NAR_grey_logo-01

Mortgage Brokers Left Out of Process in New Appraisal Code

The Frank-Dodd Wall Street Reform and Consumer Protection Act sunsets the Home Valuation Code of Conduct (HVCC).  The Code is set to sunset upon promulgation of new appraisal independence requirements due out in October.

In a recent announcement by Fannie Mae, “The revised requirements will maintain the spirit and intent of HVCC.”  According to National Mortgage News, this means that brokers will be left out in the cold once again.  Said the article (subscription required), “the new standards will retain the basic tenet of the original HVCC — a prohibition against mortgage brokers and loan officers selecting or compensating appraisers.”

Comments
  1. Born Again Appraiser

    Oh how sad it is for the sales folks to be unable to control the audit side of the transaction

  2. There is no need for sarcasm. It doesn’t become you as an appraiser. We are having problems with appraisers playing God now. One instance they wanted the car parts and cars removed from a home that had just gone into escrow – that had tenants. The parts were the tenants’ and they have the right to keep them there until they move. There is already a clause that states all “garbage” or rubbish shall be removed. We are now in the position of asking tenants to comply with appraisals. Appraisers going back to check that their conditions are met WITHOUT an appointment or confirmation from the Realtor that the conditions were met – and charging for it if the conditions were not complied with. Wrong wrong wrong.

    What goes around comes around. No one wants to control this. Just that it be fair. The reign will end. NAR is here for that.

  3. It is a real shame that government thinks they can solve the value issue. since the enactment, I have seen a total lack of professinalism with appraisers not knowing ares, running through a property in minutes, no measuring, acting like they can travel 150 miles and know an area. I have had value spreads on a $500,00 of $150,000 difference! Totally not acceptable! This adminstration has damaged the US for decades to come, god help us all

  4. Ms. Concern

    The mortgage brokers are still selecting the appraisal companies. In the end it’s still the consumer that “gets it” in THE REAR END..

  5. Michael A. Krum

    I’m a Certified Residential Appraiser and have been in the real estate business for over 32 years 1st as a Broker and for the past 20 years as an appraiser so as you can see I have set on both sides of the table.
    My comments for real estate brokers AND commissioned loan officers………quit whinning!!!! And legislators….stop caving in every time someone tells you there is a better way….that “better way” of the direct hiring of the appraiser by the commissioned loan officer accounts for a substantial portion of how we got in the mess we are in…..If you have a good home, a good buyer….no appraiser is intentionally trying to ruin your deal!!!!! This system has to remain sound as we can not repeat this again…..this is a near repeat of the Savings and Loan scandal…..everything was tightened up to make sure that didn’t happen again and then people started whinning and the government started caving in and here we are again with the exception that the hole we are in now is much, much larger than before…..lets do business above board and the way it should be done!!!

  6. REALTOR

    Appraisers should not have access to the contract. Isn’t the whole point to get an independent valuation of the property? If that is so, then why does the appraiser need to see the contract? The appraiser should value the property and the lender should authorize the loan if the appraisal is within 5% of the sales price, which would allow for a reasonable margin of error.

  7. Robert Nunez

    Appraiser Michael Krum is right on with his comments. The major problem with this real estate industry now is that there too many inexperienced new people involved who want to continue getting an easy commission without knowing much of anything and serving the consumer poorly. Learn the business properly, stop your whinning and concentrate on giving the consumer exceptional service.

  8. Appraiser/Realtor

    There are plenty of rules, regulations, compliance mandates for appraisers. More of the same is not going to change anything. How about the government just enforce what we already have in place. HVCC or it’s results do not provide a better product. More enforcement would put a stop to appraisers traveling 3-4 hours in neighborhoods they have no competence in…. empty threats do nothing.

  9. Appraiser

    I wish we (appraisers) didn’t have to look at the contract. Be careful what you Realtors wish for, because if we didn’t know the contracted price, many more appraisals would fall short of the sales price. We are being asked to provide far more information than in the past and with much stricter guidelines (scope) than ever before. The time it takes to do a competent appraisal has doubled and our fees have been cut in half. That is litterally a 75% reduction in pay. No appraiser can afford to travel 150 miles to do an appraisal; it makes no sense moneywise. Just saying.

  10. Thomas G. Sadler

    I will admit that appraisers were part of the problem that caused the crash of the past 36 months. However, they were only part of the problem. My wife and I are rural appraisers and we do a fair amount of reviews. You wouldn’t believe the crap that some urban/suburban appraisers hand to their lenders and expect it to pass muster with the underwriters when attempting to handle rural appraisals. So yes, we have some crap appraisers out their but this crash has weeded out quite a few of them. What the processors or clients need to do is stop using AMC, develop a relationship with a good, honest certified residential appraiser and let them handle your work. When you hand your work to an AMC you immediately cost your company an additional 20 to 50% more than if you had your own independent appraiser. Plus, the independent appraiser, the honest independent appraiser, will handle your job with a much higher degree of accuracy without an AMC breathing down their necks constantly asking for updates.
    As far as the brokers & realtors being left out of financial reform bill I don’t see the problem. They aren’t appraisers and have no business pretending that they are i.e. BPO’s. The only thing I would have added to the financial reform bill concerning brokers and realtors would be a law prohibiting BPO’s with a jail term. I don’t try and sell property and they should not try to pretend they are appraisers.

