Slow VA Appraisal Turnaround Times Is Overblown
Concerns about slow VA appraisal turnaround times is overblown…
On September 14, 2022, US House passed HR 7735, “the Improving Access to the VA Home Loan Benefit Act of 2022“, legislation that proposes to overhaul the Department of Veterans Affairs’ appraisal requirements, including when an appraisal is required, how an appraisal is to be conducted, and who is eligible to conduct an appraisal.
The Mortgage Bankers Association (MBA) has long been vocal about its support for the bill. “The bill will encourage important reforms to the agency’s requirements regarding when an appraisal is necessary, how appraisals are conducted, and who is eligible to conduct an appraisal,” said Bob Broeksmit, President and CEO of MBA. “This legislation is an important first step towards broad modernization of VA appraisal processes and could make veterans’ home purchase offers more viable in today’s competitive housing market. We thank Representative Mike Bost, ranking member of the House Committee on Veterans’ Affairs, for introducing H.R. 7735, committee chairman Mark Takano, and House leadership for ensuring the bill received appropriate consideration in committee and on the House floor.”
The Appraisal Institute opposes this legislation and its Senate counterpart, S 4208, the Improving Access to the VA Home Loan Act of 2022, and believes that concerns about slow VA appraisal turnaround times is overblown. In a May 13 letter to the House Veterans’ Affairs Committee, AI noted, “We believe the VA appraisal process is sound and deserves broad support by the mortgage and housing sectors. We believe there are ways in which the program can be enhanced – education and awareness on the AAPP program, being one.”
The legislation also allows for desktop appraisals in some circumstances, but the VA has already made that policy change in late July. VA said that its “willingness to accept appraisal reports completed via Exterior-only Appraisals and Desktop Appraisals is not a substitute for an assessment by a VA fee panel appraiser as to the appropriate Scope of Work and whether a credible report may be delivered for the subject property.
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Politicians bought and paid for by the MBA. This is bad for Veterans.
#1). I am on the VA appraisal board and I am active.
#2) Some VA appraisers accept TOO MANY per week.
#3) The VA should limit the assigned appraisers to maybe 3 or 4 per week, at most.
#4) I accept 3 per week from the VA and have..NEVER once in 19 years taken more than 5 days from start to finish (unless the delay was caused by the veteran).
That’s fine for an urban or suburban area or when you only cover a condensed coverage area of a couple of counties. But in large portions of this country there are no appraisers that live in or cover certain rural counties. I have an expanded coverage area because the VA specifically asked me to take on certain counties. I spent a great deal of money to have resources in those areas because some of them have small MLS systems or county subscriptions that have to be bought on an individual county basis. It’s not worth it economically even at VA fees to just run down once a month to a certain county. If I were to only take one or two VA assignments at a time it honestly would not economically be worth it to cover those counties anymore. What are the veterans in those areas supposed to do? You can’t take a broad brush and assume that everything in the entire country operates the way it does in your little neck of the woods. I’m glad you have perfect turnaround time. Not all areas of the country are blessed with having disclosure states and ready access to data that doesn’t have to be independently verified manually with third parties. I also do a lot of review work and I’ve seen plenty of “fast” VA appraisals and speed is not the only consideration.
Good reply, it always amazes me how the “system” and especially AMC’s think that this job is the same in every area. I work a rural area but it’s far from desolate. However I typically drive 150 miles in a day where some Appraisers can do 5 inspections within 20 miles or less and all their comps are within a mile. My comps can be 20 miles in each direction. I don’t mind working hard.. but I HATE working stoopid.
In response to these three quite insightful comments; Flat fee does not work everywhere, neither does a consistent rake off the top. Because without simple easy work, appraisers whom go through such challenges become unable to justify the increased cost and expense. Prior to amc’s training appraisers to undercut each other so the amc could pocket the difference, appraisers would willingly give special deals to remote or complex challenges, as the steady stream of full fee full service orders was sustained in easier to fulfill working areas.
For all the income amc’s rake off the top, the actual cost of such activity is then passed on to some of the most challenged American citizens, the rural populace. We used to go way out there as a special favor for clients to help their borrowers out, not anymore. Any perceived decline in service quality or timeliness can be directly attributed to the amc model of pushing costs down and excluding appraisers whom don’t abide their discounted approaches from accessing the work flow. At one point amc’s hijacked 85%+ of all FNMA work. To this day only one in four appraisers works with amc’s. Calamity ensued. This is not a balanced well run appraisal distribution system but profit is the ultimate incentive, as the scope of this amc mismanagement expands.
