NAR Bifurcation Position Is a Good Thing
I reread last week’s post in Appraiserville: “NAR Real Property Valuation Committee Issues Position On Bifurcation” and felt I left the reader hanging with this incomplete thought:
But I don’t want our industry to think:
There, we’ve addressed and resolved the threat to appraisers and more importantly, the public trust.
After marinating in this topic, I believe the more accurate way to think of this new NAR policy position is this:
One of the largest residential real estate trade groups (NAR) developed an appraisal policy on a controversial appraisal topic: bifurcations. Appraisers have been battling the implementation of bifurcation for several years, largely on the misrepresentation of future providers of such services such as AMCs and future users of this service, such as banks. Bifurcations may have some very limited uses, but I object to portraying it as an industry-wide replacement for full appraisals. Bifurcations are much less accurate, more expensive, and slower to complete. But other than that, they’re awesome.
Regulators like FHFA reach out to groups like NAR to get feedback on controversial proposals for policies like this. Now one of the largest residential real estate trade groups with about 400 lawyers will be pushing this policy through all their channels, and that is a good thing for the appraisal industry. Groupthink has been steered to the appraiser’s way of seeing the world, the last protector left in the mortgage process to protect the public trust.