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Appraisal Foundation seeks Comments on White Paper

The Appraisal Foundation is looking to write a White Paper on appraisal regulatory reform, and they are seeking your comments. Possible topics for the white paper include:

- Implement National Licensing or Registration Requirements for Appraisal Management Companies.

- Require Greater Due Diligence from federal financial institutions.

- Improve enforcement among the states.

For more information on the Foundation’s White Paper, please click the link below:

Download file

To comment on this White Paper, you can email the Foundation at:

whitepaper@appraisalfoundation.org

Comments
  1. David

    Here are our (appraisers) concerns:
    We are not interested in being forced to work for 40-50% of our old fees (which have not gone up in 10 years).
    Please submit your white paper on toilet paper. It should give them a better understanding what HVCC truely is.

  2. PD

    I don’t think this Whitepapper will do anything to help appraisers, so I have to wonder why the institute is involved. They could implement all 3 of the above recommendations and it would not change how much they pay or how much they pressure you for turntime.
    It also does nothing to promote quality appraisals. AMC’s are about 2 things: Speed and low fees. No room for quality, experience, ethics. In fact they get in the way. i spend 40% more time doing appraisals now than I did 3 years ago, and yet I get less and less every month.
    Sorry to sound harsh, but it has been a hard two years and it is only getting worse.

  3. Dan Wilson

    I agree that lower fee is not good for the appraiser. I have stated many times that the FHA guideline for the fee is a resonable fair fee for the market area. The AMC should be paid for there jobs. It should not be paid by the appraiser but the client.

  4. mrR

    Comment on appraisers,
    Heavily fine
    The Real estate Company , Sales Manager
    and agent who while taking a listing instructs the seller to” add the 6% commssion”
    into the listing price of the house.( make it mandatory, every 3 month , fee renegotiation
    (the agents cut with the company )
    with the Brokers Sales manager, these blood suckers literally do nothing for their commission base incentives)
    A common practice
    This has been the cartelist that has ruined , stalled and over priced the housing market.
    Adding one persons commission and in most cases over blown Bank charges into
    the listing price does not add to the equity but depletes the equity
    Equity is defined by bricks and structure not up charges going to one person.
    This practice over prices the house by 5-6% and the buyer
    is stuck financing the salary of one listing agent and finance company for the next 30 years,
    If every home either currently on the market or is to be listed deducts 6%
    from the asking price and re-lists at the reduced price
    I believe this alone will restart the market.or at least create renewed interest
    on stalled unsalable listings that have been on the market for the last, one two or more years.

  5. With the extremely high rate of foreclosures I am wondering this. How many of the foreclosures are conventional loans that the home owner has been paying the PMI premium? Wasn’t that insurance for the LENDER to prevent the lender from loosing if it were to go in to foreclolsure? Where did the premiums go? Was this another scam by the lenders?
    I have yet to hear anyone bring this up. WHY?
    I for one am ready for an explanation. Anyone else?

  6. Andy Kay

    My experience has been that honest appraisers are trapped to meet the price requirements of the bank rather than the value of the home.
    I suggest that banks or mortgage companies are required to withhold the selling price from the appraiser. If the value does not meet the selling price a second opinion is in order.

  7. Stuart Vogt

    If AMC’s are in the “loop”, everyone at the AMC that is connected with the appraisal should be required to be lis./certified or have USPAP class every two years like any lis/cert. appraiser.
    Further, recent postings from at least 2 AMC’s that I am personally familiar with are “influencing” this appraiser with instructions such as, “At no time should the fee you have contracted with ServiceLink be disclosed to the homeowner”. I wonder what they are hiding..hmmm?? What ever happened with that law suit in Nevada about pumped up appraisal charges to borrowers?
    Or, “If you do not wish to agree with the new fee schdule….please note that it may jeopardize your status with STARS and our clients and affect your volume from them.” No violation of the proposed HVCC there!!!
    The results of HVCC on appraisers proves the “law of unintended consequences” once again.

  8. Iam a Realtor that has worked in many markets and I have yet to come across a company or agent that determines a listing price then adds 6% to that price. That is ridiculous. Also, I wish that reducing real estate listing prices by 6% would restart the market. That is a drop in the bucket. The homes that are selling are 25% to 50% lower than they sold for 2 years ago. Most sellers don’t have the equity nor the desire to take that kind of hit.

  9. Brad Meahl

    Remember the “Keating fisaco”, when licenseing was the cure all for the mortgage/ real estte appraiser industery? didn`t work did it.Now Goverment is going to “cure all” again, this isn`t going to work either, all the hvcc will do is drive the good appraisers out of the business. maybe goverment should stay out of the realestate / “appraisal business”.