Per geo location, that’s arguable as it can be informative and helpful to have a more diverse experience base, to gain perspective on economic and value balance between distant communities. It’s just when a small group of appraisers takes all the work for discounted amc rates, that’s when the negative consequences of service quality becomes an issue, especially with remote. Appraisers are not fixed in space and time for life. Many of us are more qualified from where we used to live, than where we may reside now. So geo location should be flexible. One week turn times are the worst, I remember when everything came at 6 wk, direct assignment, full fee. Anything a week or less was instantly +$200. One of the reasons the VA panel traditionally paid more than FNMA or HUD, more stringent time requirements. How can people whom are not qualified to complete the task successfully manage a complex system like this? The answer is they can’t. The current state of the appraisal industry after more than a decade of amc’s is proof positive, the amc model is a dismal failure which erodes public trust and diminishes consumer protection.
I am always on time with my VA assignments. This is another lie being told about appraisers, that we are taking too much time. It’s an attempt by the lobbying AMC’s to get a foothold into the VA. We all know how much they add to the appraisal process by shopping around for the fastest and cheapest. VA has my full attention and are my priority client.
I am sitting in my house with nothing to do, I had 3 requests this month. One of my appraiser buddies is always overloaded it takes him 2 weeks before he even does the inspections. I do not work for AMCs he works for most of them. Every time I have applied for the VA panel over the last 40 years the answerer has always been something like “We have enough appraisers right now.”
Since 1995 The VA panel is the only system left that is actually working where the Appraiser is allowed to be honest with their opinion, and of course the Gubment wants to fix what isn’t broken.
1. AMC’s spend a week to 10 days “shopping” for the lowest fee and then assigns to someone from 100 miles away because they are $5 cheaper than the guy who lives in the town. What could go wrong from there?
2. VA panel always gets priority from me mainly because they treat us decently
3. Efficiency of panel was hurt badly when they moved away from geo-copmetency and allowing Appraisers to choose any county they wanted – many took on too much territory and forced others to expand further than they should or wanted.
4. The efficiency could be greatly improved if they allowed assignment by zip codes and monitored the panel – I’m efficient in some parts of counties but other areas are very difficult to cover in time and information, different MLS etc.
5. Don’t let DC and Maxine get close to this or it will be a disaster.
It’s great that the VA appraisers are finally rallying. However; so goes FNMA & HUD, so goes the VA, eventually. You’ll never successfully defend systems like the VA appraisal distribution process, without also stopping and reversing the steep declines and wreckless policies FNMA is implementing, as well as the appraisal industry declines in general. So don’t get too comfy, the VA is a GSE, after all.
And when the safe haven of the VA is gone, guess what segment comes after; non gse work. All it takes is the power of these corporate lobbyist groups whom speak for us and cast our votes for us, every appraisal ordered anywhere will have to move through amc’s, along with similar allowances which reduce the need for full service appraisals to the general public. The amc’s collective efforts to restrain trade have been wildly successful, their expansion continues. One step at a time, the process continues to change rapidly. Appraisal Institute Mr Bunton has even made public statements about supporting the development of an ‘avm certification’ program which will serve as a loophole or side step to satisfy lending guideline requirements on required valuation services. Which of course will be handing another billion dollars to amc’s on a silver platter, increasing their influence.
The logical faults can not be over looked. Do veterans deserve this much better protections than American citizens using conventional or FHA lending? Or are veterans paying too much for something which can be successfully reduced and automated? You can’t have both at the same time otherwise one of these positions will inevitably be rescinded. Because you see, the same lenders pushing appraisers to amc’s, accepting and promoting desktops and third party inspectors, refusing appraisers full fee and full service access, are the same lenders whom are forced to abide the VA panel standards.
It is predictable and expected that the same arguments made to eliminate appraisers worth from FNMA & HUD will in turn be proposed and validated at the VA. Appraisers whom think by denying gse work they are saving themselves are mistaken. Tell me again how we can save ourselves temporarily by denying FNMA work, I’ll enlighten you how cool it will be when the pizza delivery guy scans your home with lidar technology, a salesmen realty agent completes your ‘inspection’ for $15, and some appraiser a hundred miles away completes your valuation service in an hour flat on simple forms with no adjustments required, for a $50 fee. Unless one rents for life, citizens eventually have to make use of these systems.
