I just spoke (via email) to a good friend of mine who has been an appraiser for the last 20 years. After the how are you’s? Crappy….. and the how is business?…… awful, the conversation turned to the new appraisal rules, the government and the mortgage industry as a whole. Since, I am short for time today (Pilates @ 6 tonight) and need to post a blog, I asked her if I could cut and paste her take on appraisals.

“The new appraisal rules are having a major negative effect. Short & sweet – obviously, more lenders are using appraisal management companies (AMCs). With the exception of very few, the AMC’s pay horribly…I mean anywhere from $185 – $225 for a full appraisal. FULL APPRAISAL! Most insulting is that for many, the only requirement is how little $$ you will agree to - no requirement for samples of work to be submitted; no letters of reference; no resume requested; all they want to know is where you’ll go and for how little. If you are the low bidder, submit a copy of your license and E&O and you’re on your way.

As a result, we’re having to do twice as many appraisals to make a little less than we used to make. And remember, appraisers were not making megga bucks in the first place even when the times were good. Twice the work for half the pay. The new American motto, isn’t it?

I believe the intention of the HVCC (Home Valuation. Code of Conduct) was a good one. I personally know appraisers who had future business threatened to hit values, or were removed from an “approved list” by a loan officer for an appraisal that did not hit expectations. I understand the premise, but as usual, the government solution swings the pendulum too far the other way. The only ones making out here are the AMCs. Charge the borrower/lender $325 for the appraisal…..pay the appraiser $185….pocket the $140 for? what? processing fees? come on! (By the way, I heard a rumor that Cuomo — thanks MR NY for spearheading this whole thing – is VERY cozy friends with the president of LSI – biggest AMC around – true? i don’t know). See the link at the bottom to a site called Appraisal Scoop. Its a good summary of appraisers’ feelings regarding the situation”.

Anyway, I have appraisal work and can pay the bills, some folks aren’t as lucky.

Hope all is well Dale! Hi to Anne.

So, I agree with my pal. What they did was create a random picking of appraisers to avoid collusion or manipulation. However, what they really do is eliminate the need to have a professional do the job to avoid the few bad apples. The people who have made a living and pride themselves with 20 years in the business are finding themselves really strapped after a hard day’s work. As many are forced to leave the business, they will be replaced by bank executive looking for work. Perhaps the answer here was to simply limit an appraiser’s annual kickback take to $500,000!

 

Off to do my Pilates 100’s and planks. Gotta work on those Jennifer Aniston arms!

 

 

Dale Siegel