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“They don’t want good appraisers”

The Center for Public Integrity has posted a great report on the developments of the appraisal profession over the last few years.

The report discusses how appraisal pressure has influenced the housing market and includes this section on the Home Valuation Code of Conduct:

Appraisers who work for themselves or small businesses say the code will end their careers since mortgage brokers and other loan generation staff can no longer contact them directly. Instead, they say the code in effect directs all business to appraisal management companies, the unregulated middlemen that are often subsidiaries of lenders.

Appraisers say the management companies passed on pressure from lenders in the past, including in Cuomo’s case against eAppraiseIt, and see nothing in the new code to stop it from happening.

“It’s a bit of irony that the solution is the same thing that got us here,” said Bill Garber, director of government and external relations at the Appraisal Institute, a trade association representing appraisers.

The Home Valuation Code of Conduct, Garber added, is lip service to cleaning up the industry. Appraisal management companies “are just as capable of pressuring appraisers as anyone else.”

Appraisers also dislike the plan because some appraisal management companies take a hefty administrative fee and pay low rates to appraisers, which experienced appraisers say will force them out of the business and turn the industry over to less experienced appraisers who are more likely to make mistakes.

Pressure will still come from the management companies, said Dodd, the Virginia appraiser. “They could give a damn about the consumer. They don’t care if the consumer pays ten, twenty, or thirty thousand more than it’s worth.”

Cuomo hasn’t answered critics of the new code, and his office did not return calls from the Center for Public Integrity.

I’m somewhat surprised the Center for Public Integrity could not find one person to defend the HVCC. Not even Cuomo’s folks want to talk about it?

Here’s how the report concludes:

In February, Miller received a call from a different lender. This one wanted him to remove pictures of a cracked sidewalk he included in his appraisal. This would be prohibited under the Home Valuation Code of Conduct. But Miller expects lenders will figure out a way around the rules.

“They don’t want good appraisers,” he said. “They don’t want good numbers, even now.”

And again my question is, “Who is enforcing the HVCC?”

Comments
  1. Karen

    It’s time for Cuomo to stop ducking this issue. He sat as a director of one of his buddies AMC’s. My guess he is part of a conspiracy to promote AMC’s under the guise of good government. I say let this get the light of day under a CNN or Fox investigation. NAR- get this out into the public arena!

  2. Barb Iverson

    This is all so damn dumb that it is simply unspeakable. There are many rural areas of the US that simply can’t deal with what is being asked at this point. A 1004MC with a total of 2 sales in 12 months can’t help anybody with analysis. Somebody with some sense has to get involved here.
    Totally sick of the AMC intervention and simply won’t do it. Would rather live below the poverty level

  3. Carl Anderson

    The lenders don’t want an honest appraisal…..they just want to close the deal at any cost. The simple solution is to take the ordering away from them and the AMC’s and have a unbiased rotation system like the I.V.P.I. as presented by Crowley/Dodd.

  4. Becky

    This Code of Conduct is a joke.. already received an email from a loan officer who advised that there mortgage co. is opening a AMC so they can put the appraisers on there list who they have been using all along. No change here…

  5. Standards of practice, random audits, cannons and codes of ethics, and in general total regulation should be identically enforced and regualted as the Realtors are, both in mortgage lending, as well as appraising.

  6. Stanley L. Reaney

    If the GOOD Appraisers stick together and flat A** refuse to work for a middle man, then possibly some honesty, integrity, and professionalism will return to the appraisal industry, and these so called appraiser worms will fall through the cracks, or better yet go to jail.

  7. Scott

    HVCC is a joke! The worste pressure for value I ever got was from an AMC! The AMC fees are simply too low. Fair work for fair pay.

  8. Colleen Patterson

    I don’t think Cuomo is the villan. If his organization is backing away from the controversy involving the implementation of processes he backed, that is very unfortunate for all of us. Sanity? Movement toward truth, reliabilty, reality? Well, it is still nowhere in site. And how about subsidiaries of lenders that have been owner of AMCs for years and pocketing a profit then and now from the appraisal and from the loans they support? Alive and well. They are alive and well. Is there anyone who gives a damn about the consumer and the taxpayer who end up suffering and financing the muck, let alone the appraiser? Appraisers continue to be manipulated by this system and that system. And the best of the experienced best, will truly seek their employment survival elsewhere to all of our detriment. Amazing.
    Frustrating. Scary given what we have recently experienced individually and collectively in the housing market.

  9. Where is the justice

    What does it take to get called out on a major network? Where is the main stream press on this one? Cuomo’s office won’t even respond, the GSEs say they are in receivership so they don’t have to answer to anyone, and the major press are silent as usual. In 2 years I’ll get to watch a special on TV about the whole mess, but by then it will be too late AGAIN!