These are the realities of the industry right now, we collectively either save FNMA & HUD GSE work for everyone and restore open access by demanding a VA panel distribution model, or acquiesce to this amc model being applied across the board with increasing scope and frequency. Turn away if you would prefer but you can not unlearn what you know. The three out of four appraisers refusing amc work are on borrowed time. With such a clear minority in charge of the majority, when do we actually get a say and a vote? Imagine if 40,000 appraisers returned to GSE work and simultaneously went on a marketing blitz to demand orders be sent directly, not bid, and no amc be involved. I still to this day can not comprehend how appraisers reconcile the notion that walking away is of benefit to anyone. As if giving up and leaving stranded people behind is the right way to solve problems. If so, what did the veterans serve for in the first place? We can not let the amc industry become the leading voice for the future of real property interest in this country. The amc industries positions, methods, predatory practices and lack of ethic are simply unacceptable. The amc industry is at the heart of this, they proposed these arguments and positions about service quality in the first place to the FNMA & HUD managers, the respective legislators whom enjoy their donations have long since responded. And it’s happening again in the next segment available for predatory exploitation. Action. Reaction. Thank you.
Love the Meme 😉
Thanks. Those were made by someone, somewhere, around the time of HVCC legislation circa 2008-2010 or there abouts. Back when there were 200,000+ appraisers whom all rallied at once to stop predatory engagements. From a day long since passed where quality of service drove the appraisers fee, not the other way around. From a day when qualified persons familiar to the lending industry and liability factors selected the appraiser, not some telecom unlicensed amc worker shopping out what is your fee and turn time emails to anyone with a license within a hundred miles.
Here, this one is even better. Because lenders whom from an appraisers perspective, are a decentralized group where we can freely market to anyone and substitute them as necessary… (One part of the restraint of trade argument). When an appraiser upsets an amc, we don’t lose just one lender, we lose them all. ‘Appraiser independence’. A misnomer living under the oppressive yolk of a predatory amc industry. Where it has most likely finally happened, there may very well be more appraiser managers and people involved with processing appraisals, then there are actual appraisers.
Cheers.
I had always understood that the V.A. loans were full recourse loans. When the VA foreclosed and there was a deficit that the VA would take all but your toolbox and inheritance in securing the balance. I believe that would make the VA appraisal more important to protect the veteran buyer, I’d hope that all the mortgage progresses would also.
Have a Merry Christmas.
I haven’t done a deep dive, but hear is what I personally know.
In being a San Diego County VA approved appraiser (3 + million people / SEVEN MILITARY BASES), my profile states I can do 5 a week, but in nine years, I’ve only been assigned 5 or more a handful of times. Of note, over 9 years, I’ve formally only been unavailable for 9 days, have never been late, and have never received a single written or verbal violation. Additionally, in the past 90 days, I’ve received 13 orders, of which 3 were cancelled (net 1 every 9 days).
Again, I have not read the small print in the new bill, but with the apparent lack of concern for volume to the San Diego appraiser, it appears the VA wants every appraiser to go down with the ship (low individual volume). Interesting note, although qualified, it took 8 years of applying to get on the panel.
I’m very interested regarding the volume for other appraisers.
Seek the truth.
The GSE systems need some level of reformation in the interests of more fair representation, more fair distribution of workflow, and notably more robust consumer protection attention.
Yes, because adding MORE government intervention will surely solve the problem. Here’s a novel idea – how about we REDUCE government role in the mortgage market, eliminate GSEs entirely and let the free and open market determine how they want to handle risk – WITHOUT the inference of government bailouts / government backing falsely propping up the market. If a bank has to risk their OWN money, things might be a little different. Oh, I’m sure the bleeding hearts will cry out that this will keep some people from obtaining the American dream or even the ridiculous idea that expanding homeownership is “good” for the overall economy and that the government should intervene (how’s that worked out after 2 housing crashes causing/likely to cause 2 recessions in 20 years?) Government has had its chance at the mortgage market and proved – as it does with all meddling in the economy – that it is not the answer. As for “more fair distribution of workflow” as you put it, I don’t personally look forward to the possibility that all mortgage appraisal work would become from some type of “rotation” from the good graces of a government agency/entity. It’s all the burden of being a federal employee with none of the benefits. Just ask VA appraisers how that’s going. When you “must” take VA work (i.e. no declining of assignments) and structure your business around that workflow you’re in pretty bad shape when it suddenly goes away at the whim of a couple of ignorant, misinformed (or intentionally malicious) Congresspersons. I prefer to run an actual private BUSINESS where my workflow is determined by the quality of my work and the quality of how I run my business.
Well, it’s complicated. Enforcing existing laws may be helpful. RICO, Restraint of Trade. Of course winding down the GSE’s is the best solution, eliminating the taxpayer backing. In the meantime…
This is interesting.
https://www.cbo.gov/publication/57462
Take a look at ‘table 1’ on comparisons of va fha and fnma, attention to the ‘credit guarantee’ section. It’s a tangled web but does appear to confirm the hypothesis that if these other orgs had to shoulder more risk, they would take fewer risks and use a different program structure.