  11. Why the appraiser is given the contract:

    The sales contract is provided to the appraiser for multiple reasons. As part of the appraisal reporting process, the appraiser provides an analysis of the contract in comparison to market activity. This analysis is utilized by the lender as part of the lending decision and to understand if any consideration (sale price) is for non reality items.

    The sale contract, assuming it meets the standards of an arms-length transaction, is current market transaction reflecting the actions of the market. As such it is a critical piece of data important to the appraisal process that must be considered.

    What must be remembered is neither the contract nor any one sale should be the sole basis of a credible opinion of market value but only considered as part of the larger data set examined by the appraiser.

  12. The Real Problem:

    While Realtors, Appraisers and many in the lending community have bemoaned the changes caused by HVCC it seems odd that it has taken so long. As part of financial reform act of 1989 federally regulated lenders, not brokers, have been required to ensure the appraisal process is free from bias (See Interagency Appraisal and Evaluation Guidelines). The 1994 revision to the interagency guidelines specifically outlined the rules banks were to follow when selecting the appraiser and its requirement to implement a system that did not allow those in loan production to order appraisals. It only took 18 years, an economic meltdown and a law suit to get not only federally regulated lender but brokers to abide by the rules from 1989.

    The real problem is not the rules as the existed, exists or as they will be once revised. The problem is how the process is now being carried out. Many lenders use a rotation list, where an appraisal assignment is given to the next appraiser in line, as opposed to the best qualified or the process is outsourced to a vendor management company that makes the appraiser selection based on who will do the job the cheapest as opposed to who is best qualified. This is how appraisers who are not properly qualified, competent or equipped to do the appraisal receive assignments.

    There are ways to address these problems but today the lending community is operating out of fear of overzealous regulators who do not understand the regulation. As lenders realize that using a rotation list or simply outsourcing this responsibility does not free them from the liability of bad appraisals, they will become more involved in ensuring the best available appraisers are assigned to each request. What we must hope for is that it does not take another 18 years or financial crisis for this to get figured out.

  13. Tim In Fla

    Anybody bother to check FNMA/FHLMC Seller Serving Updates the last couple days ?

    New guidelines comming in December. We have had HVCC, we have had a change to upload reports via XML format, wer have added MCS form, additonal comps requirements, AVM checkbox reviews, and endless stream of lender “add on” conditions. Now this;

    To be released in December a standardized reporting format with standardized verbiage, standardized line items description and reporting. So now we have all seen what happens when we are expected to value to the lenders AVM. (Some AMC’s provide that upfront with the “comps” they expect you to use.) Now with standardized verbiage and report layout and format who can tell if the appraiser is 1.) Experienced with years in the business or a newby with the memo. 2.) Completely in line with data stealing and manipulation for data base inclusion and to refine their AVM’s 3.) A change to collateral value versus market value.

    If everything is expected to be appraised tot he median why bother improving your property past typcial maintenance. Why do we need sales people for marketing of properties when everyone knows what the median value is for the area. BPO’s not needed, just pull the AVM. Manipulation of equity gain by investors is also at hand here. Better buy it cheap and don’t put to much into it as the value will be the median.

    There is an apparent shelf life for the residential appraiser. Unless the homeowners of America stand up and fight for fair “on site” valuations and some degree of independence is given in the reporting of the appraisal we are at a point where homeownership as an investment vehicle is outdated. Without equity gains beyond the median a residential dwelling is a depreciating asset. It would be better to rent and invest money in another area.

    As far as the other topics; I can only say that I understand why some of these AMC appraisers try and get in extra inpsection fees. They are being paid squat in the first place. So any little bit extra helps pay the Top Ramen bill. As far as the sales contract; I have heard this many times but the fact of ther matter is we do need to see; legal description, and other parties to the agreement, if the contract can be assigned, and seller concessions and contributions. (As well as USPAP requires it). These are fairly obvious but as noted above, if your contract was for $100,500 and the appraiser flying blind hits the number at $100,000 you have just wasted 45-60 days and renegotiate with the seller, or worse, third party approval department and now your rate locak has expired and you start all over again so add another 45-60 days. I don’t think any Realtor or Loan Originator want to look at deals that take 90-120 days OR MORE to close.

    Appraisal Independence should be free from all parties. Those who want to make the deals work and those who want to make the loans work at reduced risk with high profit margins. AMC’s should be banned and real live trained Underwriters returned to the lenders staff instead of outsourced checkbox review in New Dehli. But then again that wouold reduce profit margins and bonus checks would have to come down for managers and bank executives. Probably not goinbg to happen.

  14. The Solution:

    As Realtors we are committed to ensuring our clients are well represented. This means the Realtor should be proactive in the appraisal process. Here are just a few suggestions;

    Before setting an appointment be sure the appraiser is knowledgeable about the market where the property is located and that they have access to information they may need to complete the task. Example questions could be; do you have access to the local MLS, where is your office located, where do you live; ask them to identify any other properties they have appraised in the area. If believe there is a problem contact the lender immediatly and then follow up with a written notification of your concerns.

    Always meet the appraiser at the property during the inspection.

    Before you allow entrance into the property, if you don’t know the appraiser, ask for a picture ID (both for your own safety and to ensure the person inspecting the property is the appraiser assigned to do the appraisal).

    Provide the appraiser with a written summary of information about the property, information about the actual age, date of renovations, upgrades or other special features that may affect the value can be very helpful.

