Imagine Running the Lawn Mower Industry Like the Appraisal Industry
I’m on about lawn mowing lately. It’s my new full time passion. The appraisal industry should be as straight forward as lawn mowing, but due to the special interests pressures within the value industry, it has become convoluted and dysfunctional.
Can you imagine if they ran the lawn mower industry like they try to run the appraisal industry? Like, we don’t care if that lawn is on slope or not, you can only use this mower and you’re not allowed to be versatile and use anything else. And you can’t request the lawn mowing servicer you want to use, you have to use the lowest bidder lawn mowing company ordered from our lawn mowing management company, who outsources that task again, and you still pay full fee for that discounted lawn mowing service. Then, when the mowing crew comes over they’re not allowed to talk to you about your own lawn.
Lots of people know who I am on these boards. Just not those people who would buck up to personal attacks because of disagreement. And we’ve all seen how vindictive the AMC industry can be; Coester did hack Skapinetz accounts, Pam Crowley did get death threats, and other appraisers within the past few months are dealing with similar nightmares all over again. We all observed those long, long blacklists and do not use lists, with associated articles back in the day, lenders knew was illegal and tried to keep secret. It’s an open secret now with tech companies, they can just add you to that list via the tech relay company and nobody on the appraisal side ever knows. The blacklist approach is alive and well. It evolved into new less transparent forms via tech integration.
That’s why I use a pen name. It’s not to conceal my identity from my colleagues but rather the industry at large. I’m a vocal spokesperson for consumer safety and fair dealings. I’m not all knowing and I learn so much here, as well as freely share what I know about valuation services in the hopes of a better future for this flailing valuation services industry.
I do care about my career and other appraisers’ careers in this industry I’ve resided for 20 years. I care about regular citizens, and consumer protection is also one of my passions. I learned a long time ago how rife real estate is with pitfalls and hazards, and how difficult it may be for people to manage. With increasing automation, sometimes the appraiser is the only human being a home borrower sees in person, before that day of closing. Which is why it is also essential that only licensed appraisers be presented in front of home borrowers, otherwise they could get run down the rails without any actually effective safeguards. Fannie Mae can’t control the inevitable volume of hucksters participating in the lending and technical services community. That is an impossible expectation. So I argue against third party inspectors, increased automation, and outsourced services too.
The market crashed immediately after I upgraded to certified, and I spent the next 5 years doing nothing but default management. It’s great work which builds a lot of skills, once one learns to deal with the fact every defaulted home comes with broken dreams and financial ruin. I like to think my occasional informational relay during conversations with people about what can happen and how even those minor things can lead to structural or economic disasters and such, has helped people along the way.
It’s saddening and interesting, to see what people leave behind. The hardest one I ever dealt with was what I called the broken house heart. All the photos, apologies written on letters posted on the wall, a family disrupted through tragedy. That one was tough. But others were easier to manage. People simply did not pay their bills and got repossessed, hoarders let pets ruin properties, DIY hot tubs right there in the middle of the living room, mold, dangerous electric, surprisingly rather common.
Thankfully the 50 state AG effort to reign in default managers like Ocwen did bring about many industry corrections, and billions in fines. We’re setting up to a similar event right now with these reckless new policies and proposals being thrust upon the valuation industry. Appraisers should seriously consider why the valuation services industry is being guided and formed by everyone except appraisers, and why our requests and objections are consistently ignored. This speaks volumes regarding the actual state of consumer protection.
Now it’s time to reign in the destructive force which is AMCs, AVMs, and their tech company partners from destroying what’s left of this industry right as we have a real chance to finally save it. Without the independent checks and balances, there will be no real consumer protection. You can equate these ideals to fighting the man or being paranoid or whatever makes you feel good about it. It’s not over yet, not while I am gripping this cold steel handle of this high powered lawn mower.
Just imagine running any industry like they try to run the appraisal industry. No other industry would allow this to happen.
Thanks for the article BG! You covered everything that is wrong with our profession!
We have discussed this continuously for years. I just read a very long article put out by Mortgage Industry Daily that included extensive information on all of the items you mentioned. The tech is in place to dismiss appraisals on refinance and cash out refinance transactions as well. Like you BG, I have been at this for a very long time. In 1997 a close friend and bank owner came back from a New York convention and told me to aggressively look for another professions because “they want to get rid of you”. Patient group but still working methodically to get it done. As I have stated many times – we are our own worst enemies. We have no collective voice. The AMCs were wise enough early on to form a group (or 2) that spread some dough around and get things to go their way. The beauty of that for them is it was the industry’s goal all along. They will just transition into the companies that are utilized to order the interior photos, floorplans and condition reports as we Appraisers sit and watch. Do you have a bagger on that mower?
Well said. Bravo Sir. On that note.. This morning I attended the GA state appraisal board hearing on the proposed rule to eliminate the C&R fee law they have in place, you know the one that is similar to the one in Dodd-Frank.
