A Push to Artificially Raise Property Values
Now the effort is AGAIN to have ‘us’ artificially raise property values. But the push this times seems to be “only for certain people.
A new press release from Class Valuation, one of the largest US based AMCs, scampered across my office threshold on 5/17/22.
You can read it here in this link: Class Valuation Appoints EVP Of Valuation Modernization – NMP
But if you don’t want to muddle your brain cells very much, here are the highlights:
A new CV Executive Vice President has been hired to “focus on removing bias from the “equation” in appraisals.” I added the quotes. What the hell does that mean? What is this thing known as the “equation” in appraisals?
The release further says the EVP “will help Class Valuation play a role in removing bias” in appraisals.
OK, if truth be told, what exactly is the ‘bias in appraisals’ that must be removed? And if done, exactly how will that be accomplished? I’d really like to know, so please do comment below explaining what this is.
It’s actually a push by non-appraisers to eliminate the Sales Comparison Approach and using nearby properties as comparables.
It further states that CV “remains vigilant in driving scalable processes to offer continuous feedback to our partners with valuation gaps that are under or over the contract sales price.”
So let me see if I understand this: if the appraiser does not appraise the property at the contract price, no matter how ridiculous that might be based on market evidence the appraiser has researched, the appraiser is at fault. Because now a “valuation gap” exists that must be revealed to the CV ‘partners’, i.e., the CV lender clients who hire CV to ‘manage’ appraisers. If such a “gap” exists, wouldn’t that normally be explained by the appraiser in the report? Well maybe not, which it should be!
The final point of the news release is the newly appointed Class Valuation EVP will “…help eradicate bias in the system…”.
That’s just peachy and I’m waiting with baited breath to find out exactly what the “bias in the system” actually is. If you know what it is, please tell me.
The actual truth to all this ‘bias’ stuff is revealed in this PAVE Action Plan presentation slide from a HUD representative that was shown at the AARO Conference in San Antonio, TX this past weekend. Look at the right side of the slide:
The house symbol in the upper left says “The market value of a home.”
Think about that for a moment. Who exactly has determined the ‘market value’ of the home before the appraiser has completed the appraisal? The image to the right shows the appraised value vs the ‘presumed’ market value. This is where the PAVE folks are going off the rails. They apparently believe the target market value is the CONTRACT SALE PRICE if the home is being sold. That’s what appraisers are being judged against.
The PAVE line of thinking is the appraiser is at fault if the appraised value is something other than the contract price, normally meaning ‘below’ the contract price.
When you really begin to analyze this PAVE Action Plan against what Class Valuation has revealed, you can see the fallacy in what’s being promoted.
Most folks who study history know that nearly everything (especially financial) is cyclic, roughly every 10-20 years. In the last financial crisis running up to 2008, and earlier around 1998, appraisers were accused of overvaluing properties, which actually was encouraged by multiple players including the GSE’s using coercion and intimidation. Now the effort is AGAIN to have ‘us’ artificially raise property values. But the push this times seems to be “only for certain people.”
Guess what. The financial cycle, with a different ‘twist’, is repeating itself. Class Valuation and PAVE are among the multiple participants this time.
Dave Towne on e-AppraisersDirectory.com
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I am actually going to attend one of these CE classes this year to see what exactly I can do to eliminate Bias in my appraisals. I would think jump neighborhoods for comps will be there first recommendation. Can’t wait!!!!!
well the lenders are going to have plenty to say about it – comparable adjustments would go off the rails….and is the bias meaning this only benefits those that can pay up for the sales price? and now the AMC knows more than the appraiser?
Would we have to make an adjustment for using a next door neighbor now, as they might be too close to the subject!!
So, let’s disregard the closest and most comparable sales in favor of the more expensive sales? This does not end well for anybody. Has anyone thought about the new tax amount on these new valued properties? Many people will not be able to afford their new taxes.
