Appraisal Waivers vs. Public Trust
If the ASC grants the request for appraisal waivers, the precedent will have been set for other banks to follow…
TriStar Bank has requested appraisal waivers for the entire year of 2018.
According to the bank, they are having difficulty getting appraisals in the Nashville area and there is only one Certified General Appraiser in the the locality in which they are headquartered.
Below is an excerpt form their letter to the ASC. They offer options in lieu of appraisals:
- Obtain an estimated value from a Realtor, selected from a small group of trusted Realtors who are not involved in the property transaction, and have our senior officer validate the value; or,
- Obtain an evaluation from Clarity Appraisal Management and then have our senior officer validate the value; or
- Our senior officer will research comparable sales taken from MLS data to determine the appropriate value.
So what does this have to do with Virginia Appraisers? If the ASC grants this request, the precedent will have been set for other banks to follow, AND THEY WILL!
If the ASC grants this request, not only will that reduce the number of appraisals ordered, but the public trust will be eroded. The purpose of licensing of appraisers will be null and void.
See the entire letter here or below.
The Tennessee Appraisal Board discussed this request at their recent meeting. The discussion starts at 1 hour 56 minutes. This is a must see video! See the video here or below
VaCAP does not know what the procedure will be for the ASC to determine this request, however, we have heard there will most likely be a public comment period. If that is the case, we will ask each of you to submit comments to protect public trust.
In Other News
The Louisiana Real Estate Appraisal Board has filed a motion to dismiss the complaint against them by the FTC. This motion is 213 pages long and includes letters of support for the dismissal from many industry players. Of course the only comment in opposition of the dismissal is from REVAA. LREAB has done an excellent job of disproving their claims by citing excerpts from Dodd- Frank and Louisiana Statutes. See the motion here.
VaCAP will keep you posted on both of these profession changing events as they occur. Thank you for supporting VaCAP!
- We the People… - April 9, 2023
- Federal Valuation Agency Impact on Appraisers & the Public - July 22, 2022
- Is Georgia Going Rogue? - June 13, 2022
Is it true there is only one CG in Nashville?
That’s what I was wondering?? How in a large metropolitan area like that can there only be 1 appraiser???
There are many dozens of general and residential certified appraisers that show up on the state website when you type in City as Nashville. I got bored after counting to a couple dozen+ one by one. That was just on the first of three pages listed.
Now they did parse it by saying none found in City where they are headquartered. Maybe their HQ isn’t even located in Tennessee in which case their claim could be accurate.
OK, main offices in Dickson TN; others in Columbia and all are very near to Nashville but more suburban.
Twelve Certified Appraisers located in Dickson so it would appear that whoever made that claim to ASC is not well acquainted with the truth. Maybe the actual headquarters is located in unincorporated county outside of even Dickson? You know. Down in the CEO’s basement of his rural estate?
Everyone write ASC James Park at ASC and ask him to seek clarification or support from TriStar Bank about their claims. Maybe he can send them the link to the state website or even ASCs website with appraiser addresses.
No wonder those poor folks need waivers and AMCs. They cant even run a web search adequately.
God knows how they operate a bank! Yet another proven, high competency lending source!
Are there any readers of this blog located in Tennessee that can contact the management staff of TriStar Bank in Dickson and assist them in how to find appraisers online?…maybe check and see if they can tie their shoes by themselves while you are at it.
For my part, I’ll see if we can arrange to have some pension funds invest in this bank. They seem like great stewards for investor’s life savings.
No. 64 in Nashville; five in city they say has shortage 69 total in very short driving distances.
Probably only one who will work for next to nothing
They forget. We are fee appraisers not free appraisers
TAF seems to have been engineered for the majority of industry Bank Sponsors. Otherwise how else could the appraiser side be so rigged?
I respect TAF and it’s Boards, though I strongly (vehemently?) disagree with the propriety of their member composition.
FIRREA authorized ASC and TAF for REAL ESTATE APPRAISAL/APPRAISERS.
Not business “valuators”, unlicensed personal property appraisers, art and gemological appraisers,etc.
Nothing wrong with them or their following USPAP, but there IS something wrong with any discipline other than real estate appraiser being on any board of any description that analyzes, drafts, writes, proposes or votes on matters affecting real estate appraisers.
They lack relevant competency. They also make for a stacked deck. Lacking expertise, whenever one or two actual real estate appraisers propose anything, I suspect the non RE appraisers simply go along with it. Think about that..
What we all believed to be decisions and recommendations by well informed professionally representative boards, are really the desires of only one or two people-nationally.
TAF needs to segregate ALL non real estate appraiser functions from the other disciplines and projects associated with those disciplines. All of them. No exceptions. USPAP may or may not be a great idea for them, but not if the REAL ESTATE definitions, policies and practices-even core principles have to be constantly tortured to meet some misguided one size fits all solution.