  10. Bill

    Since Cuomo has gone after lenders, appraisers, and greedy wall street types associated with the mortgage meltdown, I wonder if he is trying to hide his actions at HUD. Remember that he was at HUD during the push for more loans to people who couldn’t afford them. Maybe an investigation of the investigator is in order.

  11. I’m not crazy about the idea of AMCs. I don’t think they add much value to a transaction.
    But here’s an idea, how about appraisers get together and form their own AMCs? May the better AMC win.

  12. Edward Hadnott

    There is one thing we can do. We can stop being pawns in the AMC game. I am willing to make less money in order to not become an AMC robot and do whatever I am told. If we independent appraisers stop working for the AMCs instead we just may be able to maintain our dignity.

  13. Nick Pumilia

    In my area the banks are hiring managment company and giving them a list of Appraisers they can use. Boy they realy fix the problem. Try this I tried to collect on and invoce called the bank to see why the invoce was not paid. Was told by the bank it’s not there bill it’s the managment company bill but they won’t give me the managment company name and the banks the only one on the order form. God bless the ones who put this group of rules together. (Ha Ha)Get ready for the next bail out plan.

  14. Corrinne Lane

    I have worked with management companies as well as independently and I find that the system now is out of kilter. I pay a management company to secure the work and pass it on for my acceptance or rejection. I then pay appraisalport a fee just to be able to accept or reject and upload the report so the management company can get it. When I tried to increase my fee to cover the extra fees, I was told impossible. Some how I do not think this is what congress thought they were passing. It has created a new way to milk money from the appraiser who has taken the education, passed the test and bought the appraisal software, etc. I read that appraisalport, one of the largest third party companies has over 150,000 appraisals per month. At the fee I pay which is $10.00 per order, that is alot of money per month being milked from the appraiser’s fees. This has to stop. Appraisalport raised their fees twice last year.I was not allowed to raise my fee even once. Our operating cost have gone up and after all,we are the appraisers who knows how much we need to charge to complete an appraisal.I thought it was supposed to be that the appraiser states what fee they are willing to work for and then the management companies and appraisalport tack on their fees to that. This makes more sense and keeps the appraiser independent.I will not even go there where the 1004mc comes in. I was not allowed to choose the fee increase for that form. It was dictated to me.This is not appraiser independence.I am constantly seeing a mortgage company ordering an appraisal through a management company owned by a larger lending institution and then that appraisal is ordered through appraisalport. I would think the cost could be kept to a minimum if the mortgage company would just cut out the first management company and order direct through the second one.The appraisal fee would be more for the appraiser and faster service for the original mortgage company or brokerage company. It would be far more independent also.

  15. Appraiser in Illinois

    Illinois passed a law in March that appraiser must put thier fee in reports ordered by AMC, we have had companies call us demanding we take our fee out why? what are they hiding? Its law and they tell us to break it!! I know for a fact one customer was charged 600 and he thought it was all the cost of the appraisal not even close the AMC took over 300 of the fee but didnt want us to disclose that to the client? why? again what are they hiding. Go Illinos keep the law on this we appraisers like it.

  16. Appraiser in New Jersey

    Fellow appraiser’s. The only way we will ever control our destiny is to get organized. We have let others control us for too long. Realestate agent’s, Banks, Mortgage Companies have their association and/or political action committees. We donot and have been pawns to those who use our service. If we donot become organized and have a voice in the system we can expect more of the same. Each state needs to form a strong appraisal association which can represent the appraiser, politically. We might want to consider forming our own appraisal management company (perhaps non profit) which benefits the appraiser doing the work. It will not be easy, but if we collectively become one instead of an unorganized group which has been manipulated by the system, perhaps we could get back the control of our business. We need to be proactive instead of reactive. Post what you think.

  17. David

    With regards to the previous post stating that appraisers must organized. My response is “When Pigs Fly”. Appraisers have already had 13 months to organize and fight HVCC. They have never taken the first step. Instead they prefer to give up 1/2 of their fees to the AMCs (banks) and now they agree to complete FHA’s ridiculous 10 new requirements (along with the 1004MC) free of charge as well. I’ve been appraising for 17 years but I lost respect for the profession over the past year. I am embarrassed to say that I ever was an appraiser after watching others agree to everything that’s asked of them.
    What will appraisers do when they’re asked to provide 12 comparable sales and a detailed 2 page report on every sale? Why they’ll comply of course. What will they do when the AMC tells them they must cut their fee to $100 per report to remain competitive? They’ll comply.
    People there comes a point in time when you need to ask yourself when enough is enough. When you ask yourself if you’d rather clean toilets than put up with government forced intervention. For me that time arrived months ago. I gave up my appraisal practice but kept my business phone line simply for the pleasure of telling AMCs what they can do with their orders.

  18. Mike

    This is the time to make yourself heard if you have not called your representative please make sure you do it.

