential appraiser dealing primarily with mortgage slime. No wonder to whine, but again you are not dealing with a bank, only a broker working on commission and churning the accounts as fast as they can.
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Terrel;
You "find ALL the reamrks a little Goofy" - now realistically, you only know 1 or 2 Banks that actually keep (or portfolio) loans and most do not; they, in general keep the cream of the crop, like any other business. As to how they get paid, they not only get a bonus- they also at periodical increments have the ability to refi; buy another property; or take a home equity loan at "rates" you & I will never the option to get. So if your talking (*****s-your language-not mine) or mortgage slime- I think you need to understand ALL aspects of Lending from ALL Lenders.

Mortgage Brokers, on the other hand do not have the ability to portfolio loans, as with most of them, they lack capital. Bankers solicit Money from the public (savings & checking accts); and have money available to Lend - Mortgage Brokers due not have that option.

The lighter side 8)
 
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