Class deserves their name
NOT
I did watch the video yesterday. I guess you can’t blame Class for playing the game they have been invited to. Talk about this industry coming full circle and then full circle and then full circle! From the good old boys asking “How much Ya need?” to licensing to HVCC to Dodd-Frank to PAVE. So the goal was to make sure Appraisers did not over value properties because that caused the 2008 mess (tongue in cheek) and now 80% of reports turned in to the State are for under valuation. As if that fear wasn’t enough now we are being directed to over value properties! Just rip off the frgn band aid and remove the requirement for Appraisals all together. Really – what is the point? No AMCs, no Appraisers. Let the Lenders that are pushing this and the GSEs and HUD take the brunt in a few years instead of us. It will come back around. In the mean time – have a cold beer and relax, sit and watch.
Location, location, location. Sorry, not anymore. That’s biased AND racist. The sales comparison approach is racist and perpetuates racism. Never mind economic levels of people in an area or external influences. You jump that neighborhood and find a similar property elsewhere, if the value is higher. Well, in the name of equity and dare I say, economic reparations, the opposite can be applied – just to be fair you see. Let’s whittle down those high values of the ritzier areas by finding “comps” in the lesser ones. See how that flies with the proponents of the bias police. Ain’t it a two way street?
Revealed time and time again, amc’s are not supportive to appraisers, but rather are technical software and technical services companies whom seek to replace appraisers at every turn. They don’t even understand the concept of market value or basic valuation analysis principals. Amc’s have absolutely no business advising anyone, much less steering the future course for appraisal and lending industry regulations.
In other news, sort of off topic but wanted to share. Two links. First is today’s CO fraud alert issued by DORA our state regulating agency. Apparently vacant land sale scams are happening, be on the lookout for those. Second is interesting, this software lenders are using called Blitzdocs. It’s interesting to know about but mostly irrelevant to appraisers. And repost of appraisal cartoon from Samuel Millers site.
https://dre.colorado.gov/division-notifications/real-estate-fraud-alert-a-real-estate-broker-and-consumer-advisory
https://downloads.conduent.com/content/usa/en/brochure/blitzdocs.pdf
Also, did you read this? From Samuel Millers site last year but seems relevant now. On technical failures from zillow on their avm systems. And you’re telling me human appraisers are biased and we should rely on these systems? These people are playing around with billions of dollars, allowing automated systems to bid up properties which they then dump to investors at extreme discounts. You know they write off the losses, which means we the taxpayers end up footing the bill. Then the investors profit on rentals, with an artificially high rental price based on the artificially high price ibuyers just drove up. There is an artificially low availability to market of properties to purchase, and nobody can either access nor afford to make a housing purchase play. This is collusion and looks suspiciously like racketeering. As the morons in government blame racist appraisers for the very conditions we can easily observe, the big ibuyer and tech companies are creating. How stupid do these people need to be to continue with the appraisers are racist nonsense and not immediately focus on very strict regulation and prohibitions against ibuyer and corporate rental companies instead? You can’t make it up. Look for yourself. This is an important article to read. We’re dealing with corporations desires for hyper growth models in real estate to appease investors. They’re putting the thumb on the scale of open market housing price and values. Those corporations and investors provide substantial political contributions. As we get one step closer to the truth of the matter. Here you go this is how they spend a little to make a lot. What a bargain.
https://millersamuel.com/this-just-in-the-a-in-zillow-stands-for-accuracy/
https://www.bloomberg.com/opinion/articles/2021-11-03/zillow-proves-a-hypergrowth-model-won-t-work-in-housing
https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2021&id=D000021872
Ok, this is nothing more than an AMC trying to gain popularity
Catbird seat!
Putting the A$$ back in Class…. You can’t fix stupid.
Just another song and dance…
It’s one thing after another in this industry. 35 years… I don’t know how much more I can take…Very discouraging & depressing to have to answer to the nonsense all the time, every time. With new nonsense added daily it seems.
How bout Wells Fargo firing loan officers for “fixing” loans into WAIVERS??
Oh, if they did it don’t you know they were the only ones gaming the system.
