A Review of the Appraisal Industry

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AMCs the Single Reason for Higher Appraisal Costs & Reduced QualityPhil Crawford of Voice of Appraisal sent a “call to action” email to his followers early this week to recommend I provide testimony on this upcoming June 20th panel. As a result, there were hundreds of recommendations sent to the House Financial Services Committee providing why I would be a good candidate to speak on the panel. I was blown away by the support and the professionalism of the emails. I thank you all.

The committee told me yesterday that I would not be on the panel but offered other ways to share our views and I was very appreciative of the opportunities offered to me. Today I was told by someone outside of the committee that these were the names of the panelists. Four were chosen by Democrats and one was chosen by a Republican.

Jennifer Wagner (Mt State Justice) Jeff Dickstein (REVAA) Andre Perry (Brookings Institute) Stephen Wagner (AI) Dave Bunton (TAF)

My only concern with the information to be discussed is that the appraisal industry sees the re-introduction of checks and balances to the appraisal process, that the consumer and public trust is protected and a stabilized housing market is promoted.

I have the gravest of concerns for the inclusion of The Appraisal Institute who haven’t been relevant in the residential mortgage appraisal community for at least a decade. My other grave concern is the inclusion of REVAA which is the trade group of appraisal management companies that control 80% of residential mortgage appraisals and are the single reason for higher consumer appraisal costs and reduced quality.

Still, I will keep an open mind and believe me, appraisers across the country will be watching this hearing very closely.

The November 2016 House hearing on this same topic was largely a misrepresentation by the Appraisal Institute on the state of the industry.

However, I have full confidence that Chairperson and Congresswoman Maxine Waters and her legislative colleagues and staff will see the challenges very clearly.

Voice of Appraisal Podcast E226 A Washington DC Shake-Up!!!

Jonathan Miller

President & CEO at Miller Samuel Inc.
Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.
Jonathan Miller

Latest posts by Jonathan Miller (see all)

Jonathan Miller

Jonathan Miller

Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.

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33 Responses

  1. Kathy Hubbard Bright on Facebook Kathy Hubbard Bright on Facebook says:

    We share your concerns. But I would rather lick a frozen flag pole than testify in front of Maxine Waters.

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    • The people that have the greatest ability to affect our profession right now is the committee Chaired by Congress Member Waters.

      Every single licensed appraiser in America has their own core political beliefs. We all have to put aside partisan politics in our efforts to preserve our profession. The alternative is to have someone else’s views and will imposed on us.

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      • Kathy Hubbard Bright on Facebook Kathy Hubbard Bright on Facebook says:

        Yeah, but look who’s on the panel.

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        • Yeah, THAT was a kick in the head! One jurist; and three very distinctly self-interested parties. Two of whom outwardly share the same objectives (bifurcated hybrids/alternative standards); and one who led the organization that has successfully eliminated almost all public trust in appraisers and appraisals. I dont think AI and TAF are remotely as far apart as most people think.

          TAFs policies since 2009 have played directly into the hands of the small leadership cadre at AI.

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          • Kathy Hubbard Bright on Facebook Kathy Hubbard Bright on Facebook says:

            The deck is stacked against our industry once again. Consumers need to be aware of the problem. Protecting their interests first is the only way to protect ours.

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            • Baggins Baggins says:

              Post a list of lenders whom still offer in house carried mortgage loan products, describing exactly what consumers need to do in order to access those.

              I’ll take a screenshot of the panelist speakers and replace their faces with their employers company logos for a better visual depiction of whom was represented and whom was not. All the familiar big corporate labels will be there. The politicians really should have to wear sponsor labels like nascar drivers… At best, we might hope for a flip flop.

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    • Helen Bereznik Grace on Facebook Helen Bereznik Grace on Facebook says:

      Kathy Hubbard Bright she’s pro consumer. We protect the consumer as well as the bank. Why would you not address her. She could help us. Maybe her personality is abrasive. But in her position and up against men in power, we need women like her. She doesn’t get intimidated easily.

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      • Kathy Hubbard Bright on Facebook Kathy Hubbard Bright on Facebook says:

        Helen Bereznik Grace It’s all about your political affiliations with her. Forget right or wrong and remember left and right. That is not the reason representatives are elected.