    Provide information about recent sales (within the last 90 days) that are similar to the property being appraised, especially those that may not be listed in the MLS. Of course this research is the responsibity of the appraiser but this way you ensure the data you think is most relevant is considered.

  15. Appraiser 2

    USPAP Standard 1-5 states…..

    “When the value opinion to be developed is market value, an appraiser MUST (emphasis mine), if such information is available to the appraiser in the normal course of buisness:

    (a) analyze all agreements of sale, options, and listings of the subject property current as of the effective date of the appraisal; and
    (b) analyze all sales of the subject porperty that occurred within the three (3) years prior to the effective date of the appraisal.”

    (U-20 of 2010-11 USPAP).

    If you don’t like appraisers “looking at the contracts”… take it up with the folks in DC.

  16. Appraiser

    The reasons we need to see the contract: What seller concessions are there, is there a rate buydown buit into the sale price, what and what kind of personal property are included in the sale, are there disclosures that should have been made by the seller that perhaps the seller did not disclose that the appraiser noted in their inspection i.e. wet basement, foundation issues, etc…..I’m sure there are other reasons…

  17. edgray

    AMCS are now the problem. Short changing the appraiser.The problem with mortgage brokers was getting paid for the appraisal. Appraisers that succumbed to pressure shouldn’t be appraising – and perhaps shouldn’t be married.My wife pressures me every day. The REAL ISSUE was and IS getting paid for the work we do. We have expenses too!

  18. Baron

    To just a thought:
    I realize that most appraisers are not masters of diplomacy nor will many of them win personality contests. They are usually working under the gun and they don’t make the rules. When they ask for such things as cleaning up car parts it is to make a better impression on the underwriter who is THE person who decides if the loan is approved. When they advise you to do certain things to your property they are doing it for your advantage, not to play control games. They know what helps the appraisal presentation. Because of government pressure and underwriters demanding more work (for the same fee) to cover their tails it has not been a joy completeing appraisal assignments. Then you have FHA reviewers (after the fact) with magnifying glasses ready to report an appraiser to the licensing board for a typo or overlooking a checked box on the form and then accusing him/her of fraud. It just gets funner folks. The people can start reform by voting out the cause of this fiasco in November.

  19. Appraiser

    The most damaging thing that happened to the appraisal industry is when licensing was enacted. That killed the profession from that day forward and it has gone to hell in a hand basket. It opened the floodgates to thousands of people thinking appraising was easy money, so they went through minimal training, then went out on their own to generate lender-clients by cutting fees and basically promising they will hit the number for continued work. This, plus properties being listed at a ridiculously high price and then having an incompentent appraiser doing the appraisal. Presto..a house that sold considerably above market value. When this happens thousands of times nationwide, this helped mushroom the housing problem we are now in.

  20. Jerry

    Boo Hoo,

    Excuses are like _________ tastes like meatloaf.

    If you take pride in your work and are sweat with the details, no one can touch you – no matter how far you travel…

    If you suck, and spit out every excuse you’ve read to blame why you still suck further – then you will maintain your lame status quo….

    Up your game

  21. I have been dealing with the appraiser being god since Monday. I will attach a letter to the HVCC company and they only brough it up 15K I will also attach the response from the HVCC company. Who by the way told the appraiser his comps were no good and to lower his first appraisal.

    To whom it may concern.

    I have been doing a lot of research on this appraisal for the property at 1861 Osprey Bluff, and I want to assure you that I am not here to make every ones life difficult. I have worked this Real Estate Market for 13 years and when I see an mistake I am not going to let it get unnoticed. The buyer wants to purchase this house because it she loves it and it fits the needs for her family, such as school district, lot size, bedroom configuration etc. We have looked for months and this was much cheaper then anything else she found.

    I understand the HVCC process but with that said, solid comps of similar age quality and with in a mile radius have not been included in this report. Factors that were not noted, not because the appraiser was wrong, but because the listing agent (REO) agent did not put it on the MLS will and do affect the value of this property.

    These are as follows
    1. a boat slip which is attached to the property. (I have confirmed this with the attorney that filed the papers for the homeowners association) I can get further information on this from Head Moss and Fulton attorney John Moss at (904)278-8200

    2. There was a room addition that is not showing up on the tax records. I confirmed this with the original owner who built the house and lived there for 20 years. There is a discrepency in the previous appraisal and MLS listing of just under 400 square feet. I have sent this information in a previous email.

    3. The Comp # 1 was a 203K Loan that appraised at $186,000 but sold for $145,000. It needed a roof all appliances have attached the appraisal in this email.

    4. There is another comp with in 1 mile that was built in 1987 recently sold that needed a kitchen remodel that closed in August of 2010.

    Follow this link to see the page:
    Click to view listing(s)

    This link will no longer be available after 10/21/2010.

    5. The lot size on this property is .75 acres verses .5 acres or less on the other properties used.

    I understand that I am not an appraiser but the fact that this agent has had MULTIPLE offers on this property is indicative of true market value.

    Please take this under careful consideration since it is my obligation to my buyer as her representative to make sure she gets this house.

    Response from the HVCC company….

