Clear Capital’s Push For Hybrid VA Appraisals
Clear Capital suggests that the VA consider the use of a desktop appraisal
On April 4, 2017, the House Committee on Veterans Affairs held a hearing on “Assessing VA Approved Appraisers And How To Improve The Program For The 21st Century.” The hearing was designed to “assess VA’s current appraisal process, as well as specific difficulties for timely appraisals in highly rural areas”, as well as to investigate possible technological solutions to mitigate timeliness issues.
Much of the hearing focused on two areas: The requirements for becoming a member of the VA appraiser panel, and the baseline requirements for comparable sales data in VA appraisal reports. Most witnesses were supportive of the current VA panel structure, going so far as to call it the “gold standard” in the appraisal community. One witness, Russell Johnson of Clear Capital, suggested that desktop appraisals could streamline the work flow for VA appraisers, though others were skeptical of the ability to use this approach in rural and remote areas where data is scarce.
At the end, Subcommittee Chairman Jodey Arrington (R-TX) asked the witness panel to come back within a month with recommendations regarding ways to improve appraiser availability and willingness to perform VA appraisal assignments. The full witness panel included:
- Mr. Jeffrey London Director Loan Guaranty Service Veterans Benefits Administration U.S. Department of Veterans Affairs (Accompanied by: Mr. Gerald Kifer Supervisory Appraiser Loan Guaranty Service Veterans Benefits Administration U.S. Department of Veterans Affairs)
- Ms. Michelle Bradley 2016 Real Property Valuation Committee Chair National Association of Realtors
- Mr. Stephen S. Wagner, MAI, SRA, AI-GRS Vice President Appraisal Institute
- Mr. Russell Johnson Chief Revenue Officer Clear Capital
Michelle Bradley (NAR) Witness Statement Excerpt
… why are many markets facing situations that suggest a much greater shortage of appraisers? To gain a richer understanding of these matters, NAR conducted a survey of REALTOR® appraisers in early 2017.
NAR found that appraisers are generally dissatisfied with most elements of their job. Over 50 percent felt dissatisfied with their level of compensation andoverburdened by the level of regulation in the appraisal industry. Those appraisers intending to leave the profession in the next five years cited excessive regulation and insufficient compensation as the two main reasons for their departure…[read more]
Stephen S. Wagner (AI) Witness Statement Excerpt
Generally speaking, the VA fee schedules are much more indicative of customary and reasonable than what is found in the private sector today. This largely is because the schedule is developed by surveying local market participants. As such, the schedule has become an important measure for customary and reasonable fees in the marketplace. In recent years, several states have recognized the VA Fee Schedule in assessing customary and reasonable fees…[read more]
Russell Johnson (Clear Capital) Witness Statement Excerpt
With the advent of new products, services and analytics, Clear Capital suggests that the VA consider the use of a desktop appraisal, based on the physical inspection of a subject property by an industry professional, where appropriate as an option by the Department of Veterans Affairs. The product is a hybrid of traditional appraisal process and methods and leverages a qualified, arms-length, real estate professional, such as a real estate broker or agent, performing a visual inspection of the subject property and providing other market insight and analytics.
The inspection and other market data are provided to a geographically-competent, licensed appraiser for analysis, along with supporting data such as real-time MLS information, public records, and local market data and analytics. The appraiser analyzes all the information and data and concludes the final value of the property…
The desktop appraisal process allows a single appraiser to complete several more appraisals per day than is possible with the traditional approach. In some parts of the country, an appraiser spends 30% of his or her time driving to and from a property. This is not a productive use of time for these skilled and knowledgeable professionals.
Neither should an appraiser necessarily need to spend valuable time taking room measurements. Rather, wherever possible the appraiser should be applying their expertise and knowledge by performing the analysis of data and information about a property, in order to arrive at a solid property valuation. He or she should not need to be an Uber-driver, or handle a tape measure, or be a photographer, for hours on end for every valuation assignment. This only drives up the cost of an appraisal – to the veteran, remember — and slows the decision-making process… [read more]
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Would expect nothing less from this company
So let me get this straight, Clear Capital, the world’s worst amc alive, a low echelon amc that encourage broadcasting in search of the cheapest and fastest appraisers, fishing for low cost appraisals rather than quality appraisals, wants VA to use desktop appraisals? SMH
” He or she should not need to be an Uber-driver, or handle a tape measure, or be a photographer, for hours on end for every valuation assignment.”
Well if the clients would modify their 26 page engagement letters, maybe some of the time consuming b.s. required would go away. Thus, leaving more time for analysis and overall more assignments. I understand the scope of work on most appraisals requires an appraiser to photo the comparable even though in most rural areas in my area, its a long drive-way, hidden by trees, private area and thus I am taking a photo (usually at 25mph) of trees or a mailbox. I might take heat for that but seriously how many people get out of their cars for a perfect photo of a driveway? You can tell on aerial photos if you can see the home from the road but the client requires a pic of the driveway or trees, or mailbox. What a colossal waste of time especially when you are driving dozen miles in every direction to get said comp pics. Now what this fool is quoting above, measuring a property and amenities is not a time sink nor is photographing the subject. Driving to the comps in rural areas……..thats different, thats a time sink but I understand its in the SoW.
In the interest of saving time and money, our amc contacts no less than 50 appraisers per individual order request.
https://www.clearcapital.com/about-us/leadership/
If appraisers ever wonder where their income went, look no further than the amc’s executive staff. All that lakeside living, hiking, philanthropic and charity, kids in ivy league colleges, biking, guitar playing, sailing in boats, ultimate golf, free time activities they boast about…. Sounds expensive. Am I reading this right that there is a 1 to 7 ratio for licensed appraisers managing that company? One in seven is an appraiser, the rest are dead weight. Valuation development is not java based, and has nothing to do with hiking. Game over, thank you for playing.
Its not much better for the urban appraiser. To fight their way downtown, park and pay in multiple locations only to take a picture of a 30 story building from two blocks away where you really have no idea where the subject is (courtyard location)? Time is time, rural versus urban.
Bill, you are right re time is money, but you aren’t suggesting we NOT inspect that 30 story building are you? How else would you know whether it has good or bad access for users? Onsite parking; validated parking? Morning (or afternoon) sun exposure issues? Special features such as courtyard services, concierge etc.. Aircraft issues? Deferred maintenance (overall)? Very dirty windows is indicative of maintenance cut backs. You wont see those from two blocks away.
