This new government regulation completely takes the ordering of your home appraisal out of the hands of your loan officer, mortgage broker or shady Wall Street investor. Spearheaded by New York State’s Andrew Cuomo, it created a “round robin” system of blindly choosing the appraiser to figure out the current market value of a home for mortgage purposes.

 

The old process was to have the loan officer choose the appraiser, discuss the value needed, oversee and control the work and then send it to the lender.  Apparently, this was a problem.

 

Now, it is hands off, and the lender orders it on everybody’s behalf. The key was to isolate the appraisal/appraiser from the loan staff working on the loan, anyone commissioned or compensated on the loan and anyone who works on the loan process.  This was created to remove fraud, collusion and graft.

 

Now, the appraisal is ordered directly through the web site of the lender of record, the borrower needs pay for the appraisal upfront by credit card and nobody gets to see the appraisal or speak to the appraiser. If there are errors or issues, your loan officer cannot act on your behalf.  If the lender rejects the appraisal, your loan is rejected from that lender. If there is a dispute, it must go through the system and ranks to get a response, so forget that! If you need to or want to go to another lender, the appraisal will not be transferred or assigned, so the borrower will have to pay for a new appraisal that might not be accepted either.

 

This blind appraisal system seems to be taking too much time, costing the borrower more money and further will not allow the loan officer to do their job. Now when I tell clients, I am going to send your loan to multiple lenders and shop for the best deal; I can move your loan from one lender to another very easily, what I am really saying is that you will have to spend more money for me to do this. Every time a mortgage broker moves your loan to another lender a new appraisal must be obtained. As a loan officer, I feel this is impairing my ability to do the best job for my client.  We are hoping this regulation is going to be softened to allow the appraisal to be assigned to different lenders. The Industry population understands the reason for blind ordering, but what is the reason for not assigning the appraisal and making the borrower spend more money?

 

Does Andrew Cuomo know that Wells Fargo and Bank of America own the companies that all appraisals must be ordered from? Does the Federal government know that these banks offer only one choice-theirs- to obtain the appraisal from, will not assign them or accept an appraisal from another company? Well gee, that doesn’t seem too kosher, does it Mr Cuomo?

 

Dale Siegel