    THIS APPRAISAL FILE HAS BEEN RE-OPENNED FOR RE-EVALUATION AT THE REQUEST OF THE LENDER AND THE LISTING AGENT, BASED ON
    FACTORS THAT WERE PREVIOUSLY UNKNOWN OR NOT DISCLOSED TO THE APPRAISER. THESE ITEMS ARE LISTED AS FOLLOWS:
    1. HEATED AREA DISCREPANCY
    THE LISTING AGENT HAS COMPLAINED THAT THE APPRAISER MEASURED THE SUBJECT PROPERTY INCORRECTLY BASED ON A PREVIOUS
    APPRAISAL SKETCH PROVIDED TO HER BY THE OWNER. AS A RESULT, THE APPRAISER REVISITED THE SUBJECT PROPERTY TO DOUBLE
    CHECK THE MEASURMENTS AND FOUND ONLY ONE SLIGHT DISCREPANCY. THERE WAS 24 SF OF AREA MISSED WHERE A 4X8 SECTION OF
    THE UTILITY ROOM EXTENDS INTO THE GARAGE. THAT CORRECTION HAS BEEN MADE ON THIS REVISED APPRAISAL REPORT TO BRING
    THE TOTAL HEATED AREA TO 2,378 SF. IT SHOULD BE NOTED THAT THE LISTING AGENT SHOWS A TOTAL HEATED AREA OF 2,297 ON THE
    MLS LISTING.
    2. THE LISTING AGENT INDICATES THAT THERE WAS A BOATSLIP INCLUDED WITH THE HOME WITH A MARKET VALUE OF $15,000.
    THERE IS NO MENTION OF A BOAT SLIP WITHIN THE SUMMARY OF THE MLS LISTING. THE APPRAISER COULD FIND NO MENTION OF THE
    BOAT SLIP IN THE CONTRACT FOR PURCHASE PROVIDED TO THE APPRAISER. IN ADDITION, THE APPRAISER IS ONLY QUALIFIED TO
    APPRAISE THE REAL ESTATE. THERE ARE NO OTHER SALES OR COMPARABLE PROPERTIES WITH BOAT SLIPS TO DERIVE A REFERENCE
    FOR THE BOAT SLIPS MARKET VALUE, THEREFORE, THE BOAT SLIP OR ANY CORRESPONDING VALUE WILL NOT BE INCLUDED WITHIN THIS
    APPRAISAL REPORT.
    3. COMP #1 – 1892 OSPREY BLUFF BOULEVARD
    COMPARABLE #1 WAS AN ‘REO’ LISTING AND USED AS THE ONLY COMPARABLE SALE WITHIN THE SUBJECT SUBDIVISION. THE LISTING
    AGENT COMPLAINS THAT COMPARABLE #1 WAS INFERIOR IN CONDITION TO THE SUBJECT AND REQUIRED AN FHA 203k FINANCING TO
    INCLUDE THE COST OF REHAB. FURTHER INVESTIGATION DID IN FACT REVEAL THAT SALE #1 HAD A LOAN AMOUNT OF $181,400,
    APPROXIMATELY $36,000 MORE THAN THE ACTUAL POSTED SALES PRICE. ALLOWING FOR CLOSING COSTS, THE APPRAISER CAN ONLY
    MAKE AN EXTRAORDINARY ASSUMPTION THAT THE COMPARABLE REQUIRED APX. $30,000 IN RENOVATION. THIS RENOVATION MAY HAVE
    BEEN SUPERIOR TO THE SUBJECT’S CURRENT CONDITION, THEREFORE, AN ADDITIONAL ASSUMPTION WOULD HAVE TO BE MADE THAT
    THE CORRECT ADJUSTMENT SHOULD BE $15 TO $20,000 FOR CONDITION. THIS CHANGE HAS BEEN MADE ON THE REVISED REPORT AND
    LITTLE WEIGHT IS GIVEN TO THIS COMPARABLE IN THE FINAL ESTIMATE OF MARKET VALUE.
    4. SUBJECT LOT SIZE
    THE SUBJECT IS SITUATED ON A LARGER LOT THAN SOME OF THE COMPARABLE PROPERTIES. THIS IS MAINLY DUE TO THE
    REQUIREMENTS FOR HOMES THAT UTILIZE SEPTIC SYSTEMS AND WELLS FOR DRINKING WATER. A LARGER LOT IS REQUIRED FOR HOMES
    WITH SEPTIC SYSTEMS BECAUSE THE WELL MUST BE LOCATED AT LEAST 75 TO 100 FEET AWAY FROM THE SEPTIC TANK. AS PER FNMAE,
    FHA AND USDA GUIDELINES, LARGER LOTS ARE CONSIDERED TO BE ‘EXCESS LAND’ AND NO ADJUSTMENT IS ALLOWED. ALL COMPARABLE
    PROPERTIES HAVE SIMILAR USEABLE LAND AREA.
    ADDITIONAL COMPARABLE SALES HAVE BEEN ADDED AT THE REQUEST OF THE LISTING AGENT TO HELP ESTABLISH A REVISED ESTIMATE
    OF MARKET

  22. John

    What’s your problem with appraiser’s seeing and analyzing sales agreements? The only problem is if the appraiser or agent is unethical (in which case he/she should get out), or the sales agreement isn’t SIGNED by both parties (and therefore is NOT a sale), or if the sales agreement is messed up for some reason, in which case the appraiser can help. Many times there are mistakes, or issues with the legal description, or the $30k personal property included, or the agreement lacks that last page (with the sale price, date signed, etc). It’s just one of at least a 1000 things a competent appraiser does on a file on behalf of the client. Look at the definition of market value – it’s basically knowledgeble buyers and sellers arriving independently at a negotiated price. If you need to be told how to think or are concerned your fragile mind and professional standards might be upset by seeing something – leave your head alone, grow up, or get out! As far as agents go, if you do a good job with your research and your buyers/sellers there is almost no chance a competent appraiser will kill your deal.