Sponsors of one or more other disciplines other than real estate should have zero input into the rules and regulations or advisories affecting real estate appraisal and appraisers.
I urge all to go back and read the opening comments about FIRREA’s purpose regarding Title XI.
Start writing to Mr. Park at ASC or Congressman Hensarling.
Tom, thanks for participating in the blogs. My new tagline; “Everyone is running the appraisal industry except appraisers.”
Baggins, yup. everyone has been running the appraisal industry except appraiser. Plus, those appraisers trying to run it, can’t get on the same page., let alone the same meeting room on the same date.
They said there was only one general appraiser in Dickson County which is the county their base of operations is in. Dickson county joins Davidson county which is Nashville. There are plenty general appraisers there that would come to Dickson county.
Several certified that show up on the sate list right in Dickson itself.
YEAH! Like isn’t the traditional action if you’re down a man, to hire a new man? These idiots would rather seek regulatory exclusions than source talent. It’s the snowflake effect and apparently millennials are running that outfit right now. Next they’ll ask for welfare and waivers and bail outs and we’ll have to take sensitivity training about their hurt business feelings and self identified highly polarized illogical positions. Give them an inch they’ll take a mile. There is no ‘right’ to lend. They can source talent or they can fail, that is how the free market should operate. So what if they don’t make a loan. That’s the question, so what?
Where is the info on appraisers to back this up? Sounds a little one-sided.
So now their AMC, Clarity, is going to evaluate and put a value on the property and the evaluation will be reviewed by the bank’s senior loan officer? WTF? What a scam! How much is that going to cost the consumers?
Is the senior bank loan officer going to be liable for his or her review? Bet not. Has anyone actually checked to see just how many appraisers there really in the area, or are we just taking the lenders word on it? Lets let real estate agents give a BPO. Yea sure. I would like to know how many loans went south due to agents doing a BPO. Currently, if I’m correct, there are only four states that do not allow a BPO. Which brings up my next question, how much of their work were appraisers blamed for? This is exactly what banks have been trying to do for years, Get rid of the appraiser…Who will they blame next time? Not me. Don’t work for them anymore. Just divorces, family estates and foreclosure work.
I did. See posts above.
My research -The AMC they list in their letter, Clarity, is owned by Jason Bennett. He’s a recently added board member of the Tennessee Appraiser Commission. Seems odd Clarity’s name comes up in that letter as an alternative around getting an appraiser right after he joins the appraiser commission. I wonder if somebody should look into that.
Jason Bennett, Owner Clarity AMC & Valuation Services 7984 Coley Davis Rd • Nashville • TN 37221 615-239-0550 •
According to the Tennessee Appraiser Commission website, there are around 15 appraisers in Dickson County, TN. Five are active CG’s. There are scores of others in nearby counties, including Montgomery (Clarksville), Williamson (Franklin), Maury (Columbia/Spring Hill), Davidson (Nashville), and others. Looks like a couple of hundred appraisers with more than 50 CG’s when looking into all cities represented in those counties they say are without service. There are plenty of appraisers to handle business from even the largest corporate banks in those areas. TriStar is just a small community bank. https://www.tn.gov/commerce/regboards/treac/consumer-resources.html
Great research Job Dan. Kudos!
Understanding how many appraisers may be available is much easier than that. Someone needs access to mercury, appraisal port, and perhaps one other. All they would need to do is use the build an appraiser panel tools to see how many appraisers offer coverage in this area. The government can not make informed decisions without the same access to appraisal servicing software the lenders have. They should order Mercury database access by judicial authority and see who’s really out there willing to cover these areas.
hmm…..after 37 years in the appraisal profession, it still amazes me, how lenders, lender interest groups and other non-appraisal entities continue to come up with new methods to avoid the appraisal process. It’s still, all about faster turn time and and lower costs (fast and cheap mentality) NOT about improving appraisal quality or reducing loan risk. What’s even more amazing, is that when the next down turn hits the real estate market, the appraisals and appraisers will be blamed for poor appraisal quality. Let’s all get real, to what is happening and call it for what it is………another sham to discredit the appraisal process and those that work in it.
You are being too kind to them about their motivations. I accuse them all of outright attempt to defraud consumers; taxpayers and agencies of the United States of America…
but perhaps Im being unfair.and have misunderstood the S&L crises; RTC, FIRREA and the Greatest Theft in US History (TARP).
yup, that too.
There are 163 members of AI within a 20 mile radius, this is total BS
This REALLY needs to be brought to the attention of those who make the decision on this. The Appraisal Institute MUST speak out on this in a BIG way !!! Cut the AMC’s out, pay the appraiser a reasonable and customary fee, and I’m sure one of those 163 appraisers will be glad to help out and in a timely fashion !!!