It will take another meltdown to teach the NEW generation.
Stick a neck out BUT are there too many waivers and avm’s out there?
Yes Pat. The wells layoffs over internal tinkering of avm figures to attain waivers was interesting. There are a few longer more detailed stories on the matter. Top execs were like there was no written policy and the culture of get it done now asap was promoted top down. Nobody knew how they were supposed to handle it. Then when the blowback happened the axe fell, they were walked out the door right then and there, some are likely to sue. Wells pushed some pr fluff about how we take ethics very seriously. I’m laughing aloud just typing that. What was that old appraiser joke reference about wells, like the gold wagons guns blazing or something, appraisers used to always make that reference. Nothing has changed, except they use appraisers services far less than before. Someone somewhere out there is winning, but it’s not us.
USPAP violation – Has anybody realized that any appraiser developing an appraisal report using these guidelines would be in violation of USPAP? Where does it say in USPAP that an appraiser may be biased or make a biased adjustment? How would an appraiser support a “bias adjustment”?
We’re going to need a new CE class to teach all of us how to produce a fraudulent appraisal.
Most of us, at one time or another, have rejected an assignment because of a request from a client that, in our opinion, violated USPAP and/or put our license at risk. If a lender, or an AMC asks all those appraisers on their panel to complete the appraisal on a form that introduces a bias or eliminates the Sales Comparison Approach, said request would require the appraiser to violate the ethics provision of USPAP. If such a thing happened, wouldn’t those appraisers file a complaint against that AMC with their respective state regulators?
Furthermore, how in the world, is any agency going to conspire with buyers and sellers to inflate selling prices above the true market value of a property? Do these people really believe a buyer is going to buy at an artificially inflated price … especially once they read the appraisal report?
“Well, you see, there’s the actual value and then there’s this artificially inflated value that we want you to buy at”. As a Broker and an Appraiser, I just can’t see how that is suppose to work even if I signed onto this utterly ridiculous fiasco.
Assessor’s, state treasuries, etc. must love the idea of artificial value inflation pushed by the left = Real Estate tax revenue growth.
Add increased real estate taxes to rising interest rates (thanks to left wing inflationary monetary policies), many buyers can no longer afford to purchase that falsely over-valued house and now must settle for a lesser house. Way to go dips___s.
Could it be that the left wing inflationary / recessionary practices are massively racist; and fictitiously over valuing real estate (which violates USPAP, common sense, real justice, and any sense of decency) is also devastatingly racist? So the left are actually the racist; and at the same time the left is attacking/effectively destroying a profession that is by and large not racists. After a time these inflationary practices contribute to a recession with its high unemployment levels just waiting in the wings – also racists. And the movers and shakers that pull the strings behind the scenes (non-transparent as per usual) again get richer off of the misery of the average joe. Unintended consequences – well maybe not unintended.
Of course this is all due to appraisers.
Yes sir Realist. It’s a tech industry take over.
https://appraisersblogs.com/biased-appraiser-judging-an-entire-profession-by-anecdotal-evidence/#comment-34731
(also the avm white paper link in the post below this following link) https://appraisersblogs.com/uspap-absurdity-zero-value-2-appraisers-or-the-public/#comment-34766
(also zillow, hyper growth model, don’t miss the article I posted above in this thread.)
For real, they’ve had a hundred thousand appraisers running circles about false appraisers are racist slander while they simultaneously work hand in hand with big tech companies, legislators, and our own appraisal foundation and appraisal institute groups to codify in certifications for avm’s to hand over all our job duties and all of the valuation industries economic viability to the very tech companies whom are severely disrupting real property markets. They are going to turn the USA into Europe and eventually all land will be back in the hands of barons and lords, we’ll all be surfs again. The racism card is a pure distraction. This is a hostile take over of the valuation industry by big tech, plain and simple.