  23. The good and honest appraisers have an unbelievalby hard job for linadequate compensation. They should pay appraisers higher fees – after all they are evaluating the legitimacy of the price for the loan. They should allow appraiser more lattitude with their opinions, because sometimes there are simply no good comps at the moment.

  24. Penny Skaff

    Realtors should be doing a thorough market analysis before marketing a property, not just asking a seller how much they want. That way they would be selling in the right price range to start with. Appraisers should not have access to the sales contracts. THEY SHOULD BE DOING THE JOB, AND IN A REASONABLE PERIOD OF TIME! Appraisers should also not be playing God, just do they job they are hired to do. These factors are important to our industry and to the public. If it was handled in this way there would definitely be fewer problems. Also sending an appraiser fifty miles or more from their base has to be the most assinine thing I’ve ever heard.

  25. As of 10/18/10, per my understanding. We (the appraisers) are supposed to be paid “reasonable and cusotmary” fees. The AMC’s are charging the homeowners $450-$500 for appraisals and trying to pay us $200-$300. The $300 is usually after you tell them you want a fee increase up from $250. I encourage ALL APPRAISERS to make sure that you request at least $400 for an appraisal. With all the new requirements, it takes me 3 hours longer to write an appraisal, i.e. additional listings, more comps, more comments on things that do not pertain to the value. If you drive 150 miles, like these realtors are stating, appraisers would make less than minimum wage for there services. I would love to see us(the appraisers) ban together and go on strike. That is the only way we could get the voice we need for higher fees. That would bring the whole market to a standstill and we could be heard due to the fact that loans would not be able to close, sorry realtors.

    AMC’s have no right to collect OUR MONEY!!! Then give us 50% of it 6 weeks later when they collect OUR FEE up front and they expect a credible appraisal in 48 hours and call and e mail us every day further delaying the process. I am going to make a standard letter that I can send to all AMC’s after 10/18/10 with verbage in the Dodd-Frank bill that states we are to be paid a reasonable fee. The AMC’s are crooks that are living off of OUR MONEY. I have enough clients that pay me reasonable fees so when an AMC wants a complex appraisal for $225, I tell them to SHOVE IT or pay me for my service. As long as appraisers accept these fees, that is what we are going to get.

  26. LOOK APPRAISERS, WHILE I WAS WRITING MY LAST RESPONSE, I GOT THIS ORDER THAT I AM TURNING DOWN. THEY WANT 3 ADDITIONAL LISTINGS AND WANT TO PAY $225 WHEN I BET YOU THEY COLLECTED $450. THEY ARE NOT LICENSED AND DID NOT DO AT LEAST A 2 YEAR APPRENTICESHIP AND THEY ARE ALLOWED TO RAPE OUR FEES!!

    Property ID: 5644852
    Property Address: 2654 Tinosa Cir , Pensacola, FL 32526
    Form Type: Appraisal Form-1004
    Lender/Client: Power Valuation Services, Inc
    1525 S Beltline Rd
    Coppell, TX 75019
    Due by: 8:00 AM PST on Wednesday, September 29, 2010
    Compensation: $225.00

    Assignment Specific Instructions:
    Interior Instructions:

    Please log into your Clear Capital account for contact information

    Comparable Requirements:

    Listings: In addition to the closed sale comparables, provide a minimum of 3 listing comparables or pending sales that support the value conclusion.

  27. I am glad the to see the sun setting on this ridiculous rule , it sounded great on paper but does work in life transactions.

    Business is people doing business with people not HVCC management companies that do not have the customers dreams in mind, they do not care about timeliness or accuracy, they will just get another order from the next lender. When someone can hid behind the curtain they have no reason to perform at the best of there abilities.

    The lenders do not trust the appraisal because they do not know who is doing them. Do banks not have money to lend or do they just not know what they are lending for?

    To the folks that manipulated the pricing at the markets highs, shame on you! It may have been quick money, but where are now….. They are gone on to the next scam to make a quick buck.

    I have always said the rules we have in place just need to be enforced; maybe we just should not hand out licenses to do business after a three hour test! It’s not some else’s problem it’s all of ours, wake up pay attention and provide professional service to your clients that trust you to so!

  28. madashell

    I too have had my problems with an appraisal, Basically it ends up that an appraiser is goingto decide whether you get you well deserved paycheck or not. Everyone looses when you get an inexperienced appraiser. I recently had a deal fall through because of such. I worked on this for almost 2 moths I had a buyer who offered full price and paid most of the costs. I had a seller willing to sell. I had an appraiser who decided to use gutted REO’s and othe unlike properties as comps. There were really no like properties that sold in the last year even let alone in the last 3 months. Anyways, The area we are in is improving in values, The nice well maintained homes though are being compared to gutted out junk. I rebutted the appraisal and so did the buyer. But the appraiser is God here and he now kept a buyer from getting the home they wanted and a seller who needed to sell their property and a real estate agent that brought them together for an easy transaction that should have just flew through. But the appraisal came in way short. There was a 1064 sq ft brand new garage workshop just built on the property that the appraiser called a single car garage. I got no adjustment for it. There were 2 other single car garages on the property with work benches and storage etc. plus a remodeled 3br 1 ba ranch home. I could not get the appraiser to come up one bit. He has had his license for only 1 year and obviously wants the market to stay in the dumps. I am not happy. If they would start comparing apples to apples then we would see the market rise and more sales made. Hopefully in a few months when all the garbage is off the market my buyers will still be interested and we can start it all over again. when you have a willing buyer and a willing seller and 20% cash down an appraiser should not be the final decision maker.