AI proposal at the last Subcommittee was opposed by AGA and others because of the messengers, more than the message.
AIs lobbyist Garber pointed out FIRREA never authorized a certain board and he postulated that ASC has outlived its usefulness.
Many of us (including me) thought it was only an issue of side stepping geographic competency. We could not have been more wrong.
While I think ASC and TAF can and should be preserved, I also think the suggestion of a single Federal License (NMLS style) can and should be implemented. I mean, we have all already taken and passed tests established to meet federally mandated criteria.
Garber told me at an AI’s SRA designation award dinner when I complained to him about abusive practices by the AMC’s that “I pretty much have to do what the AMC’s say because their clients the banks have all the money,” i.e. suck it up. That same night a speaker got on the stage and let us know about a new organization forming called VaCap.
Woody, do you have an email address for Mr. garber? PM?
Wow a national license Mike? That’s a trip. I would drive down to all corners of the country if I needed a pick me up and work super premium 3x rate fees. I’ll be in GA tomorrow if I can triple my existing high range fee. Pay me $1950 per appraisal and I’ll live out of the back of my durango and appraise like my life depended on it for at least a month straight without any breaks or any days off. The heads of lending companies earn far more than that from a cushy desk. The truth is though, it’s entirely too easy to get a loan. Who exactly prioritized the lenders ability to make a loan as being higher in priority than consumer safety and the free market and existing regulatory requirements? I’d bet that was the lender.
Baggs, that was my concern and most others I heard from last year. Truth is it is not a probability. There is still the issue of competency. I was asked a week ago if I would go to South Dakota on an agricultural issue. Tempting as it was, soil yield and farming area not my strengths.
My change in position is based on cases i’ve investigated over the past couple years and most specifically in the past years.
Those cases include one against me in which the admin law judge proposed 100% vindication of myself and AMC involved, and denied the State recovery of legal fees. Until then, I didn’t know that the state agency can simply reject the ALJ decisions outright. It ONLY counts IF they win. Legal Costs so far $140,000. State investigator (who will be named in later articles since its on the record) directly committed perjury (twice) and intentionally ‘mislead’ dozens of other times, but judge recognized his testimony for what it was-not convincing. Said state failed to meet required burden of clear and convincing evidence on every single allegation. State Supervising Deputy Attorney General; for Los Angeles area, was humiliated on a daily basis for five days and is now “peeved” and a teensy bit vindictive (If she thought her humiliation was bad in Admin court, wait til we get her in Superior court).
Sr. State Investigator appraiser claimed he didn’t know what AARO is (though his boss was a Director of it at the time; and a Director on the ASC advisory Board by the way!) – Need a little House cleaning there Mr. Park! You may want to reconsider that ‘Excellent’ rating ASC awarded California for the only time it 28 years. Seems they are still shredding records.
We (AGA) have a member in Maryland right now. Seller LP was $325k dropped eventually down to $270k SP $270k DOM 146+ Appraised value $235k EXTREME pressure put on appraiser by Streetlinks, seller and listing agent & loan broker for almost two full months to push value. Seller dropped price and agreed to (subsequently reduced price of $233k) and FHA sale. THEN she sued the appraiser! TO build support for civil suit she also filed complaint with Maryland DLLR. Claimed appraiser ‘missed’ driveway and a patio and did not give value to an unpermitted “in law quarters.” There was 2 1/2 feet of snow on ground at inspection. State said MLS showed driveway. THAT is a false claim. We sent three people out to verify it. Appraiser did NOTHING wrong as far as USPAP goes. NOTHING. State has an out of area hack-reviewer contracted and they picked him to go review the property 86 miles and six counties away. He took the sellers and listing agents word that the family room with wet bar was an “in law quarters” and said Dway existed. He either lied about seeing it or is extremely negligent. Appraiser attorney was an E&O atty that just automatically takes the settle its cheaper approach. That atty abandoned him 3 days before his trial. He (& we) asked for continuance to allow him time to get an atty. State said no & Railroaded him. Hes seeking reopening of case now but burden is very high to do that. “Protecting the public” is a one way street in maryland.
Minnesota case – AGA member cited for insignificant GLA discrepancy and not adjusting for wooded area behind lot on other side of six foot high fence. State Review/Investigators position “Everyone knows you adjust for that.” Our member won that one. Cost? $38,000.
Y’all know about Oregon and coercing settlements as USPAP violations for late deliveries. Respected author and publisher of RE articles said he interviewed State guy who later claimed no one was punished. Sure they weren’t.
Last November Congressman Hensarling testified that there is NO consistency in application or enforcement of USPAP across America. He was right.