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      • Harley Hong on Facebook Harley Hong on Facebook says:

        Helen Bereznik Grace she is not pro consumer. She’s pro Maxine, but she’s not pro consumer. She doesn’t even live in her district

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        • Harley, NONE of that matters. What she IS is the Chair Person of the one single congressional committee that has the most influence overall appraisal issues in the country.

          People, the issue is not a red and blue issue or a personalities issue involving a Congress Member. The issue is communicating effectively with the most influential person on things directly affecting our profession!

          We already know how strenuously opposed she is to the other side. Appraisers that are supporters of the current administration may find it difficult or unpalatable to accept her oft-stated opposition, BUT she IS the power that controls the narrative on housing issues.

          The appraisal is one such issue.

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          • Baggins Baggins says:

            It’s important to remember that as individuals, we don’t have to tow any line or status quo position. Personally, I vote the issues. Bought and paid for corporate news has everyone running around chanting red blue red blue. There is a better way.

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  2. Avatar Realrose says:

    I worked as an appraiser in Los Angeles County for 35 years before moving; I have lived and tried to work in Montana where one of those people on the panel come from; I hold the MAI and understand why every appraiser who is not in favor of the AI is disgruntled; I have worked on commercial and residential appraisals for litigation and have followed USPAP, all the way back to when it was R41A, R41B, R41c, which morphed (with the help of The AIREA (American Institute of Real Estate Appraisers) into USPAP.

    When the first bailout happened (89-90 S&L) I was a review appraiser for FSLIC for both commercial and residential properties all over the country; that organization was dissolved and we were taken over like a bad bank by east coast thugs (FDIC) who reviewed us and gave us government ratings (GS12-as a commercial reviewer with the MAI), then we became RTC (Resolution Trust Corporation); assets were appraised to a high standard and expert appraisals were hired all over the country to estimate the market value of good and bad assets and it was finally resolved in 1996; between 1990-96, as a woman, I could compete with the highly qualified and experienced men who dominated the high value real estate deals. Many of the assets that became REO from the S&Ls was because there were no deductions for the cost to build it, lease it, carry it, including profit, so stuff was selling at well-below cost.

    Now we have all experienced the changes Dodd-Frank made to our industry, and there were politics involved which changed the game. TAF and the ASB has tried to replace the Appraisal Institute but they are not doing a good job; they are a paper tiger and no state has lost licensure for its appraisers which is the threat for states constantly not in compliance with carrying out the regulation of appraisers- but some bad testimony was given in the Dodd-Frank era and now we have the so-called “modernization” of the appraisal profession which essentially replaces human, trained, governed by canon and law, professionally educated and trained, licensed and insured people who help provide for the public trust being invaded by computerized programs that are based on artificial intelligence that are on the net for free; listings and photos of properties on the MLS (which costs appraisers a whole bunch of our overhead), so our profession is considered expendable. Not.

    Now we need to get behind Jonathan Miller and give him our input so he can represent us in an effort to avoid the inevitable next bailout which is currently being engineered by Fannie and Freddie who are always dictating what is in our reports and how they are presented. We are no longer independent; we must take action and NOW, or we will all be gobbled up by big data and the manipulation of crafty con artists who are sometimes those suits running things in banks, favoring their friends, etc.!

    Now get busy and write all your congress persons, senators and let them know we will not be squished because we interpret data by actually seeing the property and using our trained eyes and experience which can’t be reproduced by a nerd sending us photos to our desk while we get $75 for a hybrid appraisal! Many people can lose their homes again, and we will get blamed again, just to rid them of our fees which are nothing less than $800 for a typical SFR, yet those AMC bloodsuckers are getting as much or sometimes more than we get and it is our license and whole life to keep doing what we love and have learned because it is quite an interesting and rewarding profession, that is, when we get to run it! There is no lack of appraisals, but consumers will get to pay $500 to the bank for a waiver of an appraisal, just so they can later write off the losses, then resell it to another investor group who is behind the scenes, scheming on how to steal your hard-earned equity which is sometimes fake, but it is all someone might have, and it is often the family’s most valuable asset, something we can retire on, or finance to send kids to college, but it should be in the owner’s pocket, not a manipulation by con artists who rap numbers that make people’s heads spin.

    After 40 years I am done; I could testify to Maxine Waters, or take her to lunch and explain it to her, but we have to get together about this because our ship is taking on water!