  19. Carol Wolfe, SRA

    AMCs want 24-hour turnaround – even with my 27 years of experience and expanded knowledge does this make any sense. Have you ever had a Realtor or a Mgmt Company return your call for needed info in 24 hours!! AMCs are as detrimental to the appraisal business as licensing which did nothing but dumbed down
    the process as there is little if any enforcement.
    It’s a little late for me to change careers, but youngsters should forget it!

  20. Good Appraiser From NC

    Dont be afraid of AMC’s. They asked me to cut fees, I just laughed at them. Go get a trainee to do your low fee work. Let me know how that works for you. I stay strong on my fees and AMCs have been paying them. Everyone needs to do this, the AMCs will have no where else to turn to for low fee appraisal work. The HVCC, a joke. Already getting pressure because of HVCC. This will stop nothing! As someone said, the industry does not want good appraisers, they want good numbers. Everyone stay firm on your fees, and yes you will lose some, but it will come back when they start getting bad reports.

  21. Gregg

    Everyone needs to stay in the fight for what you believe is right . Do not sit back and wait for others to take action. This whole mess started from the top with govt wanting more affordable housing with crazy lending program and standards. The appraiser, mortgage brokers and realtors did not totaly create this.

  22. Gregg

    Everyone needs to stay in the fight for what you believe is right . Do not sit back and wait for others to take action. This whole mess started from the top with govt wanting more affordable housing with crazy lending program and standards. The appraiser, mortgage brokers and realtors were not the ones who created this.

  23. Chris Gelsinger

    I will not work for less than I’m worth. I am just going to get my license for another four years this year, but I am looking to do something else. I refuse to work for an AMC because they were the ones that started this whole mess. Hope fully in 3 to 4 years from now, I’ll have my dignity back. I’ve been doing this for 16 years.

  24. John Jenkins

    In my area, just as Nick said above, the banks, mortgage brokers, etc have given the appraiser’s names to the AMC’s that they want to use. Also, has anyone read the “Indemnity Agreement” you have to sign with most AMC’s. It says you will indemnify the AMC for all their expenses if they are sued over an appraisal you provided or any info they pulled from your report — ie the could provide comps to an AVM, get sued, and you would be responsible if there is an error. Don’t expect your E & O carrier to cover that either.

  25. Dear Appraisers: Where are you guys? It is time for some Righteous Indignation. Our Nevada Association of Realtors just sent me an e-mail claiming a victory: they have convinced the Nevada legislature to not only accept BPO’s–but also now EXPAND their use. I am not an appraiser, like you. I am a Realtor, 23 years in the business, who is outraged over the rampant misuse of BPO’s for the purpose of insider trading by a lot of bank reo and short-sale listing agents. I have attended seminars in Las Vegas where the room, packed with Realtors, was instructed in how to falsify a BPO, purchase the property as the buyer (with the seminar leader’s cash), find a guppie buyer to purchase at the higher price, and double escrow. And get a check for $20,000-$30,000 at the closing table, plus the commission. I am outraged. Many of my peers in Las Vegas are not. They want to know how they can get in on this, too. As long as banks accept a BPO—instead of requiring a qualified appraiser to appraise the home to establish the value—the carpet baggers will continue to rule in Las Vegas. I know many local appraisers, and Realtors like myself, who run across insider trading. My industry cannot and will not self-police. It is up to you appraisers to organize and go after the insider trading schemes of the real estate agents. Otherwise, you will spend many extra hours backchecking the MLS data every time you do an appraisal, verifying if you are using tainted information, which in many cases, you are.

  26. Dear Appraisers: Where are you guys? It is time for some Righteous Indignation. Our Nevada Association of Realtors just sent me an e-mail claiming a victory: they have convinced the Nevada legislature to not only accept BPO’s–but also now EXPAND their use. I am not an appraiser, like you. I am a Realtor, 23 years in the business, who is outraged over the rampant misuse of BPO’s for the purpose of insider trading by a lot of bank reo and short-sale listing agents. I have attended seminars in Las Vegas where the room, packed with Realtors, was instructed in how to falsify a BPO, purchase the property as the buyer (with the seminar leader’s cash), find a guppie buyer to purchase at the higher price, and double escrow. And get a check for $20,000-$30,000 at the closing table, plus the commission. I am outraged. Many of my peers in Las Vegas are not. They want to know how they can get in on this, too. As long as banks accept a BPO—instead of requiring a qualified appraiser to appraise the home to establish the value—the carpet baggers will continue to rule in Las Vegas. I know many local appraisers, and Realtors like myself, who run across insider trading. My industry cannot and will not self-police. It is up to you appraisers to organize and go after the insider trading schemes of the real estate agents. Otherwise, you will spend many extra hours backchecking the MLS data every time you do an appraisal, verifying if you are using tainted information, which in many cases, you are.

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