Look in the Mirror

Look in the Mirror. 

The phrase “take a look in the mirror” is a common idiom used to encourage self-reflection and introspection. It is a powerful statement that can evoke a range of emotions and reactions from individuals, from contemplation to defensiveness.

At its core, the phrase is a call to examine oneself honestly and objectively. It asks us to step back from our assumptions, biases, and preconceptions and consider our behavior, choices, and beliefs in a critical light. When we take a look in the mirror, we are forced to confront our flaws and shortcomings, but also to recognize our strengths and achievements.

One of the most challenging aspects of self-reflection is accepting our imperfections. We often have a difficult time admitting when we are wrong, or when we have made mistakes. However, self-awareness is a key component of personal growth and development, and taking a look in the mirror can help us to identify areas where we need to improve.

By looking at ourselves honestly, we can learn to recognize and address negative patterns of behavior. For example, if we have a tendency to be overly critical or defensive, we may find that by taking a step back and examining our behavior, we can learn to be more accepting and open-minded. Similarly, if we struggle with anxiety or depression, self-reflection can help us to identify triggers and develop coping strategies.

Ultimately, taking a look in the mirror is about being honest with ourselves, both about our shortcomings and our strengths. It is about recognizing our humanity and accepting ourselves for who we are. By embracing self-reflection, we can become more self-aware, more compassionate, and more resilient in the face of life’s challenges.

When it comes to the Appraisal profession, there are so many that need to take a deep, hard, long look into that mirror and do some self reflecting, before they do things that will ultimately destroy the public trust. In this blog, we are going to take a look at the narrative of bias in the appraisal profession and entities that need to step back, look in the mirror, and decide if they really are being honest.

This multi series blog is not going to go over the narrative that is being pushed, but rather the ones that need to look in the mirror and why they need to.

Lets start with the obvious one here for the first installment. Government.

In 2009, the Government, with the help from then Attorney General Andrew Cuomo, came up a new law solely based upon the poor practices of Cuomo. The Home Valuation Code of Conduct (HVCC) was a set of guidelines and standards. Its purpose was to improve the accuracy and transparency of home appraisals, which had been a major issue during the subprime mortgage crisis.

The HVCC set forth rules and procedures that appraisers and lenders were required to follow in order to ensure that home valuations were based on objective and reliable information.

In 2010, the HVCC was replaced by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which established new rules and standards for home appraisals. These rules included the establishment of the Appraisal Subcommittee, which oversees the appraisal process and enforces compliance with the new regulations.

Today, the appraisal process is governed by a number of federal and state regulations and guidelines, including those established by the Appraisal Subcommittee and other regulatory bodies. These rules and guidelines help to ensure that appraisals are accurate, objective, and reliable, and that borrowers have access to all the relevant information they need to make informed decisions about their home purchase or refinance.

So why would the government need to look in the mirror?

To start with, they created this mess. The laws and regulations they put into effect have had incredible negative effects on the appraisal profession. To start with, they truly believed that appraisers were responsible for the housing crash. To go even further, the government doesn’t listen to the actual people who they are now seeking to destroy, but rather other entities that are out there seeking financial and global gain. They then decided to put Appraisal Management companies in the mix which created even more issues.

Appraisal management companies (AMCs) have become an main part of the real estate industry since 2009. These companies are hired by lenders to oversee and manage the appraisal process for real estate transactions. While the primary goal of AMCs was to manage the ordering process, hire appraisers and provide quality control services, there are some negative effects associated with the use of these companies which we will discuss below. These issues are a direct result of the government protecting their own, rather than protecting the public trust.

  1. Lower Quality Appraisals

One of the most significant negative effects of AMCs is the potential for lower quality appraisals. AMCs often contract with appraisers who are willing to work for lower fees, which can lead to a lower quality of work. In addition, because AMCs are focused on speed and efficiency, appraisers may feel pressure to complete appraisals quickly, which can result in a less thorough analysis of the property’s value. Many AMCs will bid out orders searching for the cheapest and fastest rather then the most qualified appraiser within the area.

  1. Higher Costs

While AMCs are intended to reduce costs for lenders, they often result in higher costs for consumers. AMCs charge fees to lenders for their services, and these fees are often passed on to the borrower in the form of higher appraisal fees. In addition, because AMCs often seek out appraisers who are willing to work for lower fees, they may not attract the most experienced or qualified appraisers, which can lead to the issues of bias or actually incompetence.