I’ve bypassed buildings driving before only to walk back and find they had rear access free or validated parking on more than one occasion; and yes, I’ve had to walk nearly a 1/2 block away and across the street in order to get a decent photo that was representative of the building (subject OR comparable).
Heck, I perfected the (old) 35 mph 35 mm photo out the window on Doheny Drive border of L.A. and Beverly Hills (can’t do THAT with digital camera delays today) driving by up to six times (that takes about 30-45 minutes in traffic) to get a better understanding until I finally just bit the bullet and found parking a mile away and walked back. I got distant and close up (on site) perspectives and yes, it DID shoot down my whole morning on that one comparable.
In a large condo project where I often found at least one comparable for other assignments.
Anyway-all posters are right in some way or another. We CAN develop ‘opinions’ of some kind of value from a desk analysis only. Like a ‘comp’ check. But whatever THAT value opinion is it will not be market value; nor will it necessarily credibly supported. Once we all stop going into the field, do we stop talking to agents next too? I mean think of how much time is wasted trying to pin agents down to answer questions! External obsolescence? Nah, it’s outside the property!
I’ve read your posts enough to know you’d never suggest anything less than proper work so I assume your focus was the time spent aspect without necessarily encouraging elimination of good field work. As always, enjoy your posts.
Wasn’t this the meeting with the VA that appraisers could not speak at? How does an AMC get to address the VA and appraisers cannot?
Bill, Appraisers DID have a voice at this meeting. I was one of the speakers, invited by NAR. I have been a VA appraiser for 20 years, and in the appraisal profession for 31 years. The NAR has many real estate specialties as members, including appraisers, property managers, commercial practitioners, etc. NAR’s Real Property Valuation Committee is made up of appraisers nationwide. NAR turned to their appraiser members to provide commentary in this meeting, and it was us stating that the VA is the “Gold Standard” and should not be modified. I am on a campaign to remind everyone that REALTOR is NOT synonymous with real estate agent. “REALTOR” is any individual who is practices in any aspect of the real estate profession and is a member of the National Association of REALTORS.
Get rid of the AMC and Clear Capital especially and watch the dramatic changes happen. Cost are higher because their is a middle man. Turn times are extended for the very same reason. AMC’s are the cause of all the issues we are having. Appraisers have left the field because of AMC’s as well as are now working for AMC’s. Rural area appraisals are extended in time due to underwriters for AMC’s not having any knowledge of the area. Appraisers spend half their time explaining market conditions to someone in another state. The expense as well is directly the fees tacked on by the AMC. AS well as all the other inspections required by lenders now. I am so sick of the appraiser blame and the ignorance of the people thinking they know the problem. The problem is the AMC. Always has been and always will be.
I heard this story before. A hearing about appraising without an appraiser as a witness, I know, Let’s get Joan Trice to represent us…… Yeah right.
Please read the full article (reminding or clients to read the full report) Michelle Bradley is 100% Appraiser. Most Appraisers are Realtors via our membership in NAR we have the cream of the crop Appraisers representing 100% Appraisers. Please read all the way through.
hmm….well the CC article is just another example of a “NON-APPRAISAL ENTITY” claiming they know better than appraisal groups on how to prepare an appraisal. Wow…..pretty amazing that, ClearCapital was even give time to present their opinion on how to do an appraisal. What the hell, do they know other, than to seek out appraisers who work for the cheapest appraisal fee and fastest turn time.
One time when I grew tired of cc’s broadcast solicitations, I emailed them and demanded more or to be removed. They generously increased the automatic stated figure from $225 to $234. I **** you not, that was their idea of increased appraiser compensation, and I’ve got the printed emails to prove it. They took the MattMartin contract and almost sent them under by willfully violating HUD MM rules regarding compensation chain. Luckily MattMartin came to their senses and dropped them. The kings of broadcast distribution, the chief offenders to free market principals; It’s clearly monopoly capitol! Now hiring appraisers whom are the least likely to understand the concept of price vs value!
Baggs-Lenders contract appraisal fees far in advance with AMCs;. Agreed fees are in a range of $550 to $600 (a few bottom feeders are even lower). The AMC is expected to cover their costs AND all appraiser costs out of that fee. The lender that signs the AMC service contract tells their correspondent lenders and loan “officers” what appraisal fee to quote for the TRID. Once quoted many lenders like that Virginia FCU (Truliant?) claim they cant change the TRID for appraisal complexity once the appraisal fee has been quoted (well in advance of any specific appraiser being contacted). The appraiser MUST work within the fee contract negotiated by others.
How is this not a violation of the Sherman Anti Trust Act?
Mike, it’s important that appraisers know the specific details of ‘anti trust’ and ‘sherman act’.
FTC – The Antitrust Laws
The Sherman Act outlaws “every contract, combination, or conspiracy in restraint of trade,” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.” Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable. For instance, in some sense, an agreement between two individuals to form a partnership restrains trade, but may not do so unreasonably, and thus may be lawful under the antitrust laws. On the other hand, certain acts are considered so harmful to competition that they are almost always illegal. These include plain arrangements among competing individuals or businesses to fix prices, divide markets, or rig bids. These acts are “per se” violations of the Sherman Act; in other words, no defense or justification is allowed.
Baggs, I think a person has to read a lot more than a few excerpts. Bottom line is evidence required to sustain a charge of restraint of trade or interference with interstate commerce and I think AMC/Banks actions now qualify as doing that. Whether it (an action) arises from related subsequent legislation or the original Act itself, I leave up to attorneys to decide.
What I DO know is that the current practice of 1. Loan interviewer gives appraisal fee quote; that quote is presumed locked in under lender self serving and not wholly accurate interpretations of TRID and common business practices. 2. Broad Lender to AMC contracts are signed (price range fixed) well in advance of specific orders with no regard to complexity or customary and reasonable fee. 3. Shopping only for lowest fee-quickest turn time within that preset range amounts to restraint of trade. Interstate commerce IS adversely affected. Fair trade is negatively affected. Even the 1970’s burden of ‘plausible’ vs old possible can be met (imho).
Good reminder to all of us though. As always. Thanks.