States have proven over and over again that they cannot uniformly or consistently apply USPAP or interpret it correctly. Only TWO states I’ve been involved with have properly followed USPAP in the review of the appraiser. (KUDOS NY and NJ!).
Georgia – Appraisal company specializing in listing appraisals. owned by Board member. What do you think happens when appraiser doesn’t hit SP at LP there? File complaint against one of those over valued LP reports and appraiser? Good luck!
Texas – Board alleged to work behind scenes with area brokers to eliminate competition AND appraisers that don’t play ball with certain builders. Issue still pending.
We don’t have enough space here for all the cases. Besides, Im going to be writing a full book on my court case, for appraisers. (We all agreed even if Hollywood wrote a script casting Laurel and Hardy as the State Investigator and Chief of enforcement; with Cruella Deville as the DAG, no one would believe State employees could be that hilarious). The sad part is their circus is funded by taxpayers and affects other peoples lives.
Looking for Virginia to actually enforce that C&R fee law? Don’t hold your breath! No more likely to enforce that than they were for the unlicensed Coester issue not so very long ago.
There actually IS a solution and it entails a bit more than simply saying fed licenses (which we have ALL ALREADY passed! – our states licenses were based on standards imposed by the feds to begin with). As I said, the solution is a bit broader than merely setting fed licenses in lieu of state enforcement. More details will be coming out shortly. Please keep an open mind.
Area competency will not be ignored or overlooked.
That comment was supposed to land end of page, I’ll swap it out here.
So they are asking for these waivers for commercial properties?? Sorry, but I really busy and guess I’m not understanding why they only state the amount of CG appraisers in the area. I agree with the above statement about not paying the fees appraisers are requesting or is it that enough appraisers are washing their hands in regards to AMC’s. Guaranteed this will be one of the causes for the next crash if allowed.
Well, we’re on our way to another train wreck. They just won’t lean until hundreds of billions of dollars are lost how NOT to do things.
Also, there is not an appraisal shortage, there is a shortage of appraisers who will work for peanuts. If they would really pay a Reasonable & Customary Fee, there would be enough appraisers
Let’s all put our heads together and think…. Perhaps the best way to stop lenders looking for quick and cheap and actually put value in a reliable valuation, would be to leave the lender holding the bag on a bad loan. Now how can we get laws passed that says this? Oh, quit thinking about the ones already there… we must need new ones because it didn’t happen last go round. We must need one that REALLY states it. You know, like when mom yells for the 15th time and says this time she really means it…. Yeah we need one of those laws.
Anna, I think you are on to something there. Im thinking of even more Draconian solutions. Oddly, ones that could work, but have to keep close to the vest for time being (couple weeks).
Anyway, whatever solutions we think of, we have to remember Treasury Department Partner with FNMA sees their continued earnings as a windfall that makes them look great. NO bureaucrat is going to go before Congress and say “Ya know that FNMA thingy that’s paying us billions per year now by making reckless loans? Well, it seems they are also doing it in a way that will bankrupt the country. Gotta shut that model down.”
Sooooo. We need another solution, but I think you are on the right track. Think (1) Absolute commitment from Congress to never bail FNMA or PMI insurers out again even if the sky actually IS falling next time; (2) Cut FNMA and Freddie completely loose from GSE. We have VA and FHA and NCUA. Let FNMA go fend for themselves in an international market with NO taxpayer GUARANTEES (3) Get Congress to write tough fraud law. One that puts CEOs n jail for malfeasance and or egregious incompetence next time (like THAT will ever happen). Let’s brainstorm folks.
AMEN!!! You have nailed every point! I said in 2007… the builders that didn’t go to jail could have been hired to build the new prisons that would have been needed for all the looters/thieves.
Yes these are inspiring ideas but you can’t regulate away risk. Any and all efforts to write legislation to protect the public or any given group will inevitably result in a biased approach where the lender ultimately carves out the strongest position. They write the laws. The vast majority of laws today although seemingly well intentioned are actually written behind the scenes by the very same major companies the laws supposedly will regulate. It’s called regulatory self asking and is the most effective mechanism for using the power of government to stake monopoly claim and drive out competition and avoid the requirements of an actual free market setting with personal accountability. aka; bureaucracy. The free markets will take care of imbalances but only if there is a valid free market force to drive the engagements, which would be actual risk. The invisible hand is standing by, in this case in the form of 100,000 available appraisers through the nation. All the lender needs to do is source the talent. If you want lenders to shoulder the risk you simply must become a proponent of winding down the gse’s and fdic insurability aspect of lending. Their loan, their risk. Honk if I’m paying your mortgage, all of that. A simple fact to consider is that in the absence of government, the lender would regulate themselves because there would be no insurability backing to their risk. Waivers are not issues of talent availability, they are efforts to fundamentally change the structure of lending and finally eliminate the most effective check to power of the day, which is independent 1099 appraisers. They’re playing a long game and wise citizens should too. The risk ultimately is the size of the regulatory body. Wind down the gse’s, eliminate standardized fdic insurability, and let lenders for the first time in decades, perform honest unbiased risk analysis about their own money, or their investors, whatever.