The Ga board apparently is being investigated by the FTC for their law. They thought that the FTC vs La case was a ruling in favor of the FTC when in fact it was not and wanted to avoid any sort of notion they were price fixing or anti trust.
The Board received letters from appraisers and some others in the 30 day time frame and yet here I was at the board meeting the ONLY appraiser to show up and speak up about it.
The board president made a simple statement to start which altered my initial comment. He stated the state board was here to protect the public and not the appraisers. They are here to license and regulate appraisers. Very true.
So I processed to get my opportunity to speak and made it clear that removing this law completely would do more damage to the public but appraisers as well and the state How so? Well if AMCs have no state rule as far as C&R goes they would resort back to pre Dodd Frank days and be able to pay whatever they wanted, even lesser than they do now which would most likely result in appraisers to stop working with AMCs and create that false narrative of a shortage. It would harm the public as there may be less appraisers for lender work, faster and cheaper appraisers doing less quality work to make up for the lack of good fees thus leaving the public with more garbage valuations. It would harm the public because now we would be back to the narrative that we need more AVMS, hybrids, desktops and cheaper valuations to make up for the lack of appraisers willing to work for Pennies on the dollar.
I stressed to them that they shouldn’t be bullied by the FTC, that they need to talk with other agencies, the LA attorneys to understand what went on in the case, and many others before making such a radical decision and seek alternatives. Maybe it’s a simple rewriting of it. Maybe there is nothing wrong with it period.
I spoke about many other things as well in my time allotted to me from bid requests, trainees, AMCs leaving appraisers unpaid, and how allowing AMCs to charge borrowers a certain amount and pay themselves more than the appraiser or seek out the cheapest is not protecting the public.
At the end, the board president stated that he was prepared to make a motion to adopt the rule change and drop the law, however after hearing me speak not only as a certified appraiser and president of the AGA, along with some letters sent, they unanimously voted to table the proposed rule change and seek further advise, information and do more research before proceeding any further.
While not a gigantic win, it’s a win none the less and I applaud those who took to time to write letters. I just wish more appraisers would have m to the meeting to speak up in person.
Thanks Mark. Your time and effort made a difference!
Thank you Mark. While I was not there but should have been, I am a member of the AGA. We need a collective voice; all appraisers should join.
(Click first link in article for additional article data.)
(Still happening today, the amc industry was supposed to correct that. Instead the amc trade groups are up there pandering to legislative bodies to codify overvaluation process into law with pave and fair, TAF is asleep at the wheel. The amc industries adoption had absolutely nothing to do with automating appraisers out of existence or increasing efficiency for lenders. Amc industries actions over the last decade have been a classic special interest bait and switch.)
That last link alone led to 155 pages of such accounts, whom knows how many are actually archived.
The numbers run large, the stakes very high. Just wait till the losses pile up, it’s going to be a rinse and repeat event. And this is why I constantly say; “Missing the IVPI Proposal yet?”
Well done. That is a HUGE problem with our profession, the majority are silent, and expect everyone else to do their bidding. (Imagine if 100 appraisers showed up and gave similar statements as you, that would have gone way father in our favor). Thank you for speaking up for all Real Estate Appraisers.
The Appraisal Institute is supposed to be a voice for the appraisal profession. I do not follow closely what AI does on the political level, so maybe they are making positive efforts. I just have not heard much of anything except possibly the current floorplan issue/cases. Are any readers of this blog aware of their efforts, if any, or are they generally falling in line with the destructors of appraising?
They pretend to be involved. They are not effective (AI member here, unfortunately). They write ineffective letters. Show up at hearings and nod and throw us under the bus. They are useless.
Thanks to all who put in the time to educate anyone who will listen. It is like talking to a brick wall but we have to keep trying. They have abused our Independence against us since the beginning. Peace
Great article. Another way they “shadow blacklist” is to keep you on the list but remove all coverage area or one technical bit of info from your profile so you don’t show up in any searches and they never end up assigning you anything. Then they haven’t technically “removed” you, but you are never going to get any work from them ever either. It’s a little end-around the clever ones use to play this game.
Are you a Union organizer? In Fifty years of independent appraising, independence meant reliance to a client and a contract.
Building a reputation which would protect the public is contradictory and would continue public ignorance.
The “broken house heart” a foreclosure is a necessary part of society to carry on financially. Our society can’t continue by irresponsibly supporting individual responsibility.
Charity is a necessity for the building of a continually prospering society. When we measure ourselves privately, we shall include our charities and rejoice, not bitch.
It’s just a comment on the inherent challenges of the job right?
Found this, kind of related. On the concept of protecting the public trust.
Building reliance for clients does not impugn public trust, it enforces it.
Appraisers SHOULD work toward a “Brand” but we don’t have to be salty like “CAMPBELS SOUP”
The industry started going downhill in the 80s