Mike, this line of consideration regarding anti trust violations is surely a topic worthy of stand alone article presentation. Dave provided me an interesting court case link which showed how this one amc was deemed compliant because they had a static fee rake, like 325 appraiser, 50 amc split or something. I was quite disappointed with that though, because as a practicing appraiser I know those figures are just from the majority pool of assignments which the amc was able to divvy out through mass standard process, and was likely not the individual one offs, quote fee orders, or tough to place orders. Amc regulation missed the mark when it failed to define a standard business model for fee sharing. Now if the one amc in question (see Towne for link) was deemed to pass the sherman argument via standardized raking, would that not also allude that all amc’s whom do not utilize standardized sharing would be in violation? Act amc bragged to me they contact no less than 10, and even 50 if possible, unique appraisers to get fee quotes for each individual order. Some lenders even engage multiple amc’s at once and the one whom presents most appealing terms to the lender and customers gets the order. Almost all amc’s boast in their solicitations they keep costs and turn times low as a primary function. This is restraint of trade, but there is inadequate means for appraisers to pursue class action against amc’s. It’s the David vs Goliath argument on a smaller scale. It remains factual that ‘C&R’ was traditionally defined per the highest average standard quotes from appraisers presented fee schedules as a group. Somewhere along the way presented fee schedules and highest average fees which worked well for the peer standard at large were disregarded. There can be no C&R without uniform engagement, and amc’s routinely add to FNMA requirements, often doubling such working expectations. Amc’s have turned this industry into a free for all, and so it shall remain as long as individuals working there have no accountability through company licensing processes. A company is not a person, licensing a company is pointless.
So, what Russell Johnson is saying is that if appraisers do not follow the standards mandated under FIRREA and USPAP, that we can do more work?
It takes a Congressional hearing to determine this? I see that once again only the AI is represented as far as appraisers go. The ONE GROUP that already is on record in many states for promoting alternative standards. They are not unbiased or honest arbiters on this issue.
When only one company is increasingly in control of ALL data that would be used for such desk top analyses, (CoreLogic) is that really wise? I mean even if it produced credible work.
More than 35%; perhaps as much as 60% of all real estate is simply not suited for desk top appraisal which is basically a drive by equivalent. Perhaps its worse than that. Any inspection would be by untrained parties such as agents that are already infamous for including non permitted, non living area in sizes reported in mls.
What could possibly go wrong?
I take serious exception to claims by non appraisers that driving time is wasted; or that room measuring is non productive (who does that anymore anyway?). it’s driving time that makes one aware of neighborhood characteristics; traffic, commuting times etc.. It’s that close inspection measuring outside that identifies many property problem areas. It is walking around a room (rather than peeking inside) that identifies interior problem areas such as soft flooring or uneven (non level) subflooring; or defective quick release handles for iron barred windows; or missing smoke or Co2 detectors; strapped heaters or heaters and furnaces that are no longer functioning. How about that roof that looks ok in the front but the rear is all curled and weathered from more direct sunlight?
Look, the real problem is that MAIs that cannot make a living doing traditional MAI C&I work now want to play in the residential arena. THEY are too important and educated to be bothered with all that pesky detail work that comprises real residential appraisal. They talk (and ostensibly teach) a good game but the actual mechanics of proper residential real estate appraisal is beneath them.
If anyone believes for a minute that locally competent desk appraisers will be analyzing the data and preparing the written reports I have some famous New York bridges or Florida swampland for sale.
The alternative rules are purely for the benefit of the large intra state megalith AMCs and their AI “Chief Appraisers” consultants; or owners. These are the same folks that have been so rigorous in assuring geographic competency and C&R fees already!
IF there is a need to speed up the process of veterans making the most important financial purchase of their lives, then start ordering the appraisals when the offer to purchase is accepted-instead of wafting for loan approval five days before desired funding!
well clearly the AI has been ineffective or nonexistent in dealing with the issue of the AMC business model and how it has degraded the appraisal profession. However, IMO, the failure or blame needs to be more broadly based to the entire appraisal profession and the lack of many appraisal groups who have failed to collaborate their efforts in an effective and united front. The appraisal profession has and has had a overall leadership meltdown. Its been a serious professional wide failure that probably has the lenders and lender interest groups all laughing all the way to the bank. I don’t have a solution, other than until the appraisal profession can find effective leadership to present a united front, what we all are seeing will continue.
Raymond, contrary to popular belief I take no pleasure in bashing the AI but their actions are far more egregious than merely being unsupportive on (most) appraisers issues.
They have been leading the charge on behalf of the AMCs alternative standards push! AB624 in California a couple years ago (buried and dead) resurrected again (right now) as SB 70 to try yet again to get my state to adopt alternative standards that permit less than USPAP compliance. They want the ASC eliminated as well as TAF (AI lobbyist Garber written testimony before Congress).
They keep telling our legislators and the public at hearings that only a very tiny percentage of appraisers will benefit or be affected in any way. If that were true then why is that tiny percentage deserving of its own legislation while the rest of us cant even get C&R fee legislation?
ASA is concerned that AI is seeking to intrude into the business valuation profession. AGA is concerned that they are actively promoting policies on a national basis that will make residential appraisers serfs to MAIs and MAI guided AMCs.
I heard feedback from the TAF meeting in Chicago that the AI lobbyist there reportedly said they will pull the California legislation due to who the ASA hired to oppose it. I’ll believe THAT when it happens.
Raymond right now the ASA (Los Angeles and Orange County Chapters); AGA, and VaCap regularly work with others when issues permit. CaCAP also cooperates. The other two to three dozen coalitions and professional peer organizations are pursuing their own objectives. ALL have been invited to participate though admittedly the invitations may not have reached the right decision makers n some instances.
You are 100% right though about the need to come together in common interest areas.
But appraiser organizing, like cat herding isn’t always effective. Have YOU joined the AGA yet?
