“Public Trust Betrayed”
Congresswoman Jackie Speier letter to author of “Public Trust Betrayed”
James E. Manning, author of “Public Trust Betrayed”, an appraiser in California who began his career in 1973, received a letter from Congresswoman Jackie Speier in response to his book and the state of the appraisal industry:
December 30, 2011 – Mr. James Manning
Dear Mr. Manning:
Earlier this year you offered me a copy of your book, Public Trust Betrayed. After some delay, I have finally had an opportunity to briefly review it.
I agree with many of your conclusions. For example, you indicate that existing laws created after the savings and loan debacle were not enforced. I agree, and the State of California and federal regulators bear much of the blame for creating this recent real estate bubble and bust.
In addition, you indicated that the creation of third parties to buy appraisal services has driven down fees by 50% after they were already flat for a decade. Clearly, it is difficult to keep a well-informed appraisal force in the field if wages and working conditions deteriorate so significantly over a brief period of time. The reforms that we did in Congress in recent years resulted in the creation of appraisal management companies. I concur that this has had a bad impact on valuations as less experienced appraisers do more and more of the work. I’ve had this happen in my own transactions, as have my friends.
In the end, the most likely way in which the real estate industry will recover in a sustainable rather than speculative manner is through job growth based upon increased infrastructure spending by government, increased investment by businesses, and increased consumer spending. The job growth that this creates will help to stabilize the housing market. What’s the likelihood of this happening? I don’t know. What I do know is that the protracted fights in Congress over the debt ceiling and the federal budget create uncertainty, and that many investors and consumers decide not to open their wallets in that climate.
In response to your book’s implicit message that we haven’t completed the job of cleaning up the financial system, I will think about the role of appraisers and determine if legislation or further inquiry would be helpful. I also strongly advise you to speak to your state legislators. The most immediate impact on appraisers and the real estate industry can be made by regulators enforcing existing laws that require genuine knowledge of a market, for example, before an opinion is offered by an appraiser. There are not enough federal “cops on the beat” for this type of day-to-day problem, except after the financial autopsy of Wachovia or Washington Mutual is ordered by a receiver. A state legislator, however, can hold a hearing and learn if these laws are being enforced, and take relatively quick action to overcome problems.
Thank you again for your book and for the opportunity to reconsider this subject.
All the best,
Member of Congress
About the book “Public Trust Betrayed”: The independent real estate appraiser is being driven out of the business by the same forces that borrowed billions from the taxpayer in the form of a bailout, speculated in an over-leveraged derivatives market, and swallowed each other up after years of mismanagement.
Why should anybody care? Because the housing recovery is dependent on transparency that we have not seen in more than a decade.
The Truth Behind the Real Estate Appraisal Industry emphasizes that there must be transparency and objectivity in the mortgage and evaluation process if we are to solve the current credit crisis and what we must change in the financial industry to prevent another economic meltdown. As a result of fraud, conflicts of interest, over-valuations, and lax underwriting standards, the entire lending industry must be examined and changed if any meaningful housing recovery is to be accomplished.
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If this book is factual it will be a real shocker to the public.
THIS IS A STORY THE MEDIA REFUSES TO COVER! Trust me I’ve spent nearly 3 years speaking with them.
If the banking lobby does not shut down distribution of the publication it will be the great thing that’s happened to assist appraisers in telling their story.
Fines based on income. Nobody is going to get in trouble, because they have noble status and will buy their way out of it via lawyers.