  10. JOHN CHINN

    RATHER THAN LICENSE THEM MAKE THEM ILLEGAL.
    ALL LICENSING WILL DO IS ADD ANOTHER LAYER OF UN-NEEDED GOVERNMENT.
    THE ENTIRE REAL ESTATE INDUSTRY IS IN THE MESS WE NOW FIND IT, DUE TO THE FEDERAL GOVERNMENT. FOR MANY OF PRACTICING APPRAISERS AND REAL ESTATE AGENTS AND LENDERS, THIS WAS BEFORE YOUR TIME. THE START OF THE INDUSTRY PROBLEMS BEGAN WHEN CONGRESS GOT INVOLVED WITH HOW AN APPRAISER WROTE A REPORT, HOW THEY DESCRIBED A NEIGHBORHOOD AND WHAT SALES WERE UTILIZED.
    THE FIRST CAMEL’S HEAD IN THE TENT THAT I RECALL WAS THIS:
    A DIRECTIVE CAME FROM FANNIEMAE THAT SAID THE APPRAISER CAN NO LONGER USE TERMS LIKE “PRIDE OF OWNERSHIP” TO DESCRIBE A NEIGHBORHOOD. SUCH TERMS ARE CONSIDERED RASCIST I PHONED D.C. AND ASKED THE THEN CHIEF APPRAISER WITH FANNIEMAE THIS QUESTION:
    SUPPOSE I AM IN AN ALL WHITE OR AN ALL BLACK OR AN ALL ANY COLOR OR ETHNICITY NEIGHBORHOOD AND ALL THE YARDS ARE CLEAN, THE STREETS ARE CLEAN AND PEOPLE ARE OUT IN THE STREETS AND ON THE SIDE WALKS SWEEPING THEM AND I SAY THE NEIGHBORHOOD EXHIBITS “PRIDE OF OWNERSHIP.” HOW IS THAT RASCIST.
    THE ANSWER I GOT WAS THAT A MEMMBER OF CONGRESS AND HIS STAFF HAD DEEMED ANY SUCH TERM TO BE RASCIST. END OF CONVERSATION.
    THAT WAS THE ENTRY OF FASCISM INTO THE APPRAISAL BUSINESS. THEN CAME THE CHARGE THAT LENDERS WERE RED LINING. RED LINING WAS MADE INTO A TERM FOR DISCRIMINATION. THE ONLY DISCRIMINATION WAS IN APPLYING SOUND LENDING PRACTICES AND NOT WISHING TO LOAN IN DRUG INFESTED, MURDER PRONE NEIGHBORHOODS.
    BECAUSE A LOT OF SUCH NEIGHBORHOODS WERE BLACK, AND DRUG INFESTED, THANKS TO THE FEDERAL GOVERNMENT, THE RASCIST THEME WAS RAISED. AND IN THE HALLS OF CONGRESS IT RANG A VOTE BELL WITH THE RACE PIMPS AND THE ACLU AND THE NAACP. THEY COULD SEE DOLLARS HANGING ON THE TREES.
    THEN CAME AH HA ! IF LENDERS RED LINE THEN IT MUST FOLLOW THAT APPRAISERS RED LINE. SO THEN CAME A DIRECTIVE THAT SALES MUST BE USED OUTSIDE OF A BAD NEIGHBORHOOD FROM SUPERIOR NEIGHBORHOODS. THAT DIRECTIVE DID NOT COME IN WRITING . IT CAME IN THE FORM OF GET THE VALUE WE WANT IF YOU WANT THE BUSINESS. AFTER ALL THE GOVERNMENT WAS BACKING THE LOANS. GOVERNMENT HELL. THE TAX PAYER WAS THE FUNDER.
    I LOOK AT THE RIDICULOUS GUIDELINES THAT AN APPRIASER MUST USE TO PRODUCE AN APPRAISAL AND IT IS OR WOULD BE LAUGHABLE IF IT WERE NOT SO SAD.
    THE MESS WE ARE CURRENTLY IN WAS AND IS A CHILD OF THE FEDERAL GOVERNMENT. CONGRESS USED FANNIE MAE AND FREDDIE MAC TO MUSCLE THEIR FASCIST WAY INTO ANOTHER FACET OF PRIVATE INDUSTRY.
    THERE HAVE BEEN BARNEY FRANKS AND MAXINE WATERS ALL ALONG THE WAY.
    I WAS AN APPRAISER FOR 44 YEARS. I DO NOT SEE WHY A YOUNG PERSON WOULD EVEN CONSIDER THE PROFESSION.

  11. JK

    AMCs are what they are. Just say no! Something that would help appraisers give unbiased evaluation is make it a rule not to disclose the contract price to the appraiser. Put the loan decision making on the lender alone, where it used to be.

