Appraisal Waiver Questioned by Legislators

Appraisal Waiver Questioned by Legislators- Asking ASC for JustificationLate Friday afternoon, VaCAP learned the Financial Services Committee Chairwomen. Maxine Waters and Senator Sherrod Brown, Ranking Member of the Senate Committee on Banking Housing and Urban Affairs, sent a letter to the Appraisal Subcommittee Chairman Arthur Lindo inquiring around the circumstances of the North Dakota Appraisal Waiver that was granted a few months back. The exact verbiage used in the letter to describe the waiver was “unprecedented with minimal justification.” This speaks volumes as to their concern.

Congress has repeatedly recognized the essential role that appraisals play in both safety and soundness and consumer protection. That is why it is so concerning that the ASC, the primary federal organization with oversight over appraisal and appraiser standards, has acted to waive appraiser certification requirements with minimal justification.

VaCAP leaders did not have time to analyze the situation on Friday but recognized the importance of sharing this information with our members and immediately sent the press release to our members. See the press release here.

Over the weekend, this news has been shared on social media. Not just by VaCAP, but by many other organizations and appraisers as well. We are happy to see appraisers comment and supportive, but not all the comments were supportive.

While we respect everyone has their own opinions and we would never think less of anyone that has a different opinion, there are appraisers that have criticized the letter and have blamed it on a political agenda by the Democratic Party. It is hard to believe that some in this profession have such a narrow view. Appraisers analyze facts. Is this not what we do to support our families?

VaCAP could care less if you are Republican, Democratic, Socialist, Independent or believe Mickey and Minnie Mouse are the best to lead our country. When anyone, regardless of political affiliation, committee, race, religion, etc., is supportive of our profession we should be supportive and appreciative. Public trust is why appraisers are licensed. Public trust is why FIRREA was passed; Public trust is embedded into our standards.

Not only is the North Dakota Waiver a public trust issue, it is an appraisal profession issue as well. If no appraisers are utilized in North Dakota, what will become of our North Dakota colleagues? What happens if a waiver is granted to another state? Then what?

Rather than criticize those that are trying to help and protect our profession, we should take advantage of the attention on our profession. We have so much more we can share with Chairwoman Waters and Senator Sherrod. Would you agree?

We should start with appraisal waivers being granted by Fannie and Freddie. Are they not harmful to the public, the housing market, the economy the appraisal profession?

What about bifurcation? Are these products not harmful to the public, the housing market, the economy, the appraisal profession? Shouldn’t Mark Calabria, Director of FHFA receive a similar letter as Arthur Lindo asking for justification of bad acts?

Then there is the raising of the de minimis to $400,000. Customary and Reasonable fees. AMC abuses. Are these topics not important to appraisers and harmful to the public?

Every appraiser needs to stop what they are doing and contact Chairwoman Waters and Senator Sherrod Brown and express your concerns on these other harmful actions.

We have their attention. Now is the time for action!

House Financial Services Committee:

Contact Chairwoman Maxine Waters, Virginia Representative Jennifer Wexton and/or Denver Riggleman.

Senate Committee on Banking Housing and Urban Affairs:

Contact Senator Sherrod Brown and Virginia Representative Senator Mark Warner.

VaCAP Board
Image credit flickr - Friends of the Earth Europe
VaCAP Board

VaCAP Board

Coalition of individual appraisers working together to unite, promote and protect the collective interests of all appraisal professionals in Virginia; to promote needed changes in laws, rules, regulations, policies and standards affecting all appraisers in Virginia; to observe and report the actions of regulatory, legislative, oversight, and standards-setting entities of the Commonwealth.

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8 Responses

  1. Avatar CJK says:

    Now they need to go after FNMA and its use of appraisal waivers, and desktop “appraisals.”

    Can out of state appraisers join VaCAP? They seem to know what is going on long before others. If so, would the membership be as an appraiser or as a supporter?

  2. Avatar Pat Turner says:

    You can join as an appraiser.
    $84 per year!

  3. Avatar David says:

    Good Afternoon, I wanted to let you know that I support your attention to the importance of the appraisal to the financial markets. I think you are spot on with concern. I would also remind you in the strongest terms that it is because of the licensed appraisers (and only the appraisers) that mortgage paper enjoys liquidity world wide performing as collateral verification. To my knowledge there are no other documents relating to the soundness of the AASET in the portfolio. If we step back and look at the big picture; once a proper documented appraisal is prepared, the asset (the paper) can be sold, traded or in some cases redeemed world wide. That equal liquidity and market stability. We are the only independent eyes in the field. Parenthetically, home inspections never make it into the system as they are paid for by the buyer and never shared. Best of luck with all of our support!! David Buckley Certified General Appraiser 080 0000069

  4. Avatar Advocate says:

    Another piece of good advice on AppraisersBlogs!

  5. Baggins Baggins says:

    Defaulted loan modification statistics are on the rise. So is re defaulted, re-re defaulted, and re-re-re defaulted loan modifications. Yes, it’s true. One then wonders if loan modifications are subject to full appraisals or if they too are lined up for waiver allowances. Might have a direct tie in to waivers. Please inform if you know.

    Honk if I’m paying your mortgage, AGAIN.

  6. VaCAP has put out a call to action to all of us on this. AGA concurs.

    1. We need to ask that the committee recommend recissionof the waiver, and adopt a policy or more stringent oversight. A mer shortage allegation is not enough. Before a waiver is issued, a survey of ALL ND appraisers and out of state appraisers licensed in ND be taken that: (A) Reports their typical turn around time for typical rural assignments, and (B) what their reasonable & customary fee RANGE is for such work. It is not enough to claim too fee appraisers generally overall when the truth is that the only shortage is among appraisers willing to work for substandard fees that fail to meet Reasonable and Customary fees mandated under Dodd-Frank.