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  3. Avatar Woody Fincham says:

    My advice would be that everyone email the president of the appraisal Institute at ss.wagner@live.com the appraisal Institute needs to be giving a similar message to what’s in the title of this editorial. AMC’s are causing problems not solutions for consumers.

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    • Avatar Realrose says:

      As a member of the AI holding the MAI, I would add that we have inadequate and incompetent lobbyists that are being paid from our dues. The top guy who handles federal issues was a former lobbyist for a mattress company; the state lobbyists is a failed politician who ran for office in Baltimore and didn’t raise one penny! Of course he lost; neither of them are appraisers. Although they may work to get representation for appraisers they have done absolutely nothing productive while the banks and realtors who outnumber us are eliminating us from the profession that developed as a result of the Depression. That is where “protecting the public trust” came from. Now we are the ones who are not trusted in favor of artificial intelligence (algorithms) written, again by non appraiser nerds who got their programming job because they are good at playing computer games.

      Just who is actually in our court? Nobody with any brains or ethics! Then we are supposed to watch every character typed into our reports when it is an art, not a science. Numbers don’t tell you everything; you have to get into the minds that met to make the deal and understand motivation, by verifying your data. None of the data used in these algorithms is verified, just public data or MLS which is a sales pitch. Our job is to figure out who is lying to us and how much they are lying, so with so much bs out there in the data, none of it is property and exact location specific, unless a trained, experienced and competent and honest appraiser as done their job, and properly, according to USPAP. Now TAF and the ASB are changing USPAP and we are just letting them take our profession away without fighting because we are all so “independent”. If you follow what fannie tells you do to do, you are not really independent, you are working for the idiots who crashed the housing market in 2008, then hired foreign computer nerds to “review” the original appraisals, but you couldn’t find the appraiser guilty of any USPAP violations! So they are there only to dictate to us and they don’t know much, except they get a stable, fat paycheck while we compete for peanuts because nobody wants an honest appraiser, even the borrowers! Hence, liar loans which I am sure still go on….

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  4. Talk about a stacked deck! I like the idea of a jurist on the panel; but the others? REVAA; AI and Dave Bunton?

    Seriously?

    The proponents of alternative standards and hybrids, coupled with the guy that lead TAF to change so many terms and conditions of USPAP in order to facilitate both?

    Woody’s advice above is good (for AI and non-AI members alike, but don’t think for a minute an AI rep selected for this panel is going to oppose third-party inspections or hybrids). Better to send emails to the panel direct.

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    • Avatar Realrose says:

      The jurist is from Montana. After practicing as an independent appraiser for 35 years in So. Cal, I moved to Montana in 2013. I applied for my reciprocal license. At that time they had one person running the bureau of real estate appraisers and the board was full of MAIs that were from other states. The clerk who ran the appraisers bureau was an idiot. I told her in person that I was licensed in another state as a Certified General and I wanted to know the procedure for getting my Montana reciprocal license. She told me I needed to submit 10 reports of SFRs in the past six months and she would review them. I told her I was a commercial appraiser and didn’t do much lately because I was moving to Montana. She said she would “bend” the rules for me and allow me to go back one year for reports. I said I did an apartment building narrative and a form on an upscale residential area on Mulholland Drive and so I submitted those, plus she wanted my whole workfile. This was extensive, so I copied a suitcase of info and electronic files and Fed Ex sent it to her by her deadline. It sat on her desk a few days and when I called to see if she received it she said no. Then when she pretended to finally receive it she said I had multiple USPAP violations. I went before the board the exact day (September 24, 2013) the TAF was there auditing their office for compliance because they were always out of compliance. I had one frank MAI tell me Montana didn’t believe in reciprocity, like it was a religion! They said numerous appraisers in MT tried and failed to get their MT license so they went to Colorado or other adjacent state to get their license, then came in the “back door” to get the MT reciprocal license. Some residential appraisers I met while there said it took them 5 years and lots of reviews by this one woman to get their license. So it was a closed group. The current board of MAIs, volunteering controlled who got to work there as an appraiser and they got theirs, so like nimbys, they denied others the same, meaning more work for them. wasn’t going there to take over Montana, I just wanted some work.

      The day I turned in my license application was June 3, 2013 and I finally got before the board on September 24th, 2013. They denied my application because this non-appraiser reviewing my CA appraisals was incompetent and just accused me of having violations, but there were none! he TAF was in the back of the room watching this like CA appraisers are generally inferior and can’t appraise in MT. It was pure discrimination and RESTRAINT OF TRADE!