  1. Delayed Appraisals

AMCs often operate on tight schedules, which can lead to delays in the appraisal process. Appraisers may be assigned to properties outside of their normal service areas, which can result in longer travel times and delays in scheduling appointments. In addition, because AMCs are focused on speed and efficiency, they may not be getting once again the most experienced appraiser in the area. Another aspect is that many AMCs will bid these orders out and until they actually get an appraiser who will do the job for a fee that allows them the AMC to make money, the assignment of the job can be delayed.

  1. Lack of Communication

Because AMCs are a middleman between lenders and appraisers, there can be a lack of communication between the two parties. This can lead to misunderstandings about the scope of the appraisal, the timeline for completion, and other important details. On top of this, many AMCs outsource their quality control overseas to others who review an appraisal via a checklist. These appraisal aren’t being reviewed by qualified licensed appraisers, but rather by someone who is being paid pennies to mark off items on a checklist.

  1. Pressures.

I have talked about pressures before. HVCC and others who developed it made it clear that lenders were pressuring appraisers to make values and inflate them. While there may have been some bad apples that did this, it wasn’t as common as you may think. However, in establishing the AMCs as a middle man they created a new pressure. Pressure from AMCs to have appraisers do what they wanted and needed in order for them to keep their clients. AMCs need volume in order to survive. The more orders they get, the more money they make, by charging the borrower more, and paying the appraiser less. This gave the AMCs power to tell appraisers, “Do what we say or you won’t get orders.” AMCs made it so that appraisers HAD to accept less money, do the revisions they wanted to make their clients happy, or get a scorecard that showed they didn’t deserve more work. So you went from lenders pressuring appraisers, to AMCs doing it. Well done.

Now I could go deeper into all of this, and give more specific examples. However I will leave that for another time. As you can see here, the ones in charge are the ones that need to take a deep look in the mirror. While they will keep on with their narrative of “we truly care” they actually could care less. They only care about themselves, being re-elected and trying to make themselves look good. They continue to push the narratives, not listen to the ones that really matter, and make decisions based off poor data and emotions.

In the end, it’s the people who continue to speak inaccuracies, HUD (created redlining), The Appraisal Foundation, The ASC, The Appraisal Institute, National Association of Realtors (more redlining), the Brookings institute, and so many more large groups trying to save face, rather than look in the mirror and admit to past mistakes, that have them blaming real estate appraisers for the issues of today.

Part 2 is up next and will come out shortly.

Mark Skapinetz
Latest posts by Mark Skapinetz (see all)
Mark Skapinetz

Mark Skapinetz

Mark Skapinetz is a Real Estate Appraiser in Marietta GA with extensive knowledge in Residential Appraising.  He is President for the American Guild of Appraisers (AGA). Featured on Podcasts as well as published interviews in Valuation Review. He is the creator of the 100% Real Estate Appraiser Group, Skap The Appraiser and co-creator of Appraisal Forum & Festival (AppraiserFest).

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15 Responses

  1. I agree for the most part. The HVCC was Pushed by Cuomo and his buddies after he threatened to sue Fannie Mae. BTW he was the “Attorney General” of New York at the time, Not The USA. HVCC’s purpose was to separate Loan Origination from the Bank Appraisal Dept.- Good idea and Intention, Really Really Bad Results for Appraiser and Consumer. Prior to that Vice President “A” of Bank Loan Origination would saunter down the Hall to Vice President “B” in charge of Appraisal Dept for the bank (or same scenario with a Mortgage Company) and say HEY! I need this to come in at x$ amount. Vice Pres “B” then called the appraiser and relayed that info. If & When that was refused by the appraiser, The Appraiser lost the Bank Client and got effectively blackballed from that Lender. It reminded me of Hollywood Rant — “You’ll Never Work In This Town Again”. I know several appraisers who lost their businesses after HVCC because they did just what Vice Pres “B” wanted (Which in turn reflected poorly on all the appraisers that stood up to Vice Pres B) . They made a ton of money prior to the HVCC. Some Honest appraisers also lost out because they could no longer communicate with Mortgage Brokers who were also Honest. (I know shocking- Honest Mortgage Brokers and Honest Appraisers that had a Relationship) and Then–AMC’s became and are the norm. I didn’t do that. Some of those other guys are retired and living the good life because they made so much money until 2009, I’m still shlubbing along 14 years later at age 65 after 35+ years. Who was Smarter?

  2. Avatar Ron Styles says:

    Well written article Mark! 100% on point! Thanks for all you do in exposing the untruths and providing the real facts concerning the appraisal industry. Keep up the good work!