Hi Mike, to answer your question…no i have NOT join AGA. After 39 years, I’m in the process of phasing out of the appraisal business. The first 20 years was doing 99% lender appraisal work, which included being a chief appraiser for 2 financial institutions. 20 years ago i decided to phase out of the lending appraisal arena by obtaining a MAI designation. For the past 19 years, got me, lender appraisal is mostly nonexistent, other than to be a observer of what has been happening the past 20 years couple with doing few lender appraisals. One of the reasons, why AI have been ineffective in addressing appraisal issues in the lending appraisal arena, is that a majority of AI members, like myself, don’t rely on lender appraisal clients. Plus, during the past 20 year, most lenders do not recognize AI designations. Thus, AI, has been unable to fully grasp the appraisal issues to gain support from appraisers. We all have seen the “alphabet” of appraisal groups and designations that pop up in attempt fill the leadership void. The appraisal profession has never been a unified and strong professional group, since I started 39 years ago. However, the last 10-15 years, the appraisal profession has pretty much been pushed aside by lenders and lender interest groups. The lenders ++, control pretty much the entire appraisal process, from the fees, turn time, comp selection, etc, etc. We have seen some recent appraiser victories in some states. However, the question, IMO, is how, when or how long will it take for the appraisal profession to regain control of the appraisal process from non-appraisal entities?????
Outstanding response Raymond and thank you for taking time to so accurately identify the issues we face. Agree with everything you said. If the SRA Members of the AI would ask the same question, we might actually get somewhere.
Right now ASA is taking a leadership role among the not for profit educational peer organizations. Where and when possible AGA supports them or in turn seeks their support issue by issue.
Interestingly it appears that the rest of the groups (including ASA and AGA) are spending an inordinate amount of time opposing AI pushes for special carve outs. A year and a half ago it was opposition to California AB624 which we managed to bury in appropriations after it was passed. Now it has resurrected itself as SB 70 with the urging of AI’s California lobbyists. Strangely this became a topic of discussion in Chicago’s TAF meeting last week.
They’ve tried to get similar alternative-standards legislation passed in Tennessee, Texas and Illinois-and possibly in others I’m not aware of.
I don’t speak for ASA but I gather their objection is that they see AI trying to change R.E. Appraiser rules and standards to allow property appraisers to more directly compete in the BV arena; quite possible the AI sees itself teaching these classes in the future in direct competition with ASA or NACVA. They are the acknowledged leaders in the field for these courses currently.
I’ve certainly heard Members speak about wanting to do appraisals of bulk securities, or at least do desk evaluations on properties included in them-but those pesky USPAP requirements keep getting in the way of the $70 “added value” products they want to be able to offer.
Raymond, Sadly the only ones best positioned to take the leadership role you wrote about are the very ones working as quietly as possible behind the scenes to promote legislation that is beneficial to only themselves and to the detriment of the rest of the appraisal profession in general, and the residential transaction lending appraisers in particular.
The alphabet soup jockeying for recognition would never have been possible if the former premier organization in the profession had not abdicated its traditional role when HVCC first came out.
AI’s lobbyist in DC (Mr. Garber) gave written testimony to a partisan Senate Subcommittee back in November (date?) calling for the elimination of the ASC and TAF as that Committee is setting up to recommend repeal of Dodd-Frank.
They continue to attempt to influence favorable legislation for the AI (exclusively) while claiming to ‘represent the interests of all appraisers in America. That’s the reason the AI designations no longer carry the weight they once did with lenders.
Despite these things, AI is the single organization that is still best positioned to take a leadership position once again – if only they were selling something anyone wanted.
It’s not unlike the backlash we’ve seen by center-left moderates/centrists and middle right voters. NONE want the status quo – good ol’ boys brand of politics anymore – on ether side.
I hope you will share more of your views and experience here Raymond. You have seen a LOT and can offer corrective solutions I think.
Mike, what you are describing with the AI, AGA, ASA, VaCap, NAA and others just confirms, what I stated is the root of the issue with the appraisal profession. LACK of Leadership. Each and every profession group have their agendas ans specialists. The motivation of all these groups should for all them to realize that the lenders; lender interest group and regulators will continue to “manipulate” the appraisal profession until the appraisal groups unify in the positions on lending appraisal standards. Someone needs to take this appraisal leaders behind the barn and given all them a real good licking. None of them see the reality of the degradation of lending appraisal practices by non-appraisal entities. It pretty amazing and the appraisal for lending purposes is the closest thing to professional slavery.
Joe Thompson
Great response there Mr Ford, excellent as usual. Per Bill Hattaway’s comments; OMG! Is that true? Conflict of interest. “Everyone is running the appraisal industry except practicing appraisers.”
A simple way to improve VA efficiency would be to implement an assignment tool to place appraisers orders closer to home, and in closer proximity to each other. Because the VA does not allow an appraiser to accept or reject orders, and also only provides one single lender person access to the VA portal, these assignment woes are non negotiable challenges and important reasons why the VA cannot get timely service. They need a dedicated liaison person for each individual order, to stand between the lender and the appraiser.
It would be great for amc’s nationally though, if they could remove the only available unbiased fee survey point of reference available. Moving all VA origination work to desktops would certainly accomplish that. Not coincidentally, 99% of all amc’s in this country do not pay compensation even remotely close to the VA panels standard fees. Amc’s are simply stewards of the order request, nothing less, nothing more.
“Today is the end of the republic (the independent free market). The end of a regime that acquiesces to disorder (the independent appraiser). At this very moment, in a system far from here, the new republic (the appraisers blogs) lies to the galaxy while secretly supporting the treachery of the loathsome resistance (supporting C&R fees). This fierce machine which you have built upon which we stand (the amc model), will bring an end to the senate, to their cherished fleet (an end to independent appraisers). All remaining systems (independent appraiser groups) will bow to the first order (the amc’s) and will remember this as the last day of the republic! (the last day of fair fees for origination.)” That fits nicely. Coincidence?
Let the AMCs fill these miserable liability filled orders themselves and see how long it takes for them to go bankrupt.
As a VA appraiser for 35 years I have say, “Keep the AMC’s out of VA”. They are not directly involved today nor should they ever be the monkey in middle.
AMC’s are good for……..proofing reading…….making sure all boxes are checked……..thus making reports look better to the lender. End of a very short story.
Every VA appraisal states “No AMC”. Why, why, why was the sludge bottom feeder Clear Capital involved?