  29. I am also a mirror of Michael Krum – I am a long term licensed Broker and Certified Residential Appraiser, with the latter Appraisal services over 24 years.

    Appraising is both a honed skill and an art. It is not a profession that someone can just take a couple of classes and start appraising.

    I have never bent to any lender, broker, agent, owner or buyer, to change a value to “Match the deal”. There have been a few hints over the years, but these are quickly put down and I would like to think my work brings back clients because of the accuracy, honesty and ability to really understand Market Values, cyclical markets and specialized property types and areas.

    The Appraisers have too often been the scapegoats for poor broker/agent representation, greedy loan brokers and their employees and fraudulant deals. A good appraiser can eyeball a phoney deal and pick up on erroneous data very quickly, and if that appraiser continues and adds to the problem, he or she should be the first one kicked out of the profession.

    I didn’t understand the need for HVCC – but I believe that is because I have kept myself above the frey and provide honest appraisal services. I have been asked to review appraisals and have seen some incredibly stupid report mistakes and yes, false data, and when it is pointed out, too often, nothing is done to confront the appraiser and/or the loan broker(s) or bank loan processors responsible.

    The bad appraisers used to be far outweighed in numbers by the really good, honest and skillful appraisers, but because of HVCC and these utterly ridiculous fees that some appraisers are willing to work for, from AMCs owned and run by the very banks the AMCs are supposed to assure annonymity of those appraisers, the ranks of good appraisers have thinned tremendously – I read of one mid west town where there was only one appraiser, a very active selling and refi market now – and his turn around time was up to 5-6 weeks, he’s so busy. Before there had been 6 appraisers in the town. Five have turned tail and dropped out of the business.

    To the good appraisers who’ve hung in there, keep hanging, don’t let your fingers go dead on the ledge. This too shall pass and we’ll need every really good, honest and accurate appraiser that can be found when the market turns back up again, (and it will). Despite how bad or good the economy can be – the Real Estate Markets are ALWAYS cyclical, so hang in there and keep those honest appraisals coming and keep pressing for justified fees.

  30. IT SEEMS TO ME THAT EVERYBODY WANTS A PIECE OF THE PIE. APPRAISER CERTAINLY NEED TO PAID FOR THEIR WORK WHICH IS TAKING LONGER NOW FOR SURE DUE TO ALL THE GOVERNMENT MANDATES, NOT TO MENTION EACH COMPANY’S LITTLE QUIRKS THAT THEY WANT OR NEED TO SEE BECAUSE OF THEIR (APPRAISER WANNABEES) UNDERWRITERS. I GUESS WE NEED TO SEE THE CONTRACTS NOW, BECAUSE THE BANKERS CAN’T READ OR PORTRAY TO US WHAT THE FINANCIAL SIGNIFICANT THINGS LIKE POINTS OR SELLER CONCESSIONS ARE LISTED IN THE CONTRACT.
    IN SOME STATES IT IS ILLEGAL FOR A REALTOR TO HAVE AN APPRAISAL LICENSE – HOW INTELLIGENT ARE THEY – BRILLIANT!!! HOW DO YOU EXPECT AN APPRAISER WHO HAS A REAL ESTATE LICENSE IN A SPECIFIC FIRM WHO BELONGS TO AN MLS SYSTEM TO DO AN UNBIASED APPRAISAL EVEN IF HIS FIRM IS NOT CONNECTED TO THIS SALE? MY GOD, THE NEXT SALE MIGHT BE HIS, AND HE WOULD HAVE TO OR AT LEAST HOPE ANOTHER APPRAISER/REALTOR TO DO THAT APPRAISAL AND (TAKE CARE OF HIM). I THINK THE GOVERNMENT NEEDS TO START AT THEIR COMMERCE OR LICENSING DEPARTMENTS, AND MAKE SURE NOBODY HAS A DOUBLE LICENSE. THAT’S WHERE THE CLEANUP NEEDS TO START. AND TRUST ME, I KNOW THERE ARE SOME APPRAISERS OUT THERE THAT NEED TO BE SLAPPED UP TO GET SOME COMMON SENSE, BUT HUD DOES HAVE REGULATIONS THAT WE HAVE TO ABIDE BY OR IT IS FRAUDULENT. SO WHAT’S WRONG WITH DOING WHAT IS RIGHT? EVENTUALLY THE HOUSE WILL SELL, AND MAYBE SOME REALTOR WILL ACTUALLY HAVE TO (WORK) A LITTLE HARDER TO SELL THE PROPERTY – WOW! WHAT A NOVEL IDEA.

