Good Old Days of Appraising!
Missing the Good Old Days
Does anybody miss the good old days of having to deal with the mortgage broker? After spending about 53 minutes on the phone with an appraisal management company, who will remain nameless, I am almost missing the good old days myself.
I originally called, because the appraisal management company called to see if I would take a forensic retrospective review for a new client they just acquired. This of course is a Fannie Mae client, and any of us who have dealt with Fannie we know there is a specific format, guideline and style in which they want their reviews worded.
Despite my better judgment I agreed to take the assignment. Having worked in the fraud investigation department for Fannie Mae for the better part of eighteen months, and having had more than twenty years in experience in residential review I felt adequately up to the challenge.
The problem I encountered was that the property was a hypothetical appraisal. That is to say the report was conducted on 5 acres out of 214 acres. The property was never taxed separately and never subdivided. This lack of subdivision makes the appraisal hypothetical and the property was ineligible for residential lending standards.
I called the appraisal management company to let them know of my findings and asked to speak to their chief appraiser. This is where it got interesting. After several minutes of hesitation and asking questions why I could not just give them a value on the 214 acre farm in Ellis County, Texas, I was finally given the phone number for “one of their appraisers”. It turned out this appraiser was an independent fee appraiser like myself, working in Michigan. He was of course very nice and professional but what bothers me is working for an appraisal management company who has no appraisers in the company structure.
Once upon a time, my father told me the appraisal industry was “going to hell” because it was filling up with women and children. Of course this was a tongue in cheek comment, because I was working for him the “children” as was his wife the “women”. But I can only imagine what he would have to say about the appraisal management company that has no appraisers and has no idea why it is a problem to review a hypothetical appraisal for residential lending purposes.
By John Reynolds aka UncleZev ~ Source Appraisers Speak Out
A few months ago, I completed an REO for Fannie. The AMC closed it’s doors and left my completed appraisal sitting in the portal cloud. Shortly thereafter, the AMC announced their bankruptcy, so I’ll never see that fee.
Consider this, if Fannie can’t properly vet an AMC how are banks and regulators supposed to know what’s going on inside those cubicles?
Just sayin’….. 🙂
Your fee may be stuck in the cloud as well but you can always go after the CEO. I once made a trip to Florida to visit a scumbag AMC owner that refused to pay our fee. For some reason skeezebags respect for a Louisville Slugger more than an attorney’s phone call. That trip was well worth the money. It also had the added benefit of convincing me to leave the rat turd business of appraising to folks to people who are willing to work for chump change.
I highly recommend the Louisville Slugger for any appraiser that is insane enough to stay in the business. Far cheaper than a lawyer and I most cases you never have to ask for your money. They’ll know why you’re there.
I’m 8 years late reading this. That can’t be a true story… Is it?
John, “I feel your pain…”
A HUGE part of the problem is that both FNMA and larger banks, like to deal with so called “National AMCs”, which means they prefer to deal with a very large company with almost zero understanding of real estate, real estate appraisal or FNMA policies at the operational or ordering levels. These companies in turn claim ‘huge networks’ of appraisers across the country, when in fact, they have comparatively few.
The real question to me is how one of these idiotic 5 acre carve outs was ordered in the first place. The AMC should have quashed this one as soon as the order came in. “Please provide the exact legal description of the property you want appraised.”
It amazes me that there are still lenders or AMCs out there that encourage appraisers to violate USPAP.
Why does that amaze you? They are not responsible if something happens. The appraiser is.