    PIWs include (as a first step) AVM valuation in some form. AVMs aside from being unreliable, erratic and usually incorrect also rely on demographic information (several have bragged about this). That means racial, ethnic, national origin, age, sex, marital status and sexual preferences as reported to the U.S. Census Bureau ARE built into their algorithms. Virtually ALL of the prohibited considerations under ECOA & ERA are inherent within these AVMs!

    AVMs are incapable (by design) of distinguishing between market value (a requirement for all GSEs) and investment value; distress value, refinances using grant deeds, estate value, discounted value, bulk sale values. This alone should disqualify them. Appraisers are cited if we fail to define & support a specific type of value.

    AVMs rely on carelessly aggregated information that does not undergo any form of the professional appraiser verification process. Values per SF are reported which is incorrect more often than not; lot size data is often if not most usually incorrect as stated versus what is shown on plat maps. AVMs use the stated totals either as a 2 digit percentage of acreage or two side calculations assuming rectangular shapes.

    When writing to Congressional committees, stress the risk to (1) taxpayers; (2) consumers, and (3) voters. Also point out that hundreds of jobs in ND are being put in jeopardy as insufficient work remains after waivers to continue to support appraisers, and nationally as this trend is sought in each state in series, virtually tens of thousands of appraiser jobs are at risk.

    Ask yourself, WHY do the Governor of ND and banking lobbies there want to remove the consumers final protection against inflated prices; fraudulently structured deals, and inherent property defects that sound appraisals turn up.

    They cite an oil boom driven housing economy boost. Why would they not want to protect out of area buyers unfamiliar with ND property rights, processes, and prices? Why would they recklessly expose both sellers ad agents to buyer recourse and possible contract recissions over-inflated pricing?

    Check the VaCAP site and send letters to BOTH Member Waters and Senator Brown. CC Mr. Lindo of ASC.

    Make no mistake, this was not an ASC driven waiver. It was declined the first time and then the ND Governor played politics to get it granted the second time.

  7. Avatar Michael says:

    The profession is being destroyed. Let’s start with the The 1004P bifurcation appraisal, it is just another way for an AMC to make more money off of us. They pay a smaller fee to a non appraiser, and rip the appraiser off by marking the product down. The problem with these are part of the data collection is actually driving to and from the property. Seeing a new road being cleared, a new mall opening up, or seeing which houses are still standing after a hurricane are critical components, that an appraiser has to have. The 3rd party inspection is incapable of properly providing this critical data. Hence there is a critical data component risk to these things. They are not efficient, and should be eliminated. The only reason for these things is to lower amc expenses. They are simply trying to rip appraisers off.

    Second, lawmakers are being lobbied by financial institutions. Again, the finance companies want to make more profit by eliminating the appraiser. In addition they don’t care about the asset and want to get the loan through. Welcome back melt down…tick tock. These liars are on tv and they say they want American jobs back, however they are really wiping out the Appraisal industry.

    Dodd Frank is causing me to file Bankruptcy. The AMC pushes for that appraisal tomorrow, yet payment comes 30, 60, maybe 90 days. Who knows when your 12,000 in receivables will be coming. Or you can take the low fee for the amc that pays within the week.

    Here my solution, drop the active listing stuff on the sales grid. Drop the comparable sales trend, and using a statistical larger market value trend using data software. Consider dropping the requirement for driving by the comparable pictures ( I know this is controversial, however the idiotic 1004p allows it). Stop with the subject contract analysis. Let’s be honest, it’s a lenders sneaky way of influencing a subconscious target value. Consider using a value range based on comp selection as opposed to one single value. That would allow the risk manager or underwriter to decide if the asset is worth lending on, and it would potentially stop the old the value is off by $1000 and is killing the deal. Maybe we could shrink down the line adjustments to Location, condition, view, gla, basement or none, garage, pool or none. Stop with the bathroom bedroom count stuff, and lean on GLA.

    I say, let’s go back to collect at the door. Get rid of the AMC, let me purchase and run the Fannie Checks on my own appraisals. Let’s me have my clients back. Get rid of the active listing crap, revise the report form and make it more efficient. Dodd Frank did nothing but destroy my cash flows, and force me to split my hard work with an AMC! Hey lenders, if you want to speed the appraisals up, and keep a reliable asset valuation in place, let’s try it my way!

    • Baggins Baggins says:

      Recipes for over valuation. When home owners are trained to know that their additional tens of thousands of dollars worth of quality upgrades mean nothing in the value analysis, and their home is worth so much simply on the basis of size, they turn and game the system.

      Solutions to these issues require more effort, not less. Stop thinking like a lender, they want cheaper faster.

      Quality and responsible appraisers want more thorough, more reliable data, more time to complete the job, and better compensation for having performed such an important task so diligently and thoroughly.

      And most of all we want know nothing non licensed inadequately qualified people to get out of the order assignment and panel management positions. Did I tell you the story of the one manager whom was a barista at starbucks? How about the lady who bounced from a band lead singer directly to the panel manager? I also have amazing stories of the blue haired girl from tsi and her bass pumping speed racing co worker, the list is basically endless.


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Appraisal Waiver Questioned by Legislators

by VaCAP Board time to read: 2 min