A VA appraiser is there to protect the Veteran. No hoodwinking of the Veteran by shiny suited sales people wanting to close every deal. Not on my watch. Sure, the Veteran maybe upset when the deal goes sour but the VA has a very unique feature…..The Tidewater Initiative. When the appraiser can’t support the sales price by use of reasonable comparable home sales then the lender is notified who in turns ask the listing and selling agents to supply comparable home sales data. I estimate that I have had 10% of my assignments turn into a TI and very seldom, if ever, does an agent supply even one “comparable” home sales to support the sales price. A TI allows the Veteran to renegotiate the sales price with the seller, come up with more money to make up the financed difference or move on to the next home.
As a VA appraiser, this is laughable that Clear Capital wants to use a hybrid form that will allow real estate brokers to complete. Is it any wonder that they cannot place orders when they pay $250 fees, w/6 comps and a 25 page engagement letter?
My state allows 10 business days on VA orders which I always meet, however, I have heard that in some rural states it’s taking 30+ days. My only concern is if those Veterans are losing homes due to such long turn times, that the VA/Govt does not turn to some type of AVM, pushed down their throats by Clear Capital, since the role of the VA appraiser is to protect the the Govt, who’s backing the loan 100% and AVM’s in rural states are about as useful wings on a Great White! I hope the VA keeps out these AMC’s since VA is a pleasure to work with! I’ve never enjoyed any AMC, which to me they are ABUSE BY 1,000 Cuts, it just depends how much and long you can take it!
OLD and GREY
Yep…that would describe me. I was on the FHA panel in 1985, also was an FHA review appraiser at one point. Now I refuse to accept any FHA assignment because I will not crawl thru an attic or under any home. I am not a property inspector. The fact that many of my fellow appraisers are willing to do this crap allows FHA to dictate those requirements to the occupation. If appraisers refuse to do these things FHA will change their guidelines.
I also refuse to work for any Appraisal Management Company. I am not concerned as to the fee or turn time…just the fact that it is a parasite sucking money from my efforts causes me to refuse. If appraisers refuse to work with AMCs, they will go out of business. That will stop the AMC problem very fast!
Appraisers somehow think that they have allies by paying dues to various organizations or coaches/instructors. What a waste of money! So you have earned an XEQ designation from an organization that no one has ever heard of! WOW…Who on this earth cares? Why are you paying your hard earned money to attend an Expo or a seminar by a coach? Invest that money for retirement or take a cruise!
Yes, I use Marshall & Swift for my residential and commercial cost information. These resources have been purchased by Core Logic so I will have to find alternate cost information as I will not contribute to the demise of our occupation.
As appraisers we do have some powerful input into this process. However we have some of the most pitiful people on this planet working in this occupation. There are less than 75,000 of us and about one half do residential appraisals. What would happen if we were to actually come together? AMCs would be history (unless they can do appraisals everywhere without a licence/certification) which they cannot do! We need to come together as a group…..not the Appraisal Institute or the other silly groups that have worked against us! No Expos, No coaches, no bullshit! At the rate we are losing appraisers we can meet in my back yard to discuss this! LOL
Working patterns with AMCs is often alarming. Both the high turnover of regular staff, and the top heavy non appraiser administration people are topics of concern. The regular staff is often only compensated regular wages, but they have to deal with the appraisers on phone and through order management. I’ve spoken to many AMC employees whom absolutely hate their job and were actively looking for other companies. How could an ethical person appreciate a position where their job was to take advantage of other people, despite all objections? Various employment based ratings sites out there are insightful into how AMCs treat employees. Simple heartfelt conversations with employees can bring incredible insight into the AMC companies operational structures and approach to ethics. Ask the various process, assignment methods, and billing approach qualification questions every time. Other employees are consigned to the process, but typically the ones whom stay have the least ethic and most aggressive attitudes. I’m constantly ethics checking AMC reps and the assignment persons ultimately are just salesman with no genuine ethic or responsibility towards the development process. They may start with ethic, but if they stay, the hard truths of the AMC business model needing to take advantage of appraisers, and providing none to minimal value added service either drives them away or destroys the friendly attitude and ethics they began with.
AMC company licensing is irrelevant, and all individual AMC employees should have individual licensing. Because there is no personal responsibility with AMC assignment persons, anything goes. Then we’re on to management, the typically well educated experienced people with high aspirations. They must have read in some men’s magazine how easy a startup AMC business was. Or perhaps the majority of AMC executives are the people whom could not readily compete in their chosen lines of work in the first place. So they create value out of nothing in an unsustainable ponzi scheme business model. It’s one thing to develop effective technical systems and web platforms, and most AMCs either outsource or effectively develop that. That’s what they sell to lenders. It’s quite another to apply this office cubicle stats tracking matrix to the independent valuation professionals whom abide by a mountain of legislation and regulation, piecemeal state by state. And that’s where it all falls apart and the AMC is appropriately recognized as being an unnecessary private partnership bureaucratic overlay which drives away more actually licensed professionals than it attracts.
Furthermore, I would like to thank Clear Capital for those several years of broadcast orders, which I never accepted. A special thank you for refusing to treat me with respect and dignity, but finally allowing me to remove myself from the panel after many attempts. Hugs and kisses for the hang ups, unreturned phone calls, unprofessional engagement patterns, and constant point of contact customer service representative turnover. Kudos on the advanced stats tracking system, too bad you forgot to track default rates over long term, or you might have had something.
But believe it or not, Clear Capital made my business a success, so for this I am not sarcastic and do sincerely thank them. When they lost the Matt Martin contract, I moved in and picked up hundreds of simple REOo orders, direct assignment, consistent terms, singular reliable point of contact person, all full fee. I ran that all the way until their HUD contract expired. An entire AMC company with 7 college educated executives failed to provide what me, the regular simple licensed appraiser provided with stars and high marks. Because the business presentation of the AMC is typically false in it’s promotion of value added services, the let down for lenders is substantial and this creates a heightened sense of value in reliable appraisers whom truly understand the point of the appraisal is valuation surety and not statistically based performance analysis. I certainly did step in and save the day, thanks again if any Matt Martin persons are reading this (now Chronos).
This development was so significant for me, I changed my marketing plan to go ahead and solicit lenders whom use AMCs, and make sure I was in contact with the same heads of company the AMCs likely solicited to. I told them when they’re done using AMCs, I’ll be available. Now I have more direct assignment clients than I can handle, and the fair compensation without interjection by any middle management persons continue to rise. I’ll still do AMC work though now and then, but I typically charge at least an additional $100+ for the time consuming chore of working with unlicensed individuals and additional bureaucratic overlay.