    I CERTAINLY DON’T THINK APPRAISERS FROM OUTSIDE 80 TO 100 MILES FROM A PROPERTY SHOULD NOT BE ALLOWED TO RAIN ON THE LOCAL’S PARADE. I HAVE SEEN MANY THAT COME A COUPLE HUNDRED MILES FOR $225, GATHER SOME DATA, AND HURRY ON TO THE NEXT DATA GATHERING OPPORTUNITY TO SEND BACK TO THE PARENT FIRM TO HAVE THE DATA INSERTED AND PROVIDE A GOOD GUESS AT THE VALUE. HELL, ANY BANKER COULD SIT BACK IN THEIR OFFICE AND USE A DART BOARD AND DO JUST AS WELL. I HAVE DONE MANY REVIEWS ON THESE TYPES OF APPRAISALS AND IT IS HORRIBLE. LOTS MORE HORROR STORIES ABOUT THEM NOT COMING IN HIGH ENOUGH BECAUSE THEY DO NOT KNOW THE LOCAL MARKET AND WHAT IS SHAKING THERE. SHAME ON THEM AND THE COMPANIES THAT SEND THEM OUT!!!!

  31. Jack

    If the agents would price houses properly, without having to reprice it 2-3 times, there wouldn’t so many value problems.

    Clear Capital, HAHAHA ….don’t forget the two day turn times.

    If these AMC’s would get off our butts and quit harassing us ten times a day we might get them done sooner.

  32. The whole HVCC mess is a classic case of knee jerk legislation. Rather than enforce laws and rules that are/were in place; let’s create more new laws and really confuse the consumer and create more havoc in the market and cost people more money.

    To have some one like Senator Dodd even/still in office reeks. I guess everyone has forgotten about his favorable treatment for home loans for himself he obtained from Countrywide. Now he still sits in his position with his “holier than thou” attitude. The HVCC never should have come into place. It benefits nobody. I recently had a case where my buyer was charged $360 for the appraisal (which pre HVCC would have been $275) and then on top of that an appraisal review fee to the lender of an additional $150 to review the appraisal done by the appraiser they selected! This cost the buyer an additional $235 and the appraiser was paid $230, $45 less than pre HVCC. So the appraiser made less, the consumer paid more and people like Senator Dodd see this as good? Get real.

  33. Brian W

    “Brian” and “Barry” you are dead on with your comments. “Madashell”, comps are hard to come by these days even for experienced appraisers. Alot of markets have or are bottomed out. Keep your chin up! Change is inevitable and good appraisers have embraced those changes brought on by the HVCC as they will weed out the undesirables.

    Appraisers, the fee issues should work themselves out in the next 12 months but you must stand your ground like “Brian” said. AMC’s will be around in one form or another, so sign up with all you can (50 at a minimum), and do those assignments with acceptable and customary fees for you market area. Appraisers, take more courses, get more familiar with technology to aid and support your conclusions, make more comments in reports, and if you say you’ll have it back by a certain date and time, get it done.

    Agents (and I’m a licensed Broker too) do more research into your list price, recheck it often with new data, get to know an appraiser, ask how we do what we do, go on an inspection with one. The more you know about appraisal techniques, the better you will serve your client. I was around when it was as easy as sticking a sign in a yard and inputting the listing in the local MLS. Agents can and should call an appraiser they know for assistance with a list price or even get an appraisal prior to listing. This does not happen as often as it should. We all have alot to learn from one another, if we’ll just listen.

  34. Professional CGA

    I too think the problem began with the licensing process. Three courses and a test does not make a professional appraiser. Experience does. There are a number of appraisers who easily take tests and become an appraiser who know nothing but the bookwork about appraising real estate. We also have underwriters who have no idea what the process is about. A lot of the underwriters are 21, 22, and 23 year olds with a couple years of college. They read a book or two and that makes them qualified to be an underwriter!!!!! Any high school kid can take a book and make check marks. They do not realize that FNMA guidelines are guidelines and in some instances, particularly rural areas, those guidelines should be treated as such. I have been a certified appraiser ever since the licensing law came into effect. Yes, it was the biggest mistake ever made. Quality of appraisals and professionalism suffered tremendousely with the enactment of this law. There were professional organizations which offered designations and continuing education. These organziations policed there own and the quality of appraisals and professionalism was much greater than in today’s market.

  35. Steve S

    I am a Realtor, Mortgage Broker and CPA. It reads to me, with all the finger pointing, that many of you just don’t get it. We all need to work together to provide the client with competent and timely services. Isn’t it truly them that we work for? To the Realtors…..Do you really want your client to buy a home that doesn’t appraise, just so you can make a commission? To the Appraisers….Do you really want to drive an hour to perform work in an area you are not familiar with? and Shouldn’t you consider all the information provided by all parties in an unbiased manner in determining the value? and shouldn’t this be done without taking into consideration the fee earned or the amount of time already spent on an appraisal?

    The biggest problem I have with this entire change to HVCC was that many highly qualified appraisers are out of business. They were replaced by HVCC compliant companies (owned in part by the banks) which collect the fees for the appraisals and give the job to the lowest bidding appraisers without considering their experience, location or quality of work. The new list of “approved” appraisers is based purely whether you had a contact that could refer you to the HVCC company and get you access to the system. This left many well qualified appraisers out of business. It is a shame that the government did this. However, I guess the government was glad to sell out the self employed that do not appear on the jobless claims figures to create what would be perceived as thousands of “new jobs” paid by the HVCC companies.