Enter standardized measurements, an essential consideration for monopolistic conglomerates whom would seek to rely heavily on automation. I’m telling you, they’re in the know and there are many useful idiots playing along. It’s been a gradual process but eventually there will be that moment of a final push. Appraisers only concerned about their individual positions and individual reputations are missing the bigger picture here. People need to get their minds around it, purposeful removal of checks and balances positions in real property by global big tech companies and global lenders. You can always cash out high, but you can never get back in.
As home ownership rates continue to plummet, big corporate finally took a massive step past the commercial realm and now bulk buy wholesale residential under the guise of ibuyer activity, and they’re about to crash the economic markets again to scoop up even more. Then of course they’ll inflate even further, capitalize on the rise, then crash it all over again. That’s federal reserve economics for you.
Someone is going to have to rewrite this document: Keywords: USPAP Penalty Matrix
All appraisers especially trainees, should have read this by now. If not, it’s an easy read so read it pronto.
(link removed, use links below. Thank you.)
So, Appraisal Foundation, we demand a similar standard and penalty matrix be applied to the tech industry! We do not accept licensing tech companies, and insist all avm developers and engineers be required to have individual licensing themselves, so they can be held accountable to a similar high degree high standard.
Like right now, apply the exact same discretionary principals and penalty approaches to big tech, ibuyer companies, and all avm utilities. Level V violations for everybody! Severe consumer harm! No mitigating circumstances, a complete disregard for consumer safety and market stability! Massive waves of foreclosures on the horizons again. Censure! Reprimands! Restitution! Loss of Credentials! For real, either avm developers need held to a similar individual personal liability standard, or we should abandon the entire avm automation program, kick amc’s out of the picture, restore our income potential they’ve pilfered and taken out of reach from us, and get more human appraisers trained immediately. The big picture, the complete picture, is finally revealed. They want to play the real estate market like a fiddle with no accountability. Real property markets will become just like stock markets, they’ll pilfer rob steal and cheat until there is no such thing as home ownership for regular citizens. Our own industry leaders are totally in on this. Otherwise they’re incompetent and should be removed. How can people not see the big picture by now? I’ve got to run, no work, and I can’t get this lawn mower started. I’m cooked, we’re all cooked. Too many appraisers played along.
That link did not go through. Use this link instead.
Appraisal Foundation Voluntary Disciplinary Action Matrix.
https://appraisalfoundation.sharefile.com/share/view/s5756ff6fa564a778
Oh yeah, that’s better anyways, this is the colorized version, complete with all the tables. Read it all, every line every page.
https://www.appraisalfoundation.org/imis/TAF/Resources/Regulatory_Information/TAF/State_Regulatory_Agency_Resources.aspx?hkey=23ddcae2-5a33-433a-bf94-39d239b91103
During Covid, at least in my state, appraiser’s are/were considered front line workers. What no one warned me about was that frontline also meant that we would have to attempt to take a stand (which will not make a difference, nor significantly slow the left’s massive and non-relenting agenda) against the quickly growing anti-American tyranny being thrust on appraisers (and beyond) via the part of the Marxist playbook having to do with divide and conquer. The left has been very successful so far with the “divide” part, and the “conquer” part is probably soon to follow. Dreadfully and sadly fascinating to watch. Also, it is almost beyond comprehension, watching the indoctrinated masses with their misplaced allegiances ignorantly fall in line and in lock step with their power obsessed deceivers. Their forever futures will be haunted with recollections of “I told you so’s” from us nobodies that really cared.
Realist, sort of a poet, eloquent. Yeah it’s all becoming normalized. Pushing other people around. Accepting an obedient subservient position. Individual rights no longer even a consideration. Essential worker, oppressed person, deserving special treatment and special subsidy, give me a break. Class based society. Then I hear these stories of people complaining about discrimination as they finally stood up and said no. Good ideas do not require force. Fascinating indeed but the animated contest of liberty will never end. It is human nature to be free. Take heart, they can give their liberties away but ours are not so easily relinquished. Those dreaming of positions of power, if they get their way, will one day realize it’s lonely at the top, then they will change too.
Wise words
Great article and follow up comments Dave.