Baggs, you are right about risks and who writes the laws.
So, do we all give up? I say NO!
We still have close to 75,000 appraisers in the country. Backing them we have over 25 state coalitions; a national coalition, over a dozen recognized professional peer associations such as ASA and AI and a host of other highly respected professionals groups
We also have access to the support of over 13 million union members, their extended families and retirees through the AGA, #44 OPEIU AFL-CIO. These are taxpayers, consumers and voters. We CAN get and hold Congress attention if we communicate & cooperate with each other on core issues.
Combined we have the numbers to effect meaningful changes. Individually, only a couple can seek special interest carve outs while incurring the wrath of the rest, and some of their own.
There really are fundamental changes that we should all be able to agree on. Im not talking about C&R fees, as important as they are. I referring to fundamental concepts of appraisal and professionalism & REAL ‘public trust.’ Not the subjective lip service kind bureaucrats prefer.
A couple of comparatively simple but significant changes would allow appraisers to reclaim our profession. With some consideration and common sense even non appraisal ‘valuation ESTIMATES’ could be accommodated for lenders that will never cease trying to circumvent appraisal requirements and principles. The primary element of that would be to forbid presenting them as if they are appraisals or ‘just like’ appraisals. They are not.
There are several different ways this can be achieved. All involve revisions that Congress would ‘probably’ have to endorse but in the end the entire system would be stream lined, uniform, focused, and as fair as can be designed. A level and honest playing field.
hint: one part requires TRID to either be eliminated or revised so that price fixing of appraisal fees by loan brokers ceases! We can hand Congress a bipartisan win-win blueprint for the appraisal and collateral risk side of lending; with enhanced, more meaningful consumer protection regarding fees.
They could still have room for the other partisan items they love to bicker over, but at least appraisal would be ‘clean’ and professional again. Like the first few years of USPAP.
The Clarity connection has me wondering. I think there is more to the story.
Many appraisers accept work from appraisal management companies (AMCs). The appraisers doing the work are providing an income that allows these AMCs the ability to finance all of these scams. It gives them the credibility to be given a spot on our state regulatory boards. If you folks would stop working for AMCs they will go away. An AMC cannot manage appraisals without appraisers. This is just too DAMN simple! If you have been paying attention you know that there is a major corporation that now owns a very popular cost reporting service. This service provides cost information for residential as well as commercial. This company has recently purchased a major appraisal education provider. They also now own one of the software and portal companies. Each dollar you spend with companies such as this puts the boot a bit further up your economic ass. WOW, what can be done about all of this??? Look in the mirror and some of you will see who is responsible.
Wayne, you are of course 100% correct. The first issue though is that most appraisers cannot cut loose from AMCs overnight. It unrealistic to think family providers with kids are going to ‘bite the bullet’ until we can change the system or all AMCs die off (only to be replaced by portals; hybrids and PIWs).
As for boycotting those who are trying to destroy us even that’s getting pretty hard. All reading this need to remember the First American folks and CoreLogic used to be the same folks but the feds made them split up. As far as feds are concerned, they already did their bit to prevent monopoly…in their myopic eyes anyway/
First American bought ACI and promoted its own PACE PRO hybrid fraud form.
CoreLogic bought up just about everything else including Mercury(?) appraisal port that used to be alamodes, and they control most commercial data reporting services of public records and a lot of mls with their Matrix system. They ARE a true monopoly but one that is keeping the wheels of congress both greased and insulated so no one notices they control* virtually ALL real estate public records data in America today. (*Sure, we can all still go down to Hall of Records in L.A. or NYC and wait a day to verify sales, as an alternative),
HosueCanary is geared toward more phony forms related business…except they are online, or so Im told.
I have pulled back 99% of all my appraisal work so that I don’t have to use ACI/alamode-CL upload services, (I only deliver reports by pdf and regular email now). In rare cases where I do a UAD to keep in practice the one AMC I use does all the uploading for me. MOST appraisers don’t have the ability to do this-(including the pay cut that results).
There are comparatively few areas in America where you can still go down to the local bank and get hired because you are a local and professional. Very few.
Mike, I understand your points completely. We have discussed a lot of this over the phone in the past. There are some appraisers who work for AMCs and say they have no other choice. It appears that this group will continue down that path until they no longer are needed and residential mortgage appraisal will become a thing of the past. It seems that is the near future.
