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Appraisal Independence Violated ~ copyright AppraisersBlogs.com

A Journal Piece of Appraiser Independence (Part 2): Appraisal Independence Violated

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History is an important reminder to us all of what went wrong and what went right. When history is known we tend to skip the mistakes we made. We can either choose the right path for the wrong reason, the right path for the ‘right’ reasons and, we can take the wrong path in a similar manner. The MARKET needs to take the right path for the ‘right’ reasons.

In years of late 1998 and 1999 several ideas were brought forth to a Forum filled with Individual Appraisers carrying a dislike toward the status quo. One idea was the Appraisers Petition we are all familiar with and another one is the outline for creating the HVCC. The HVCC was not created immediately; it couldn’t be created until it was “appraised.” Many older Appraisers should check their reports for this “appraisal process.” The HVCC Ideal looked to have been more ‘able,’ but the problem surrounding it was the “Timing” as years went by. 8.5 years of heavy lifting (additional ideals and problem solving) took place from the start of discussing the Appraisers Petition to 6 months (+/-) before the collapse. Trust me none of this had anything to do with a “Fee.” It had to do with acting as an Appraiser Independently and a “safe market.”

The HVCC is probably one of the most – within context – Independent ‘works’ by any group of Real Estate Appraisers in the history of (more…)

Customary & Reasonable Appraisal Fee Petition - Image courtesy of patrisyu / FreeDigitalPhotos.net

Online Petition to Make a Difference in Customary and Reasonable Appraisal Fees

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Fellow Professional Appraiser,

I am asking you to take a moment from your busy day to PARTICIPATE in an important industry effort.

That issue is referred to within Title XIV of the Dodd-Frank legislation as “Customary and Reasonable Fees”:

CUSTOMARY AND REASONABLE FEE

In General – Lenders and their agents shall compensate fee appraisers at a rate that is customary and reasonable for appraisal services performed in the market area of the property being appraised. Evidence for such fees may be established by objective third-party information, such as government agency fee schedules, academic studies, and independent private sector surveys. Fee studies shall exclude assignments ordered by known appraisal management companies.

Subsequent to the original Dodd-Frank Act, the Federal Reserve enacted the “Interim Final Rule”. Among its provisions, this rule added the following guidance related to (more…)

Appraisers warned but no one listened - Image courtesy of Stuart Miles / FreeDigitalPhotos.net

Real Estate Appraisers Warned us About the Crisis but we Didn’t Listen

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On July 9, 2013 I participated in a radio interview with a lobbyist for the 100 largest financial firms.  The San Francisco radio program host asked me what question I would ask the lobbyist and I said that any discussion should begin with allowing him to state his view of what caused the crisis.  In the course of his explanation, he bemoaned the fact that there was no warning about the crisis.

I found this ironic because I had just published that morning an article about how the appraisal profession warned us that the senior officers controlling the mortgage lending firms were engaged in pervasive “accounting control fraud.”

That article discussed the ten logical implications about the developing fraud epidemic that any competent financial regulator could have explained to FBI agents and Assistant U.S. Attorneys (AUSAs) on the basis of the facts contained in these two sentences:

“From 2000 to 2007, [appraisers] ultimately delivered to Washington officials a petition; signed by 11,000 appraisers…it charged that lenders were pressuring appraisers to place artificially high prices on properties. According to the petition, lenders were ‘blacklisting honest appraisers’ and instead assigning business only to appraisers who would hit the desired price targets” (FCIC 2011: 18).

Note that the appraisers’ petition (more…)

Petition Appraiser Independence

Petition Concerning the Interim Final Rule on Appraiser Independence

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The National Association of Independent Housing Professionals (NAIHP) led by Marc Savitt is petitioning the Consumer Financial Protection Bureau and is asking those harmed by the Interim Final Rule on Appraiser Independence to sign and forward the online petition.

To Consumer Financial Protection Bureau (CFPB), Richard Cordreay, CFPB Director: Allow NMLS loan originators to order appraisals (more…)

Sign the Petition

Petition Opposing Coercive and Abusive Behavior of Chase Bank and Other Lenders Against Appraisers

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Please consider signing the online petition launched by John Dingeman opposing the coercive and abusive behavior of Chase Bank and other lenders against appraisers.

Stop Intimidating, Threatening, and Bullying Appraisers

Chase Mortgage Banking, like other financial institutions have come into possession of appraisals where a loan has been assigned or sold to them. If Chase had any issues with these appraisals during the underwriting process when the loans were written, they would have asked the appraiser’s “Client” for clarification, explanations, and/or corrections.

With every foreclosure, Chase is scrubbing each and every one of the appraisals in an attempt to place blame on a loan gone bad on someone else, instead of acknowledging their culpability in greed. Chase is sending out non-registered mail and alleging that USPAP (Uniform Standards of Professional Appraisal Practice) violations occurred and are asking the appraiser to reconcile the violations, explain their appraisal methodology, and discuss with them the value conclusion. If the appraiser does not comply, Chase is threatening the appraiser with placement on their Ineligible Appraiser List and a formal complaint to the respective appraisal board. (more…)

Sign the Petition

Appraisers online petition opposing use of AMC fees as Customary & Reasonable

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Please consider signing the online petition launched by appraisers and written by George Hatch, opposing the use of AMC fees as Customary & Reasonable:

Federal Reserve Board to Clarify Customary and Reasonable Appraisal Fees

On October 18, 2010, the Federal Reserve Board announced an interim final rule to Regulation Z of Title 12, also known as the Truth in Lending Act (TILA). One of the elements to Regulation Z is a binding requirement upon creditors and appraisal management companies to ensure that appraisers who are not employees of creditors or of the appraisal management companies receive customary and reasonable payments for their services.

In preparing this interim final rule, the Federal Reserve Board did not specifically identify which appraisal fee schedules, surveys or studies that would be appropriate to designate as a ‘‘safe harbor’’ for creditors and their agents to comply with the reasonable and customary fee requirements of TILA. (more…)

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