BEFORE Class hires a token equity or bias advisor, their senior leadership better stop violating Dodd Frank. Im speaking specifically of an incident in Texas about two weeks ago when JD jumped on his staffs support bandwagon trying to direct the specifics of an appraisal improperly!
Want specifics? Go ahead and post a denial and I’ll be happy to provide them AND file a formal complaint with the feds. When violating appraiser independence don’t be ignorant enough to do it via email.
These are the people that are going to monitor, judge & opine about OUR non bias?
Im fed up with idiots alleging widespread bias and then failing to prove one single case of it.
Im even more fed up with use of made up words and spelling ostensibly to be ‘more inclusive’ of the ‘alphabet community’. My daughter is a Latina on her mother’s side, not a LatinX.
How can bias claimants claim any kind of high ground while they are engaged in cultural appropriation themselves?
Im done pretending I or anyone else has anything to apologize for!
If Brandon has been guilty of racism during his 47 year career that’s on him. Not appraisers. His confession can only be for his own actions. Not ours.
Btw WHY have 21 African-American descent staffers fled the White House? Tired of being given titles with no meaningful responsibilities? Offended at being token equity hires for Joes image? Placed in jobs they had no background or training for?
No more pandering!
Dude, Mike, you should be in charge of the Appraisal Foundation. For real. You’ve got what it takes and are very qualified. Dave Towne too, why not. All we get is pr fluff from these supposed industry leaders. The honest worthwhile well educated appraisers are right here and we’re not pandering to corporations for disproportionate income or special favors. Some people. The music had to stop sometime, we are not going to dance to the same sorry old tune forever.
https://www.viethconsulting.com/members/newmem/registration.php?orgcode=AGAP
True Dat
Thanks Baggs but TAF is purely a private self-propagating & self-serving PRIVATE organization (imho). I think our best chance would be some new federal agency morphed out of ASC (hopefully). We’d be lucky to get someone like Jim Park heading it.
At least then we’d have uniform standards from state to state. (When interpreted 50+ different ways, then even USPAP is no longer ‘standard’.)
Mike
We need to collaborate…. I will get with you tomorrow
Pat
Sounds great Pat. Anytime after 1pm your time or 10am mine.
Agreed Baggins!!
https://www.appraisalfoundation.org/iMIS/TAF/The_Appraisal_Foundation_Seeks_Candidates_for_BOT.aspx
This came in the email the other day. Appraisal Foundation positions are open.
I’m busy surfing jobs boards with a focus on lawn mowing. You guys can give it a shot if you want to make a move. The top guy gets 360k+ what appears to be nearly a hundred more in some stock options or something. The rest, no compensation. I posted the publicly available tax return links the other day but those can easily be found via irs postings of non profit tax returns and a search for the non profit companies ein#. Thought that was interesting, something appraisers don’t really talk about, turns out not for profit pays premium wages. If the industry wants better equitable standing and reputation, perhaps compensation reform is in immediate order. And why did I get a clear capital email just today? Did not even bother to unsubscribe, I just clicked spam. It’s going to take some time for people to get their minds and business structures around the fact the mortgage market is not coming back in it’s same form anytime soon. Although it looked like reo was on the horizon, there appears to be many options so unless the market pricing slips substantially, they’re finding ways to get current or sell out and avoid short positions. I lost all but one of my long term connections, they’re all gone. The bright side is the amc industry is likely to mirror the position.
True Dat
Long post showed up twice, not sure what happened. Edit.
I’m sorry, been off topic, so much to cover..
https://www.classvaluation.com/reconsideration/
So you’re saying, what they’ve written, is not how they’re actually operating? Quote them copied TRID, and let them know who’s really in charge.
https://www.classvaluation.com/brokers/#broker-advocacy-team
Broker advocacy. Curious. How can an appraisal services manager simultaneously advocate for a brokers position and also uphold the principals of appraiser independence? Sounds like a violation of separation from loan production firewall.
https://www.classvaluation.com/appraisers/#appraiser-relations-team
The brokers get advocates. The appraisers get relations specialists. Hey, hold on, where is the appraisers advocate?
https://www.classvaluation.com/careers/
Someone on these boards called this one a while back. Amc’s will become completely technical focused and will then hire and train appraisers to accomplish the goal of replacing independents. They’re still bragging of record setting business growth too. All while not billing separately for their services, exploiting the appraisal industry to severe detriment, over a decade now.