SCOPE CREEEPS!!! Appraisers have been dealing with nearly weekly additional demands of our time and resources since HVCC and Dodd Frank started this quest 10+ years ago. It has to STOP!!
All we need is a SIMPLIFIED process and for all parties involved to be held ACCOUNTABLE for the data and their positions. We don’t need Barney Frank – we need Barney Fife. There were plenty of rules in place in 2007 but nobody was ENFORCING them. Now we have a thousand more rules and still nobody is enforcing them.
We don’t have an Appraiser shortage.. we HAVE and Appraiser TIME shortage.. Remove and stop requiring redundant data and WASTING OF TIME!! For any new regulation – you have to delete 2!! or more…
A few things that can save hours every day
1. Stop requiring detailed and turn by turn directions to comps on every report in the day of GPS – waste of time and is rarely needed.
2. Demand Geographic competency and flexibility – stop requiring that I cover the ENTIRE county when I am very capable of some areas but some are very much a burden due to distance and other market/data resources.
3. Allow MLS photos of comparables – the photo should be correct and representative – AND YOU SHOULD ALREADY KNOW YOUR MARKET. If you don’t, you are held accountable for your mistakes but we get 90% of our data from MLS and are NOT allowed to use the front photo?? Stupid waste of time and REALTORS should be tasked at making sure the data is correct also.
4. Make sure your lenders PAY. I spend too much time tracking down unpaid invoices.
5. Stop the unnecessary “corrections and stipulations” – we are not here to train “reviewers”. Allow reviewers to overlook typos and obvious minor errors if they have NOTHING to do with valuation. Some things need correction or explaining- most things don’t.
6. ALLOW for upgrades for complex properties. Forcing me to do a complex property for a standard fee steals my resources and TIME and hurts the veteran who does not require this extra use of my time. I’ve had to take myself out of rotation for a week just to concentrate on 1 appraisal a number of times. This costs me thousands of dollars.
2 words – SIMPLIFY and hold ACCOUNTABLE!!
PS When an AMC is invited to this type of Congressional hearing and send their Chief REVENUE Officer – that should give you a few hints as to their intentions… Do NOT allow the AMC’s and/or Corelogic to become the Big Brother of Real Estate. Clear Capital is famous for taking advantage of appraisers while adding NO CREDIBILITY to this process – just added fees to the borrower.
The absolute worst AMC out there. Terrible fees and having them comment on any Regulation would be like El Chapó commenting on drug policy.
Perfect analogy
Clear Capital keeps pushing the idea of an appraiser shortage, that has been proven to be nonsense. the only shortage is of appraiser’s willing to do their assignments for their crappy fees!
After the crash in 2009 all of the GSE’s and HUD documented their appraisal fraud rates. as did the VA. The VA had a 0% appraisal fraud rate because the VA’s appraisers know who they are working for and are insulated from the likes of Clear Capital and their ilk.
Interesting note; A CC employee stated in their company review, this company had not hired a single veteran that they know of, and preferred to hire only younger people with less experience. You can’t make this stuff up.
Run this search on google: employment review; clear capital amc
Here are a few actual excerpts of supposed employee reviews. I’d doubt the legitimacy of all the glowing reviews, except to presume their the tech geniuses who have a mainline into appraisers pockets.
I was excited when <>. I learned basic appraisal practices yet it was rather alarming that we allowed brokers and appraisers to value homes from their desktop’s which usually were located in a completely different state. Hardest part of the day was quality vs quantity as big AMC’s make there revenues through volume. <>
CC is a lifestyle gig, not a career opportunity. It will pay enough to cover basic bills, but not flourish. The sweatshop culture is oppressing, despite some really good people. The problem is the low-quality middle management and direction under the operations manager.
Advice to Management / More dynamic training. For someone to come off the street and not know about BPO’s or PI’s or all the other reporting. Teach them from the bottom up how it works, Hire more “older” people, not just Millennials. Get some experienced veterans, would make a world of difference in the atmosphere. Need to hire a Vet, disabled vets, or any kind of vets. There are NONE that I have met.
Pros / Really innovative technology happening here. / Sometimes work life balance can get out of whack, but this is also the tech industry.
Then I viewed a picture of their offices, and my spirit is broken for the day. Wow what a nice office, and they keep building them in more and more states. Puts my 20 year old desk and old broken wood chair to shame. Well, the appraisers are indeed at the bottom of the compensation ladder if dealing with amc’s. That might be a tough sell if lobbying something like the VA, ran by appraisers. Appraisers whom dealt with them only a few short years ago may be surprised they’re reportedly up to 500m revenue company. I think they’ve taken quite a large enough portion of the pie, and something should be returned to the appraisers by now. The conspiracy theory appears to be true; the amc’s seek to eliminate traditional appraising and replace it with a tech based automated approach. That would be why they focus on hiring people with tech experience rather than real estate experience right?
Im reminded of a Treasury Department appraisal friend who keeps telling me being an independent appraiser today is no different than being a skilled high end buggy whip manufacturer around the turn of the 19th to 20th century.
Maybe.
What I DO know is that I continue to provide a valuable professional service to those that are capable of understanding why knowing a property’s real market value is important. Or, why having an accurate analysis of the myriad factors than can affect that value, or marketability is also crucial.
Those folks (attorneys mostly; some tax accountants and people lending their own money) will continue to pay me for my professional services.
If all the other users of appraisal services and the United States Congress and State Legislators; and certain special interest ‘appraisal educators’ are content to participate in the deliberate fraud that is behind the push for hybrid semi automated “appraisals” then they can deal with the results.
Just don’t use MY tax dollars in 2020 for the next bail out. FIRREA as it was written in 1989 was good legislation. Its been twisted and tweaked a lot since then to allow for carve outs and elimination of the checks and balances field review appraisals used to provide. You see, with ‘Big Data’ and computers we really didn’t need all those unnecessary costs, right?
I mean what could POSSIBLY go wrong in say… 2009?
All this bullshit is a disgrace. They handed Millions of dollars to AMC’s off the appraisers back, stole our office managers to pay their little girls, turn times went up, really, appraisers went out of business and went on to better things……didn’t see that happening did they. Stupid people !