      That woman is not in charge anymore, and I testified that I thought the process was unfair. One of the backwoods residential guys was that woman’s friend and he tried to buddy up to me and tell her how to kill my app! It was so demeaning when I can appraise circles around these people because there isn’t any land or building in Montana that we don’t have thousands of in CA; I studied Urban Planning before I became an appraiser and I just do more to get to know a new location than most, so I can meet the standards of being geographically competent. That was a buzz word back then to keep people from outside their former market area out of their market; that way they can line their pockets with all the fees and kill people’s careers.

      Needless to say I moved to Oregon and had to disclose the first black mark on my record in over 35 years, that MT didn’t approve my recip app, but Oregon already knew about that woman and the problems she made for appraisers, so I got my license here and I have stayed here. I still have my CA license but I don’t get much work there so I don’t know if I will continue to be licensed there or if I will get temporary licenses when I do.

      By the way, that MT woman gave me temporary permits to appraise on a per job basis. I had to give her a copy of my contract, so she knew how much I was getting for the fee and who my client was. That was such bs, I get mad just thinking about that. Until I came to Oregon I’d never worked for an AMC but did so just to get started up here and I did form reports on houses while I got geographically competent, so I paid again for my newness, but I al OK about doing more work than the average appraiser because I do litigation appraisal work and I am meticulous about details and verify everything on every job; that way if they can find something wrong with it, let them try; most of my cases settle because my work speaks for itself.

      I will never do a hybrid, and if the government allows FNMA to dictate what is on the form and how we do our work then they should be sued for back wages for anyone who slaved for the pimps called AMCs. There is nothing good about working for them, they degraded our profession and I wouldn’t trust that so-called jurist from MT because those people are pretty twisted there, especially if you have dark skin, are a Native American, or Black person; it is especially bad if you don’t go to the same church, they just don’t trust you! That is why there are only 1 million people in that state because they run you out of it if you are not just like them, it is just the white cowboy justice; they make their own rules and don’t care if they are in compliance with federal law because, hey, they live in the boonies and it is very pretty there.

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  5. Avatar marion says:

    AOC is the NY rep on the House Finance Committee.

    Maybe speak to her personally, as a concerned NY citizen. 😀

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  6. New York appraisers should certainly do so. Followed up by specific written requests and concerns. for ex:

    1. I oppose the current bifurcated appraisal trend because it has the following adverse impact on consumers and taxpayers:….

    2. Having REVAA as an appraisal panel member is grossly inappropriate. They are a trade organization that lobbies for the interests of groups that have next to no expertise on appraisals; appraisal requirements and propriety or independence of appraisers. It is REVAA itself that has most often challenged Dodd Franks mandated reasonable and customary fees. Fees are a necessary element of acceptable quality of work.

    3. REVAA has been the taxpayers and consumers worst enemy when it comes to appraisal integrity and credibility.

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  7. Avatar Bryan says:

    Do we know who made the final panel selections?

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  8. Kathy Morton Bunting Hoey on Facebook Kathy Morton Bunting Hoey on Facebook says:

    Does Anyone have an E-mail contact for Maxine Waters? I went on her web page and my E-mail was denied because I do not live in her district. Is there another address we can use to contact her regarding this issue?

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  9. Baggins Baggins says:

    Not letting a senior licensed appraiser whom everyone is supporting speak, that’s a tell all. Perhaps they have preconceived conclusions and the panel will be all show as a necessary step to make these ready to implement sweeping changes.

    If Mr Miller wants to make a difference, do not take no for an answer. Panel appointments are suggested by lead members and approved by the chair. It’s important to know exactly who denied the request, what their position and rank is within this committee, and go around and over them if necessary. Sometimes you’ve got to whip the whip, circumvent jr chair persons, and present your letter to read to the chair ahead of time to obtain any floor time. If you can’t make an appearance you can still mail a written letter to every panel member individually, and request someone use their minutes to read your letter in your regrettably forced absence. Floor time matters and submitted for the record commentary goes nowhere.

    “I’m concerned the conclusions of this panel are already determined before this hearing begins. The possibly disastrous consequences of such influential changes is no small matter and it defies logic that this panel would not entertain an invitation to speak for one of the most successful and influential appraisal firms in this country.”