How to exploit the appraisal valuation industry 101. Pilfer the income of independent appraisers. Support stories which slander the independent appraisers. Replace the independent appraisers with your own staff. Pretend to represent the entire valuation services industry. Promote alternative valuation products. Automate everything in the end. Compete with big tech companies in the housing market for maximized corporate investor profit, after consolidating with even larger companies. Monetize all data.
Related
https://www.housingwire.com/articles/gridiron-capital-acquires-class-valuation/
As they embrace technological adaptations and additional third party servicers, amc’s like this seek to capture the lions share of consumer fees, unbeknownst to consumers. It really is beyond time for AI, AF, ASB, comptrollers, all appraiser groups, software providers, everyone to demand amc’s bill for their services separately and get their own line item in consumer mortgage fee disclosures. There are junk fee rules specifically for mortgage brokers, they all got their hands slapped with significant fines for fee padding (which eventually led to RESPA and TRID). But it’s o.k. for amc’s to do that, amc’s can pad fees, skim as much as they can carve away from the top, don’t have to disclose billable distribution to consumers, and the amc can and does always conceal the consumer appraisal services charge from the appraiser. That’s how we know amc’s are such trustworthy companies, by their billing practices.
As the amc industry brags about record setting growth, they’ve carved out a work around to rake junk fees and unearned fees. Tell me that 15 years of reiterating these same points, nobody at the top has heard or comprehended this argument. This is the very same argument which caused the C&R rule in Dodd Frank in the first place. Appraisers were setting up personal meetings with their state reps to stop the amc fee raking. There were thousands of appraisers letters written on the matter. Alamode Dave Biggers claimed to have personally delivered a truckload of boxes containing appraisers written objections. Another appraiser issued an independent survey and paid every single respondent $25 dollars just to be on record demanding separated amc billing. The invitation was open to every licensed appraiser in America.
This was so big, an industry wide rejection of amc practices. How can all these appraisers move on from this like it never happened? How can regulators not acknowledge the original text of the Reg Z language on recurrent fines pertaining to ‘customary and reasonable’ billing practices? How can appraisal valuation services industry supposed leaders have ignored the detrimental effects of amc’s for this long and still be extended any credibility?
And how in the hell have appraisal leadership groups like the Appraisal Foundation even allowed amc companies to become voices of the valuation industry, invited to strategy sessions with GSE groups and lawmakers to completely retool this industry? The cherry on the top is now we’re all racist for not going with the amc program sooner. This is conscription, we’re all be conscripted or by force will be removed from decades of independent career positions. Unbelievable. Amc’s are known to have engaged in anti competitive practices, that language is peppered all through the federal register circa 2010.
Every single independent appraiser in this nation is simmering in the pan right now. Don’t think for a minute it will stop at mortgage lending. These amc companies will be moving to your CG, government contracts, lender management positions, IRS connections, your estate and legal connections soon. They will not stop at mortgage lending, it’s just that it took a lot of time to reform the ML space. Think these billion dollar companies don’t recognize the market potential? That’s why these investment groups have scooped up every amc and they’re nearly all consolidated under the umbrella of some big investment conglomerate right now. Soon.
FIRREA
https://www.fdic.gov/regulations/laws/rules/8000-3100.html
Well geesh, it’s been more than 6 months since 07/21/2010 and I still don’t see the Appraiser Independence Hotline. Did I miss that? Does someone have a number for me? I’m sure many like myself would have called this number dozens of times by now. Actually they set it up and it was immediately abused by mortgage lenders whom called to complain on every appraiser whom missed their target value numbers, so they shut it down.
SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM REQUIREMENTS.