The U.S. Valuation Fact Sheet as of 12/30/2016 indicated the total number of appraisers to be 73,731. There are 8% of those holding a license, 31% general certification and 61% certified residential. Of the total group there were 76% working in appraisal services with the others being government, lending, AMC, etc. This fact sheet indicated that only 51% of this group was working in residential valuation and that 62% of the total number of appraisers are over 51 years of age.
I am 66 yrs old and hold a general certification. I am very busy doing residential, large acreage tracts and commercial. A bank customer is waiting now for my bid on two oil lube facilities, a car wash, a donut shop and a SFR. I say all of this to just put some of the appraisal industry into perspective. That 62% of appraisers over the age of 51 will make a difference in the dynamics of the appraisal industry. As the AMCs are allowed to destroy the residential appraisal business it appears that the commercial side will thrive.
The same appraisers you say are working for AMCs are the very appraisers who are putting themselves out of business. Those old dudes doing the commercial, litigation, highway rights-of-way, etc. are going to continue after the residential side goes to AVMs and Broker Opinions, etc. It just seems that we should all join together while there may still be a chance to change this.
who are the “we” and how does the “we’” get together. the lenders, lender interest groups and many entities that use appraisal services are well aware that real estate appraisers are a very splintered group of professionals. Just a very long term reality. i wish i had a solutions.
The Liberty Report on YouTube has 5 new shows a week. Tune in or tune out, it’s up to you. You are the silent hand, and so am I. The power of free markets is the solution.
Join the AGA, or your state coalition…or both. We’s a ‘we’!
Actually I agree with you. My understanding the limits of human nature doesn’t mean I don’t agree with you on this.
Its actually MUCH worse than you indicate now with the recent focused effort for “Snidely Whiplash” style small banks trying to capitalize on the myth of appraisal shortage. It appears they are seeking waivers based on purported commercial appraisal shortage in their immediate area or wait times that are longer than they like – not to mention they want fees commensurate with those they had say around 20 years ago… or lower.
Read VaCAPS post on TriStar Bank; view the webcast they included. Then read the next shoe to drop about the bank in Oklahoma.
While they appear to actually be more affected by limited number of general certified appraisers (not a defined shortage by any measure other than their own) there is no evidence their volume of loans will support another commercial appraiser living in their county. I’m still analyzing that one. I’m not convinced that having to get appraisers from nearby Texas or Kansas IS a hardship or unreasonable.
IF they get the waiver, my understanding from hearing the Tennessee Commission discussing their issue, is that it would also apply to residential loans; and that there is zero regulatory authority (in TN anyway) over FIRREA defined “evaluations.” That means all the niceties and checks and balance requirements of those FIRREA defined evals will go right out the window when they start having bankers that don’t know the difference between a real estate agent/ broker or Realtor(r) “validating” market value.
I have hope Mr. park and ASC will be very, very stingy on granting waivers. Just because Guyon, OK is 457+- miles from OK City (where there is no shortage) does not mean they cant find MUCH closer appraisers in Amarillo or even closer cities in KS or TX.
Waivers are the final straw in the loan related appraisers coffins. They will also be the spark that sets in motion the next national real estate financial collapse.
I’m thinking of switching over to a commission based ice cream truck driver-server. Everybody likes them, and they seem to be paid about the same as we used to get.
PS your stats were very revealing. If licensed appraisers are all the way down to 8%, it means all those that didn’t leave are either res or gen certified and or licensed that upgraded to res. certified.
The so called shortage then, is new entrants and lower license, less experience levels (generally), willing to work for peanuts.
I didn’t think we’d drop much below 75,000 this year. Im surprised. At this rate I’m wondering how many will be around in 2019? 65,000?
I wonder if ASC and TAF will announce plans for a new category of recognized ‘valuation’ then. Just above General Certified: “Unlicensed-Unregulated eValuator”…able to appraise anything up to a million. Oil field; agricultural, bowling alley, marina, “no-tell motels”, etc… as long as its in a rural area… or appraisal delays are more than 4 weeks.
I call the bowling alley. For real, and I won’t feel bad about getting free cheese sticks or a free lane for an hour. I’ve got to use it to know if the woods are good, it’s all just part of the job. Pass on the no tell’s though, not sure if I’d be able to measure the actual potential income of the dynamic business uses there… One appraiser in the county does not mean no appraisers available. Someone’s going to break a leg if they keep jumping that far for conclusions.
This is the best resource available that I can find, which details exactly how many FHA approved appraisers reside in a specific location. This is unique because it only returns data for actual resident address of the appraiser, not their ‘coverage area’.
So let me get this straight. The management companies crush the industry, drive half of all appraisers out of business, then that activity is used as an excuse to further drive more appraisers out of business and definitely exclude new candidates.