    Go on to dismantle the credibility of the amc groups, the non experienced lobbyists, illustrate these groups financial incentives. Of course they won’t let an appraiser speak, you will be watching political theater.

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  10. Baggins Baggins says:

    Related: Modernizing appraisals, subcommittee hearing 11/2016

    https://www.govinfo.gov/content/pkg/CHRG-114hhrg26005/pdf/CHRG-114hhrg26005.pdf

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  11. Avatar CJK says:

    I just received this today, I do not even work for this AMC:

    “Dear First Look Panel Member:

    First Look is excited to announce that we’ve been selected to participate in the bifurcated valuation process starting this summer!

    We’re reaching out to you, a member of our trusted panel, to let you know that we intend to work exclusively with our appraiser panel on all aspects of this new program.

    In addition, we’re inviting you to participate in a brief survey. Your survey response will let us know if you’re interested in participating in the program.

    As you may already know, the relatively new bifurcated valuation process requires a physical inspection of all eligible properties with the use of a mobile inspection application and in certain circumstances, a full desktop appraisal following delivery of the inspection data to the lender. The inspection portion and the desktop appraisal (if required) are considered distinct and separate assignments where you as the appraiser can participate in either or both at your election.

    First Look will be working exclusively with our trusted panel of licensed appraisers (and trainees) for the inspection assignment portion of this process.

    Knowing that licensed appraisers have the most experience with valuation centric inspections, we’re confident that our trusted panel (and only our trusted panel) should partner with us on this new process and product.

    We’ll provide additional information as we approach the official launch date. In addition, our Chief Corporate Appraiser will be hosting webinars with further details and to answer your questions.

    Thanks for taking the time to read this important message. We thank you in advance for your response to our brief survey.

    Are you interested in performing property data collection assignments?

    Yes

    No”

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    • Baggins Baggins says:

      Inspections only and no other work? Sounds like a gift of manna. They’ll just need to assure an equivalent rate, which for me would be $150+ per. I have always said, if I could only do inspections and never have to fill out the tedious forms, I could easily double or triple my income. As long as some appraiser out there is willing to rely on strangers, take on all the professional liability, and absolve me of all possible liability, yes, I would like to only complete field inspections. Being tied to the desk all day is absolutely awful. I’ll have to call my insurer and make sure it’s a covered activity first though. I’ll probably also want the amc to sign an additional page I furnish to them, absolving me of any and all potential liability under any and all circumstances. Anyone have a good ready to go disclaimer page for this activity? I’m not being sarcastic here. If I can get inspection only at 150+ per, guaranteed at least 2 a day on average, I would be game for that working activity and it would be a great break from gse form filling. For the form filling portion, relying on someone else’s inspection data, not now, not ever.

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    • Shaun Murphy Jr. on Facebook Shaun Murphy Jr. on Facebook says:

      I got that too..

      I deleted it faster than I do their actual appraisal requests! LOL

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    • Avatar Bryan says:

      Say yes and put your full report fee. Otherwise – say NO! Are you joining the race to the bottom? I’m rarely glad I’m old……..

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  12. Shaun Murphy Jr. on Facebook Shaun Murphy Jr. on Facebook says:

    I am 38.. I’ve been doing this for 15years..

    The ONLY appraisers that have a right to complain are the ones that refuse to do low-fee work (like myself)

    All I hear is griping about the AMC’s – from appraisers who have constantly have fifteen $350 AMC appraisals in their queue..

    I don’t do AMC work, but they may not be so bad if their fees were actually ‘reasonable & customary’….

    As long as appraisers continue to accept low-fee work, nothing is going to change

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  13. Shaun Murphy Jr. on Facebook Shaun Murphy Jr. on Facebook says:

    How about everyone STOP DOING AMC WORK !?!?

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    • Avatar Bryan says:

      The trick is convincing the lending institutions to STOP using AMCs. They could easily give us a raise and lower their clients cost in one fell swoop. About 8 financial institutions in my area. One orders for themselves. Wish we had an organization that brought us together that could address the lenders directly. One Appraiser telling them falls on deaf ears. One national organization with all of the state organizations as members. If anyone thinks AI I would like to pre-laugh.

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A Review of the Appraisal Industry

by Jonathan Miller time to read: 1 min