  3. Avatar Honest Appraiser says:

    Easy fix is to copy the VA rotation panel – only because it works for all parties involved and protects Appraiser Independence. Revise Dudd-Fwank to Federally mandate that all states adopt this model and AMC’s disappear on day 1. Tweak in an allowance to add fees for complex work and on day 1 the Independent Appraiser becomes a force to be reckoned with as a group and can work together as professionals instead of being pittted against each other in a race to the bottom. States work to maintain proper levels of participation and geo-competency . The Cat Herding and Cobra Mining in effect are not working for anyone, especially the consumer of Appraisals. This would apply only to FRT’s. NOT credit union or private work.

  4. Ernie Ramos on Facebook Ernie Ramos on Facebook says:

    Great article Mark Skapinetz!! So right on…cheapest and fastest is almost the only model these AMCs have in this slower volume period. But the issues are there regardless!!

  5. George L. Heredia on Facebook George L. Heredia on Facebook says:

    Great article Mark. My only concern/question is who is the intended audience for this article? Being in AppraisersBlogs it is likely other appraisers who are already aware of the points made. Perhaps some brokers and regulators will read this, but they will likely shrug it off as not being their problem or area to look for changes to the industry. Certainly AMCs will do nothing on the issues raised in the story.

    For real change to happen, the public and our elected officials (local, state and Federal) are need to be made aware of these issues. There needs to be some outcry. There needs to be someone in the political sphere that can see these issues for what they are – a danger to the homeowners and buyers impacted by these shenanigans.

    • Mark Skapinetz on Facebook Mark Skapinetz on Facebook says:

      George L. Heredia I posted this to my own blog which has people all over who read it. It’s also been posted to linked In and I’ve made sure it was sent to other contacts I have. Lastly I have a call to be in with some higher up officials in 2 weeks to discuss things.

    • George, we have about 50k subscribers, among them regulators, amcs, builders, banks, lenders, LOs, realtors as well as other real estate professionals. We know people from FNMA, AI, TAF are also following the blog. However, another way of getting the attention this needs, is contacting and sharing articles with your state reps.

      • Baggins Baggins says:

        Impossible. We don’t have that much reach. That many people are not reading our posts. Otherwise how could things continue to be this bad and our group continues to be treated so poorly by the lending community at large? Don’t get me wrong, this site is the absolute best, free disclosure, great writers, great contributors, trust worthy management. It just defies logic to think that many VIP’s read what we have to say and straight up continue to ignore our concerns and abuse our persons and livelihoods with these deceptive industry destroying and career destroying approaches. I guess that’s ‘equity’ for appraisers though. What does ‘the shares’ ticker in the upper right represent? Is it possible to have an article viewed ticker, or is that like unreliable due to bots and web crawlers and such? Hopefully Mark can make something happen, he’s been good at a lead role so far, good work.

        My coping strategy is to make sure to have Article 1 Section X memorized. The bozos in government will never successfully legislate away their own lack of ethic and all the disastrous consequences there to. They are dialing for dollars right now, guaranteed. This is how it works; Gov gives grants to 501c’s, the 501c’s kick back donation money to politicians, they work together on causes which increase grant money. If one never looks at the collateral destruction left in the rear view mirror, the beat simply carries on.

  6. Avatar Pat says:

    The crime lies at the lenders’ feet.
    They are the enablers for the AMCs to rip off everybody. They have shunned their obligations to oversee them or they are ignorant or they are complicit.

  7. Avatar John Daley says:

    First and foremost, I have no problem with any Articles and posts on Appraisal Blog. Its called Free Speech. Keep them coming. From my perspective, the appraisal world is as woke as the rest of the industries in this country. It seems the 5% woke people want to destroy everything. Whether appraising or otherwise, they want to destroy everything in the name of discrimination, racism, etc., I can say a ton more isms to prove my point. Because of that, we get articles for us to look in the mirror, the 95% of us who do it right every day get it thrown back in our faces. I don’t have to look it the mirror every day. I don’t have to worry about whether I am biased, or racist because I don’t care. I don’t care what you are or who you are. I appraise homes unbiased because that was my oath to the appraisal industry. Anyone of you falling for this crap have to look in the mirror. Wake up. You are good at what you do. Don’t let anyone tell you otherwise. Our industry is not supporting us, and that is why I quit. No one will tell me that I am one of these “isms”. Until the Appraisal leaders get it, or get their mitts out of the money game, you will have to listen to this crap. I saw this coming 10 years ago. Hold on until you get the respect you deserve.

  8. Avatar Phillyapp says:

    Mark, nice article. However, the ASC was enacted under FIRREA in 1989. Dodd-Frank, tasked the ASC with some oversight of AMC.

  9. Avatar Shawn Prince says:

    Good article. Keep it going.


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Look in the Mirror

by Mark Skapinetz time to read: 6 min