Rules apply to everyone, the waiver is folly. In Colorado the lenders rang friendly appraisers from out of area whom obtained reciprocity and ran in new areas for premium fees compared to their home location. Truly though such fee increases are not a bonus or premium, the elevated fees simply are correcting long standing imbalance to correct the wage. It’s called a free market.
Raise your hand if you’d be more than happy to run to this location where there is indeed apparently only 1 appraiser and complete reports there for some time. You know how you solve any free market concern for sourcing talent? You pay for it.
Waivers is the trend of the future, so is notable reduction in ml volume. Datamaster, titan, comps sharing, it’s not going to save anyone and appraisers whom outsource the most and foster the least personal talent within themselves by outsourcing will be the first to go. “Financialize the problem.” How do these very lenders hire their talent? Do you think they get waivers for using licensed MB’s, Realtors, CEO’s and all of that? Brokers and agents take note, if waivers are allowed for something ancillary like appraisal, you’re next! All the major tech companies whom service appraisers have hired and paid record setting new amounts for their tech talent.
The only thing to hit the brick wall is an external force which drove a hundred thousand appraisers out of business, stopped the ability for us to train, and continues to do so. The ability to dip into the appraisal fee and skim off the top. The problem and solution in the same note. Remove the negative force and build back the working base. Here is a factoid for you; the guys whom set up evaluation criteria are not constrained by appraisal ethic. The tech guys are not constrained by appraisal ethic. This is moving along exactly as planned; lift the valuation duties away from appraisers and place that in the hands of advocates instead. Are you guys seeing the big picture now?
For what its worth, NAR has been extremely short sighted in their lobbying efforts. THEY and board members realtor(r) and the very model of local mls boards are the next to go. Too many of their members and a lot of competitors have adopted the “let the internet do it” philosophy as a substitute for in person professional representation. Works for some, but not most.
Baggins, yup. everyone has been running the appraisal industry except appraisers. Plus, those appraisers trying to run it, can’t get on the same page, let alone the same meeting room on the same date.
Per Mike and competency response. Thank you.
Well, my strengths as an appraiser rest primarily with manual detailed redundant methods. I simply can not use data type or data import services. Minimum full 1004 time is 10 hours but that’s usually 16+. Datamasters tag line is stop messing with menial data so you can get back to focusing on on what really matters, the value. Pray tell how does one focus more on value if they skip the most meaningful part of analysis which is sorting, parsing, and understanding the ‘menial data’ which credible valuation results are supposed to be based on. The self proclaimed leaders of this industry are obviously focused on leading their tech teams to great success as their first business operational priorities. They’re not actually in the valuation industry, they’re in the tech industry. Same for alamode, mercury, appraisal port, apex, the majority of amc’s, and all of them. They’re not appraisers, realtors, or brokers, so the sooner appraisers get that point these people are merely technical side people and have no business or legitimate claim to be directing licensed appraisers the better. If appraisers accomplish anything other than short term gains and cutting their legs off in the pursuit of outsourcing and fast cash I’d be surprised, give it some time and that’s already happening. I’m an expert anywhere I go, the development methods are always the same, time expense may however be highly varied. If you know the language of real estate, you can talk the language of real estate and therefore should be able to type the language of real estate. It’s the language which makes us professional, not the signature. The notion appraisers should focus less on being competent and be primarily focused on profit is a dangerous advisement propagated by industry tech managers detached from real property practice. You can’t buy competency at a software store. You can’t have meaningful ethical or quality oversight when you outsource your duties away and borrow others work. Appraisers whom failed to learn detailed methods will be the first to go. Scoot out of the way and let OUR tech team handle this instead. It’s a big pie to take, the complete earnings from an entire long established industry.
So nicely said!
Not playing devil’s advocate here, but… Appraisal Waivers are written into the FIRREA law passed and implemented in 1989ish. I have read the passage in the law (but I don’t have the specific reference to it at the moment). The law section on waivers does not specify commercial or residential. It just mentions ‘appraisals’ and ‘appraisers.’ It details why a waiver can be granted. It does not define ‘what’ is to be used in place of an appraisal. From reports elsewhere, this Bank’s application for a waiver is apparently the first time this provision in the law has been used – in the 28 years it’s been legal and available to use. Unfortunately, appraisers are coming unglued despite the waiver procedure being legal per the FIRREA law.
Dave so now your’re a lawyer too?
Well, until only recently nobody was wild and zangy enough to issue billions in loans based on the advisement of their cheetos eating nintendo loving midnight wanking tech crew aka the eval programmers. Boy how times have changed. I would trust wikileaks with my eval long before I’d trust ocwen, I’ll tell you that much.