But hey, Rite Aid corp pays their store mangers under $14.00 an hour, yet made 1 billion in profit last year.
Good for the rich, bad for the people. But hey, they make more money when we go in debt, so why share the wealth. Greed, pure and simple. No savings to retire, that’s o.k. the tax payers will cover them. Wait what do you mean we have to pay more in taxes to cover things, oh we didn’t see that coming either.
Banks ! All they think about it making more than they did last year and people get fired if they don’t think of ways to make more, which means screwing us over, again and again and again, for 35 years now !
The day of reckoning is upon them.
All they had to do is follow the VA system for ordering appraisals.
Simple.
Talk about a waste of resources. But hey, they are banks after all. Wells Fargo should be put out of business for what they did to the public and their appraisers. Bank of America (Landsafe) treated their staff appraisers like janitors. Now they need appraisers but cant find any more, calling people they laid off in the hopes they would go back. Stupid. Wells Fargo, same thing, “but we cant find anyone” We really need you….. Really ??? Sorry, you blew it ! Now its we need to do something…oh our poor borrowers have to wait. Ya…. they do.
Why was Wells not put out of business. 2 MILLION fake accounts, 5,000 people fired ! Any one of us would be put in jail if we did those things !
Oh yeah, to answer your question of why nobody goes to jail specifically:
The Holder doctrine. Or in laymens terms; the revolving door.
In other arguments this is known as ‘we the citizens, stand against Citizens United’, ‘money is not speech, and corporations are not people’. By defining a corporation as a person, this effectively shifts personal responsibility away from individuals, since a fine levied to the company can now substitute the long standing mandate that someone or groups of individuals needed prosecuted.
How Wall Street’s Bankers Stayed Out of Jail
The Year Banks Finally Paid
Run this search in google: why the doj settles with bankers and nobody goes to jail
There are thousands of such articles out there. The solution is simple; fines based on income, which would incentivize prosecution and class action. As it stands currently, despite the dramatic increase of fines, per article link 2 above, the profits still outweigh the penalties. There is insurmountable challenges for law firms and AG’s alike. Because major corporations profits through such activity vastly outweighs their legal costs, they simply outpace any litigation against them and bankrupt any lawyer or firm whom does not settle out of court, aka; buried in paperwork. It’s all about lobbying in the end, and most elected officials at high levels reportedly spend the majority of their time entertaining lobbyists, and that’s why new laws are apparently never ending. People who bought the lies about Ron Paul and voted for the other guy, are little corporate lobbyists themselves in the end, continuing to promote unsustainably larger and larger government. Fortunately for us little guys, knowledge is power. From a low level perspective, the solutions for all of us are quite simple; Be more ethical and do not rely on the government, refuse any and all instances of requests for larger government; no new taxes and no new legislations unless they are liberty and constitutionally based. Has Trump passed the 1 new law, 2 old laws must be removed yet? That’s going to be Yuge! In the context of this article, Clear Capitol’s actions are simple; They’re lobbying the VA for a redirection of funds and process pertaining to valuation development procedure. Thanks for reading.
New Rules, Same Game
Super Congress: Easy Prey for the Military-Industrial Complex
Good one Chris. You know there is a problem when the entire array of associated businesses whom deal with appraisers fail to deliver potential new appraisers from the working persons pool over a long term. This industry needs people whom can build a house, not a computer program. The amc’s are actively trying to reframe the popular understanding of what an appraiser does, so the appraiser can fit better into their version of a brave new tech future for real property valuation. The amc’s vision for the future of appraisal is a system of purely lender focused advocacy. All appraisers need to do is click the ‘for lenders’ link instead of the ‘for appraisers’ link at amc sites. They consistently boast: faster, cheaper, more closings, more appraisers. They’re doing nothing more than advance selling services for others. Amc’s are like employment agencies whom never hire temp to perm, they only hire temps.
For the life of me I cannot find another profession that writes and rewrites the rules and regulations for it’s “professionals” not only once a year but every month of every year. Do you honestly believe that physicians or lawyers would put up with this horse ship? How about painters? Plumbers? Do you think plumbers would stick with it if they had to learn and relearn the rules of plumbing countless times every single year? I would take a drill to the skull and volunteer to have my nails removed with pliers before considering this “profession” again.
Mind Boggling
RA, one of the reasons why physicians, lawyers, plumbers, etc don’t face the issues, lending appraisers do is that those professions have MORE control and/or influence over their business practices. Again, lending appraisers have lost all control of the lending appraisal process to our “very” clients, lenders/amc and lender interest groups. Pretty amazing….when was the last time you told your doctor that you will pay only a certain $ for a medical procedure or tell you dentist how to fill a cavity. It does not happen. Those professions have control over their business practices. After 39 years in this profession, the appraisal profession has never been in control the of appraisal process. However, with the advent of the AMC business model, the lending appraisers have lost all control of the appraisal process. Lending appraisal has become the closest thing to professional slavery.
RA
David, you got me on that one! Agree 100% (except the nails and pliers part).
Here is the ‘unofficial’ response form those that want to remain anonymous at the presumed ‘official’ sources (1 & 2 only-the rest is just me).
1. It’s no secret that part of it is economic and funding related. TAF needs to sell USPAP (and related courses) in order to generate operating revenue. Personally I’d rather they just raise the quadrennial dues by $65 (online USPAP cost).
2. As one regulator explained it recently the constant changes are necessary in order to torture USPAP into something that appears applicable to all of the various disciplines represented by TAF sponsors (sponsors that account for 90% of TAF funding).
3. Of course NONE of those other disciplines ever appeared in FIRREA; and most are not able to be regulated through or by anything TAF does, so it begs the question about why those specific disciplines were ever sought out as sponsors to begin with.
4. USPAP was originally supposed to be applied as our (appraiser) peers would apply it. Not AARO; AICPA, FNMA. Freddie Mac, ACI, Ala Mode or Bradford Forms, First American (‘Solutions’ or otherwise) or the International Valuations Standards Council; or the ignorant regulators of Oregon, Maryland, Illinois or California choose to misconstrue it. It certainly was never written or envisioned to have foreign nationals on the TAF advisory boards dealing with USPAP as it applies to REAL ESTATE appraisal-as mandated under FIRREA originally.