3) require that appraisals coordinated by an appraisal management company comply with the Uniform Standards of Professional Appraisal Practice; and / (4) require that appraisals are conducted independently and free from inappropriate influence and coercion pursuant to the appraisal independence standards established under section 129E of the Truth in Lending Act.
SEC. 1125. AUTOMATED VALUATION MODELS USED TO ESTIMATE COLLATERAL VALUE FOR MORTGAGE LENDING PURPOSES.
(1) ensure a high level of confidence in the estimates produced by automated valuation models; / FAIL.
(2) protect against the manipulation of data; / FAIL.
(3) seek to avoid conflicts of interest; / FAIL.
(4) require random sample testing and reviews; and / FAIL.
And now the Appraisal Foundation is talking about creating a certification process to certify avm’s which benefit amc’s!? After the ibuyer fiascos, especially after zillow drove peoples values disproportionately high with wholesale blind purchasing then dumped all the stock to Blackrock to hold as rentals, at the same time congress is having meetings to examine falling home ownership rates!? They can not be serious because if they are, they might also be incompetent. Get the comptroller to audit Zillow. Every single ibuyer purchase is one less housing opportunity for all the people of this country. They’re cornering the market and buying millions of properties with trillions of investment. There is no such thing as residential housing anymore, it’s all commercial, just of different sizes and types.
SEC. 1213. COMPTROLLER GENERAL AUDIT AND ACCESS TO RECORDS.
(a) AUDIT OF AGENCIES OR OTHER PERSONS PERFORMING FUNCTIONS UNDER BANKING LAWS–
Except as provided in paragraph (2), all agencies, corporations, organizations, and other persons of any description which perform any function or activity under this Act, or any other Act which is amended by this Act, shall be subject to audit by the Comptroller General of the United States with respect to such function or activity.
Don’t hold your breath. Because there is no valuation hotline!
129E of the Truth in Lending Act. All right then, on to TILA.
https://www.federalregister.gov/documents/2010/10/28/2010-26671/truth-in-lending
The amendments also seek to ensure that creditors and their agents pay customary and reasonable fees to appraisers.
Oh well one way to get around this federal rule would be to create a brand new appraisal product of which there is no basis or measurement point for what constitutes a customary AND reasonable fee. Such as, a desktop with third party inspectors, avm associated appraisal work, all of the current appraisal product topics which too long to list. How about this measurement point; Prior to amc’s hijacking the valuation industry appraisers would get $250 for the simple task of completing a PIR 2075 FNMA form. Under that logic a desktop should cost 600+ and a full appraisal should be up in the thousands. Conditions have changed, and one of the only reasons 1004 forms were affordable, was because all the other non value work lenders needed came exclusively from appraisers and nowhere else. The very promotion of alternative valuation products has already driven billions of dollars away from the appraisal community, rendering everyone left in untenable unsustainable positions, more to come.
Appraisers used to be able to keep consumer side full appraisal fees down, because we’d get JUST AS MANY 2075 requests. This was a vital basis for moving upward in the appraisal career and hiring spectrum because by landing more clients, appraisal firms would get more 2075’s, senior appraisers would in turn switch to completing mostly 2075’s, then they had resources and time to hire staff and train new appraisers. Another valuation industry potential stolen by the appraisal management industry whom outsourced everything possible and worked with lenders to substitute the product and the service. When amc’s hit, 2075’s were the first to go and I remember being told I should complete those for $25 dollars for the amc. Then they promoted hybrids, and the entire valuation industry has been in free fall ever since, courtesy of ‘amc management’. Lest we not forget the amc slander about there not being enough appraisers, as every single amc in this country has bragged about record setting business growth for the past 13+ years while simultaneously not billing for the amc service separately, and creating such anti competitive conditions 3 out of 4 licensed appraisers refuse to accept amc services. And now because of your poor performance under these untenable conditions you had no control over, we will all have to sacrifice even more.
https://1library.net/document/zwwmj37z-federal-reserve-system.html?utm_source=seo_title_list
The federal register. Vol 75, 10/28/2010.