Dave Section 1113(b) I think but its easy to look up “FIRREA EVALUATION REQUIREMENTS”
It IS a part of FIRREA and when passed it was never envisioned as a way (right after the S&L crisis) as tool to circumvent the protective measures of FIRREA that have been whittled away at for 30 years.
No one imagined the liars, cheats and thieves of the lending industry would make a concerted effort to say “Screw the taxpayer! S&L? Enron? TARP? You aint seen nothing yet!”
The fact it does not specify commercial means they slip a request in pretending its limited commercial instances affected; when they intend to use it for SFR-2-4-apts-and commercial.
Bank security guard today-eValuator tomorrow! No pesky licenses, training OR oversight. YIPPEEEE!
Dave, good point. However, the reason for requesting the waiver is the issue. The reason appears to be to avoid the more legitimate appraisal process by stating there are insufficient number of appraisers to service their appraisal needs. We know that’s not true. The truth is they are seeking to lower costs and reduce appraisal quality, increase loan risk.
Senate Banking Committee introduces repeal of Dodd-Frank Act
The hits just keep on coming. Let’s pop this bubble with something new, waivers and hybrids. If you’re going to go down in flames, do so in style.
“This bill encourages the finance industry to engage in the type of reckless lending that pulled Americans into a Great Recession – just under a decade ago,” Miles said. “Among its many dangerous provisions, the bill enables poor underwriting, risky mortgages, deceptively steering consumers into overpriced loans, surprise homeowner costs that make defaults more likely and appraisal abuses.”
Ta-Da !! Lessons never learned. What do they care when the industry arses are not effected.
1. Thank you VaCAP for the link. I urge ALL appraisers to listen to it. Relevant part is only 20 minutes long.
2. Tennessee Commission Opposed the waiver and noted its an invitation to commit fraud; rural appraisals are far more complex than urban area appraisals due to limited data. Not the type of complex properties that should be getting LESS expertise rather than more. They also point out (by provision of real numbers) that claim is not as factual as presented. (My words-not theirs). I was thoroughly impressed by the Commission in terms of discussion. One member seemed borderline ‘ready’ to rationalize the banks position but only very tentatively and not with any serious opposition to the rest of the Commission.
3. Tennessee Commission noted they have NO AUTHORITY to regulate evaluations whether signed by licensed appraisers or not. Oddly I cant find a definition for Evaluations in their site; I assume they mean the federal guidelines. All should look those up. THAT IS THE REAL CULPRIT, and threat to appraisers & appraisal integrity to day! I wonder how man other variants we have in states perception of their authority to regulate evaluations, or not. How do you regulates something that has no standards, anyway?
Way to go Tennessee !
I appraise in rural Georgia and there is no such thing as “big data”.
The only adjustments I now make are for site value and living area.
Nothing else can be defended. Everything else just gets ignored with a big 0 In the adjustment line.
Hi, I have a commercial gas station out in Boron California. It’s “Off” the freeway a bit, and also has a restaurant, mini mart, overnight paved truck parking area but no showers. It sits on 320 acres of typical desert land, more or less flat except for run off culverts and erosion related ditches. I also park impounded cars for the Highway Patrol there along with wrecked and abandoned cars. I’m not sure whats it worth but it HAS to be in the tens of millions based on what I’ve seen in Ocatillo, San Diego and Tuscon Az. There’s no other comparables unless you go to San Diego on west or Arizona on east. I only need to borrow $350,000 to upgrade the vapor recovery equipment on it, and don’t want to spend $5,000 on an appraisal. Um. can you make that an even $398,000? I may want to paint rocks to look like grass.” No problem Mikey, we’ll have our AMC “Evaluations n Fraud R Us” run the comps and our senior executive in charge of pensions and planning evaluate it. We’ll have an answer for you by the end of the week.” Borat would be so excited about such a country!
I’ll do it for $250 as long as you send me a background check, copies of your concealed carry permit, drivers license, credit card number and pictures of your wife & kids.
Let me switch gears for a minute. Today I read about more millions upon hundreds of millions of penalties still ongoing for Ocwen. Time to get out your crystal balls and betting wagers. Do you think Ocwen will pursue waivers and seek aggressive expansion of eval sub programs? What about Wells?
I think focus should be on something less obvious from our side of the desk. Will the use of evals shield these companies from this kind of litigation and record setting liability and legal penalties? Is there a correlation for existing mortgage process abuse penalties that already ties to waivers and sub programs? I can’t help but think there is a bigger play here and the little guys are tasked with testing the water first.
Reasonable suspicion but since the failure will take at least three years to get noticed after they start, its not likely littles are a test case.
I think it is plain old fashioned chutzpah! Hank Paulson got away with orchestrating what was (up til then) the greatest theft of taxpayer funds in history. They see it as a challenge! How much can we get?