  12. CKT

    I have been practicing real estate sales for 10 years and I don’t agree with the the undue influence lenders (or agents) have in disclosing the sales price prior to an appraisal. That factor should have no bearing on the true markeet value.
    I sell waterfront homes & lots on a large lake in a rural environment, and I am extremely opposed to lenders who use out-of-town appraisers from “some group” for which the assigned appraiser is not also a specialist in my unique marketplace. Often the value of the “view” is quite subjective and cannot be appropriately calculated by multiplying this x this.

  13. Mike Sullivan

    Obviously, there are a myriad of factors that contributed to the mortgage meltdown. However, a key factor was Fannie Mae adopting the Desktop Underwriter (DU) system. Aside from lower buyer qualification standards and raising the di minimus threshold to $250,000 for a loan requiring an appraisal, the DU system ushered in the `Drive-By’ appraisal. Virtually every loan using a `drive-by appraisal’ got approved; how can an appraiser deny the property is worth less than the contract price if there are higher and lower priced sales in the neighborhood? However, without an interior inspection, quality and depreciation cannot be factored into a value estimate. This may be news to some people, but quality and condition can significantly affect the value of a property; you cannot rate the subject in the value range with any accuracy without knowing the quality and condition, and you actually have to look inside to know those things. Unscrupulous buyers, sellers, agents, and loan officers quickly figured out that a `drive-by appraisal would be ordered if the sale price falls within the value range established by sales in the local market; the loan gets approved and the sale closes if a drive-by appraisal is accepted, regardless of the quality or condition of the house. Contracts were being written with all kinds of contingencies and concessions involving seller paid closing costs, cash kick backs to buyers, etc. padded into the price. The biggest problem here is that the inflated sale prices are then recorded and become part of a corrupted data base, which in turn serves to support even higher drive-by `appraised’ values and ever increasing subsequent sale prices and loans. Fannie and Freddie argue that there is no difference in the loan default rate whether a drive-by or full appraisal was applied, but this misses the point: complete appraisals with interior inspections would have held property values in check and we would not have seen the unprecedented and unwarranted double digit price increases and the(inevitable) market crash. The computer is a great tool and is (now) indispensable to appraisals and mortgage underwriting, but Desktop Underwriter puts way too much reliance on the technology. A reliable value estimate cannot be developed without an interior inspection. Until a machine can go inside the property and evaluate the quality and condition, we’re going to have to do it the old fashioned way – with people. (I know, I’m such a Luddite; God forbid anybody should have a job!). The URAR report was quite adequate; the only time a 2055, 2065 or 1075 form should be used is in combination with a certified home inspection. Unless and until an interior inspection is required for every appraisal the system will continue to fail.

  14. JUST SAY NO!!!!!!!!!!!!!!!

  15. Denise Sutton

    The fix is a one-two process:
    !. Do NOT disclose sales price to appraiser.
    2. Do NOT hire appraisers from outside areas.
    I’ve been a practicing Agent (plus a company owner) for over 20 years. Now I teach. Ethics are the problem. I believe te one-two I recommend steps in the right direction.

  16. Jill Powell

    I agree with Denise’s one-two step solution. It is really the only way to insure a completely unbiased opinion of market value. However, currently appraisers are required to analyze the sales contract in the Fannie Mae 1004 form. They WANT us to know the sales price and concessions… if we do not fill this part out, we are requested to do so later.
    Even though Denise’s suggestions make the most sense in taking this field “back to its roots”, the new HVCC rules have absolutely not gone in this direction whatsoever. The banks will now be able to fully dictate what the appraisals really are due to the fact that they are allowed to fully own the management companies that will be telling the appraisers what to do!

  17. There are much larger concerns than a sales contract. Not a biggie for me regarding the sales contract, the value (as in market) is there or it isn’t. The HVCC CODE OF CONDUCT…funny name, should include a law for a fair wage to be paid for the diligent ethical appraiser. This Fair wage could come from a voluntary panel of respective local area appraisers per type of service and the AMC should have to get their cut from whom hired them in the first place. Should not blurrrr the lines for use of AMC with no rules…just another way government has rushed to botch the task at hand. I do not think we should be forced by AMCs (owned by banks)to be pressured into a turn-time so the AMC can get a bonus! How can it be ethical for the appraisal fee disclosed as a ceratin amount be far less than what the app received? How can a desk-top or AVM be use as an appraisal…espectially NOW? Who are the “Makers of Lawsssss fooling, we all know the appraiser has to be the fall guy…because it is the Banks that lobby the big bucks. Very Sad Where will all the ethical appraisers be..when you need us? Or is that the big plan…just use BPO and desk tops…how about tax value??

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