There is a lot there, read it all. I just cleared through the entire thing in about 3 hours, again. This is the federal registry post for rules we still fall under today. If more appraisers knew this content up and down they’d have more tools to fight back.
Automated valuation systems. Under this interim final rule, § 226.42(c)(1) does not apply in connection with the development or use of an automated model or system that estimates value. (The definition of ‘‘valuation’’ does not include an estimate of value produced exclusively using such an automated system. See § 226.42(b)(3).) The Board requests comment, however, on whether creditors or other persons exercise or attempt to exercise improper influence over persons that develop an automated model or system for estimating the value of the consumer’s principal dwelling.
Here is a late comment to that point: You know in 2010 the avm utility companies had not yet become ibuyers. They are now! And they certainly have a lot of influence over the valuation industry. They’ve disrupted housing markets nationally, had direct negative effect on reducing home ownership, have been extremely unreliable in many instances and locations, and absolutely have direct and indirect influence in the houses they provide avm’s for. As regulators seek to ‘correct the human appraisers shortcomings’, and do nothing to regulate ibuyers.
TILA Section 129E(b)(2) prohibits ‘‘mischaracterizing or suborning any mischaracterization’’ of the value of the consumer’s principal dwelling.
Oh boy, like FNMA mandating appraisers use ANSI and turn a market recognized bi level into a ranch with a basement? ANSI demands mischaracterization of a principal dwelling. Who bothers to read regulatory rules these days.
2. Acts of monopolization. Under § 226.42(f)(2)(ii)(B), a creditor or its agent would not qualify for the presumption of compliance under paragraph (f)(2) if it engaged in any act of monopolization such as restricting entry into the relevant geographic market or causing any person to leave the relevant geographic market, resulting in anticompetitive effects that affect the compensation paid to fee appraisers. For example, if only one appraisal management company exists or is predominant in a particular market area, that appraisal management company might not qualify for the presumption of compliance if it entered into exclusivity agreements with all creditors in the market or all fee appraisers in the market, such that other appraisal
management companies had to leave or could not enter the market. Whether this behavior would be considered an anticompetitive act that affects the compensation paid to fee appraisers depends on all of the facts and circumstances, including applicable law.
Ladies and gentlemen, we have reached the end of the line. It happened.
https://files.consumerfinance.gov/f/201503_cfpb_regulation-x-real-estate-settlement-procedures-act.pdf
Kickbacks and unearned fees. Sound familiar?
TRID / https://narfocus.com/billdatabase/index.php
Regulations nobody bothers to read. Refreshing!
https://refermyappraisalcomplaint.asc.gov/
Sorry, was wrong about the hotline. But I recall that it did not play out like it was supposed to. It slides under the radar and it’s my understanding an appraiser is just as likely to face consequences themselves for even using it. Does anyone even know an appraiser whom has ever used this?
Baggs, I never used that specific URL however I have referred complaints (CoreLogic/BofA telling appraisers to ignore pot-growing signs). I sent it to Jim@asc.gov. It was then referred to OCC, and in a very short time, OCC sent me a letter indicating they had taken appropriate action on the issue. Less than a week or two later a public correction was directed by CoreLogic to advise appraisers to ignore the prior advisory and to be sure they complied with USPAP in all appraisals. Mr. Park had previously stated publicly that if an appraiser did not know who specifically (Agency) to refer a complaint to, send it to him and he’d get it to the right place.
TRY the recommended URL first. We aren’t necessarily always going to hear back on these things. No one can guarantee a lender won’t retaliate. AGA Members can be assured we will respond appropriately any time that does happen. Jan Bellas at AGA has been exceptionally effective in getting retaliatory actions reversed (for those members that provide her with ALL the background, accurately represented).
I cannot imagine ASC ever tolerating purely punitive action against an appraiser by a regulated institution as a result of filing an honest grievance through ASC. (That does NOT mean they will intercede in state complaints filed against appraisers).