I submit they have grossly failed at the ONE thing they were charged to do as a result of all the manipulative changes; “maintain the public trust” in the appraisal profession.
hmm….the anti trust issue have been around for 40 years within the lending appraisal business. sometime it is use to keep appraisers weak, divided and under threat (from lenders and government regulator) of lawsuit. pretty amazing…..anti trust lawsuits have never happen in any significant. How can appraisers be charged with anti trust violation when we all know that appraisal profession is a very splintered group. Laughable….Anti-trust is a non-issue IMO.
Wow 41 comments ! Must have hit a nerve ! Very good ! Now, every one of you contact your representative and tell them to contact Congressman Jodey Arrington about Clear Capital/REVVA’s attempt to hijack the best, fairest, most efficient appraisal system in this county and how there plan is bad for the Veterans, bad for consumers, and bad for the industry. Just look at the FHA/HUD and conventional systems ! Everyone, contact three other appraisers each and ask them to do the same.
Jodey Arrington- Washington DC office, 1-202-225-4005. Abilene, TX 1-325-675-9779. Lubbock, TX 1-806-763-1611.
If you live in his district, go pay him a visit !!! ALL APPRAISERS need to become lobbyists for YOUR industry. You MUST begin a dialog with your representatives on these matters TODAY and don’t expect others to handle it for you.
No, No, a thousand times NO! I did a couple of appraisals for Clear Capital way back. I refuse to work for them. They are the worst of the worst. I would not trust them to hold a tape measure, let alone provide accurate inspection/market data from a competent individual. You are asking for trouble in my opinion if you adopt this protocol. As an appraiser, I gather significant and critical information from my inspection of the subject and driving the comparable sales. While some of these tasks might be able to be completed by someone without an appraisal license, it would have to be someone I personally trained and trusted implicitly. It is my license and reputation on the line. I prefer to complete these tasks myself as it helps me in selecting and reconciling the appropriate comparable sales. I often think a sale will be a good comparable, only to realize while inspecting the subject or comparable that it is not at all appropriate.
To the VA, please do not allow this! You are setting yourselves up for massive problems in the future. I am not even on the VA panel, so I have nothing to gain or lose from this.
First American/CoreLogic national data services (RealQuest; Realist, MLS-Matrix, RealValue etc) controls the amount and type of sales data available to agents and appraisers alike. More importantly THEY control what goes into nearly ALL “Big Data”.
First American Realty; using the above will tell you what to sell your house for and list it for your. When sold, First American/CoreLogic will order the appraisal through their AMC services.
First American will sell the appraiser the appraisal forms. First American will do a Home Warranty (insurance) “inspection.”
First American will handle the escrow services.
First American will provide the mortgage origination services.
First American will ‘intercede’ between the ‘loan officer’ and the appraiser through their AMC.
First American (or CoreLogic) will upload the xml and env formats to the CU initially AFTER the appraisal has been uploaded to them using one of First American (or affiliates) Mercury or Appraisal Port systems.
First American/CoreLogic AMC will argue the value with the appraiser for the “lender” (themselves). If a loan is made,
First American will service the loan.
If the loan defaults I imagine we can count on First American to perform the asset preservation services and maybe even list the property for sale with First American Realty…wait a minute…isn’t this where it all started?
Thank goodness for the FTC watching out for us all! Otherwise all the consumer protections and anti fraud protections developed over the past 80 years could be virtually eliminated in their entirety if one company ever controlled real estate transactions.
Mike, don’t forget they will then inform us of fraud and other statistics through interthinx and the like. Yes, on at least one occasion I have seen corelogic paperwork for property preservation. But it seems that with those open market bidding programs they can’t quite yet carve out a monopoly on that particular low level service market. It’s only a matter of time before Corelogic somehow finds a way to usurp pemco, matt martin, and other HUD default servicers. I miss Quantrix but on que, bailed during the buyout period. One day I was on the phone with knowledgeable Americans out of some Northernmost state, the next I was on the phone internationally somewhere in India. Local smaller scale is wiser and simply better. Feeling overwhelmed yet?
Here we go again! Hot off the press
Clear Capital Hires Real Estate Valuations Innovator
Jeff Allen Joins Widely Respected Analytics & Valuation Solutions Leader
Allen will focus on re-engineering and re-imagining how appraisals are manufactured with a concentration on modernizing the valuation industry in a healthy manner. Additionally, Allen will guide internal teams in the development of analytics and data aggregation tools aimed at increasing quality and efficiency around appraisal reports; and vet emerging technology from outside the sector, while continuously supporting Clear Capital’s operational processes.
Previously, Allen served as CoreLogic’s Senior Leader of Valuation Client Operations and RELS Valuation’s Chief Operating Officer where he lead efforts to evaluate and incorporate industry data and product assets into internal technology and processes, including MLS data, Public Records data and other third-party analytics products. Jeff brings more than 13 years of real estate valuation and appraisal experience to the Clear Capital executive leadership team.
Carl- You’re right! Oddly enough when I took all of my appraisal classes, not one of them taught me how to ‘engineer’ an appraisal. So I guess his re emergence in another know nothing company is a good thing, right? Wow! After 30 years I’ve been doing it all wrong! (Is he talking about the CE kind of engineers; the Choo-choo train kind, or sanitation engineers? My bet is the latter. Straight from their software analysis to the trash can somehow seems appropriate.
I have no doubt that they are re-imagining appraisals too. Imagine, if only all those pesky regulations did not apply. Imagine if knowing details about a transaction, property or market were not required. Just imagine…
The FIRST sign of a company that knows next to nothing about appraising is when they start of with all the meaningless warm and fuzzies in their self serving descriptions. The guys history tells one ALL they need to know.
Rels. Really?
PS- I don’t ‘manufacturer’ appraisals. Though their use of that particular term makes me wonder if they do. Right along with manufactured data and values.
Now, if they could only source those hybrids offshore…say to India?
exactly what they will do
http://appraisersblogs.com/clearval-value-hybrid-appraisal
I think the VA is smart enough to realize what is going on here.
What a shocker, Clear Capital has there CHIEF REVENUE OFFICER speaking to congress. His job by definition is to “be responsible for all revenue generating processes“. What do you think his interest is in this? If he can close the deal with lawmakers and end up getting the work to go to CC, I’m sure he will end up with a bonus good enough to retire on.
The AI isn’t any better in this matter.