  36. Bill

    I would like any appraiser to tell me why NO home we have sold in the past year has
    appraised for the same selling price as one which has sold in the same development a mere 60 days prior. I am regularly told that we Realtors need to understand that it is a declining market.. Well with that being the parameter how would a market ever change. If you appraise a home for 20k less than the home next door it doesn’t take a nuclear fiss-a-sist :-) to realize what the neighborhood values are going to be like in 2 yrs. Gee why are so many homeowners under water on their mortgages hummmmmmmmm

  37. Jack

    Bill-

    Depends on your market. Our market (suburban Philladelphia) is mostly flat, with some areas declining and others appreciating. I live in a carriage home community. When we bought our unit in 2005, the median was $575,000. Last year the median was $530,000. This year it is over $600,000. So this mantra by brokers that appraisers are at fault indicates a less than thoughtful statement. Or, maybe that’s just your market that it is declining based on buyer demand.

  38. So Cal Appraiser

    TAVMA DOESN’T WANT’ TO PAY WHAT THE APPRAISAL FEE SHOULD REALLY BE
    TAVMA who represents Appraisal Management Companies, believes that the effective date should be delayed under Title XIV Section 1400(c)(3) until after a formal rule making process. Additionally, they believe that the provision should not be adopted yet, because the “customary and reasonable fees” requirement is not an appraisal independence requirement. Further, the fee provision was added late in the Congressional Conference Committee process and never received any meaningful legislative discussion or clarification.

    TAVMA justs doesn’t get it. The reason for this legislation is because Congress knows Appraisers are not getting paid enough by AMC’s to pay their bills and Appraisers are leaving the industry in droves. That is why they cannot include AMC Fees in the final survey. TAVMA is ignoring the many 3rd party surveys already done. AMC’s put all Appraiser’s against each other. They would call and say, “for you to get any work, other Appraisers are doing them for $200 and there gettng all the work”. Pressure from AMC’s is more than anyone can imagine. Appraiser’s have become slaves and its time to take back our fees and our industry.

    HVCC: ANDREW COUMO STARTED HVCC TO HELP HIS AMC THAT HE’S A BOARD MEMBER OF AND HIS BANK BUDDIES
    HVCC is DEAD. Theres many reasons it was put to rest in the new financial regs. For one, It rewarded the actual offenders like Wamu’s inhouse AMC – EAppraisit now CoreLogic. This AMC was caught pressuring Appraisers for higher values to make the deals go through. Whats the outcome, the imfamous HVCC developed by NY AG Coumo, which ended up rewarded the AMC’s with every client from all the Appraiser’s in the country and steals 1/2 the appraiser’s normal fee. Its like given the bank robbers the bank. Here you go, you got caught, so will blame it on someone else “on Broker Pressure” instead of what it really was “AMC PRESSURE” and then give you all the money in the bank, which was all the nations appraisers clients. This was totally illegal, because it didn’t go through proper procedures. This negatively effected the housing market, Appraisers lively hoods as well as other business in the industry. Now that HVCC is DEAD, Lenders who care about quality will order from in-house lists of Appraisers again. Lenders who do this will have less risk and more control. There will be a market for independent Appraisers again. I think Lenders and Brokers appreciate shorter turn times, less paper work, more control, less risk and no more will the AMC’s hide behind the Appraisers Fee. Its illegal to not show Appraisal fee is separate from the lenders administrative fee “AMC”. As of now the customer doesn’t know the AMC is getting 1/2 the Appraisers Fee for basically sending the appraiser the order thru email. Its very expensive to own an appraisal co. Data, E&O, License, taxes, Classes, health care, dental, gas, wear and tear on the vehicle, ink, etc.. and now after 10 to 15 years of appraisal fee of $350 we make $175-$225 for 6-8 hrs job that we pay all the expenses. No one can run a business at that pitiful amount. I’ve been appraiser for 18 years and been fighting to survive. There is no free market with HVCC or any thing similar to it. Fannie Mae is defunked and still comiing out with Bullcrap, like HVCC has been great. No one belives it.

  39. JOAN HUHN

    It is gross just reading half of these comments that come from a lot of misinformed
    big mouth people that have no idea what’s going on.. I would refuse to go 100 miles for $500 farless $200. That is silly. Maybe one in a million might for a favor but I have never heard of it.Quite the contrary, most companies limit the amount of miles you are allowed to travel. Of course we are all theives,get licences from a cereal box etc etc. What State are you licenced in or refering to?
    We need 2 yrs college in Pa, 2 yr Apprentiship, a very tough state test, after all of this most of the banks want 5 yrs experience to sign off alone. For all of this we make Minimun wage, get accused of ruining the economy. etc etc. FRAUD needs a reason.
    Do you know anyone that would want to commit fraud for $50 or less. That is also another Stupid comment. I am a licence Real Estate Broker and State Certified Appraiser. Did you know that you had to be a broker to be an appraiser before they started the certification?? As far as old but stupid, you think everyone that is a broker and an appraiser has ulterior motives? I don’t even talk to many Brokers – not allowed to other than making some appointments. I only use my Broker License for personal use. Do you have any idea how much additional knowledge you have, that is now needed by appraisers with all the
    rediculous questions we have put on us. Do you really know what a Legal Description is in Pa? I doubt it. I also ran a Title Insurance Company and almost all Management Companies want us to put the wrong information down.When I did settlements in the 80′s it was rediculous what the Agents would tell people at closings. They usually told me to explain it ,but if they attemped to, it was ludicrous. They should make it tougher to get a Real Estate Licence instead of 2 courses. I could not beleive how easy it was.

ADD YOUR COMMENT