None of these “little” issues matter because the truth is – well, no one wants the truth anymore. The core of being an appraiser is not calculations, market data or geographic knowledge. It’s being able to tell someone the truth even if you know they will not like it and feeling safe to do so. Seems simple, right? It’s the entire reason our industry exists- not just for mortgages but private work as well (so all you “I only do private work” people are in the same boat here). The entire industry – private work and mortgage work depends on a public need to have someone to tell the truth. That is no longer valued in our current society for anything – which is why no one bats an eye when truth is chipped away at. It’s why the point of ANY appraisal “reform” in the past 20 years has not been to make it easier to tell the truth – but to push the truth-tellers away as much and as fast as possible. To get what you want and the money you want – no matter what the truth is. It’s why once-comedic ideas like “restorative appraisals” are taken seriously now. It’s why at nearly 50 years old (too old to start over, too young to retire) I’m rapidly looking for a way OUT and so should everyone. This won’t be fixed by lobbying, posting online, technology, innovative new processes or joining organizations. Not until society decides “truth” matters again will our industry have any relevance. Here’s a “truth” everyone reading this blog should realize – the sponsor in the left-hand banner is affiliated with the AFL-CIO. Who have they supported in Congress and how is that working out for our industry? Holding people accountable that have caused this situation is the first step to truth.
At 63 with 40 years in I would like to hold out for 2 more years. After that I will put this disaster behind me and never look back. As we would say in the Marines this entire mess is nothing but a “Cluster F**k.”
Sorry, I don’t see any ads. Because I use privacy badger, ublock, ad block plus (permissions denied), and malwarebytes, from mozilla add on tools. Lately I’ve been fiddling with the anti fingerprinting tools, interesting. If you want to really push it, tinker with umatrix and noscript. And I don’t have a facebook account either. Just fyi, there is a better way to surf the internet.
There are quite substantial groups whom still care about the truth. You just don’t get to hear their messages and voices through big tech and syndicated media, home of the modern techno censors and mind set directing propagandists. We’re out there, increasing numbers. Change it up and you’ll find them too. The situation is not hopeless and there is no one qualifying action which is absolutely necessary. There are many paths to success. A friend of liberty is a friend of mine.
The VA’s system is great in some respects, but it illustrates the danger of such a “captive” system. The Tidewater process is a clear violation of USPAP. A VA appraiser provides a RANGE OF VALUE (i.e. between zero and less than the contract price) as part of that process and issues a written report (email or portal note) that does not comply with SR-2. A RANGE of value is defined as an APPRAISAL under USPAP (doesn’t have to be a specific conclusion). Now, because they are a federal agency the TAF nor state boards will call them on this, but a plain reading of USPAP indicates this to be true. But even more disturbingly, the VA fee schedule was changed in the past year. Due to the significant fee increases in most areas no appraisers were willing to complain about this – but if an appraiser has a report 99% complete and has to call Tidewater (i.e. value likely to be below contract) – the lender can (and many times does) cancel the order and the appraiser can only charge 50% of the fee at that point per this new fee schedule. The appraiser’s ability to collect a full fee for a completed assignment is CONTINGENT on whether they decide if the value is there or not and have to invoke Tidewater. You risk 50% of the fee at that point. How is that not a clear issue with appraiser independence? Historically the VA would let appraisers just finish reports that were more than 90% complete – but quietly slipped this into the new fee schedule last year. THIS is the kind of thing that should worry anyone that values independence and honesty – if you have government agencies doling out reports on a “rotation basis” you run the risk of them having too much sway over an independent, unbiased conclusion. You can “fire” an AMC or lender. It’s pretty hard to “fire” a client that might result in 20-50% or more of your workload, particularly if you have to commit to accepting all orders to work for them and they are the “gatekeepers” for a large amount of work.
The VA process worked better than the broken AMC process. As an appraiser who’s been on the roster for over 5 years, I have never been late on an appraisal, have had no quality reprimands and have completed work for the same flat fee regardless. Could I have received 3x the fee and taken longer than 7 days to complete a lot of my work during the past few years? You bet but I wanted to serve the veterans who served me! Now it will go out to the low bidder as it looks like the originators will get their wish. They view the appraiser as the necessary evil in the loan process. Lenders and the public need good appraisers who will save their assets! Even when this next crash hits lenders and homeowners in the face, the appraisers will somehow take the blame. Having worked repurchase in the last crash, I am dusting off my resume while I hang up my hat on VA!