Lie – Ability
Tax payers should not be LIE-ABLE for the actions of greedy bad players!
Michael Simmons, Principal and founding Director of AXIS Appraisal Management Solutions, a national AMC had an article published in Appraisal Buzz titled “What If?” on October 2, 2017.
The article, which I believe was intended to spark interest and membership in the Collateral Risk Network (CRN), is an epic failure. Thank you Appraisal Buzz for shedding some light on the garbage being discussed at a CRN meeting! Of course no independent appraiser even remotely gives any credibility to this group. We all know who and what they are.
First, let me say, I completely understand Mr. Simmons’ “What If” comments are purely hypothetical and every person in America has the right to free speech. However, a little common sense goes a long way. With common sense comes knowledge and respect. Mr. Simmons has demonstrated the extremely low level of his knowledge of the financial and economic system of our country. As a result of his lack of knowledge, he has lost respect; respect of the very people he needs for his company, Axis Appraisal Management Solutions to be successful. Not very smart in my opinion.
Let me ask a question. Not a “What if” hypothetical, but a sincere honest question to put things into perspective.
Why are appraisers licensed?
There are many reasons why appraisers are licensed and they all lead back to one thing and one thing only… Public Trust.
The savings and loan collapse was the underlining cause for appraiser licensing and a desire to protect the public. The savings and loans were forced to close their doors because of poor decisions from greed. The bad players had consequences for their actions. When that financial disaster occurred, a sound regulatory system was put into place to protect the public. Education, training, testing, licensing and continued education requirements were all put in place to demonstrate to the public the appraiser has the knowledge, skills and training to perform the tasks at hand. The old saying” if it’s not broken, don’t fix it” applies here. The licensing of appraisers has protected the public for almost 30 years and continues to do so today.
The independence of appraisers should never be compromised by anyone. This would include Appraisal Management Companies, Lenders and certainly not Fannie and Freddie and others that insure the loans. No lender, AMC or GSE should ever be involved with training appraisers. It is a huge conflict of interest as they simple are not unbiased.
In the article, Mr. Simmons points out the people on the Agency Relations Committee. Where are the independent appraisers? Why are they not the majority of the people on this committee? The representatives from Fannie, Freddie and HUD all have a conflict of interest. They should not be even involved, much less those making suggestions. Are these people using taxpayer money to attend? Where are our regulators and why are they not stopping this absurdity? Risk assessment is not part of the appraisal process and suggesting short cuts, even in a “What If “ scenario demonstrates a clear lack of understanding of how we got here and the entire financial structure of our economy.
The Savings and Loan collapse happened because of greed. The great recession of 2008 happened because of greed. However, no sound regulatory system was put into place to correct the bad behavior of those greedy people and organizations in 2008. The tax payers bailed out the banks and sadly, those same greedy people and organization are still around today. In fact, the doors were opened wider for more greed and more bad players; the onset of Appraisal Management Companies. Somehow Fannie and Freddie got further off track. Rather than insure good sound lending practices, they are now underwriting loans (Desktop Underwriter), determining the value of the property (Collateral Underwriter and Property Inspection Waivers), and are in discussions and development of modules to train appraisers, all at the tax payers expense.
Greed, Greed, and more Greed; all at the tax payer’s expense.
Appraisal Management Companies are not appraisers. They are not part of the appraisal process. Nowhere in the standards of USPAP are Appraisal Management Companies mentioned. Appraisal Management Companies are supposed to be a third party with no bias. I equate Appraisal Management Companies to the answering service your Doctor’s office uses for after hour emergencies. They exist to merely move information; nothing more. The hiring of low level, under educated people is the basis for that analogy. Mr. Simmons’ article reinforces the extreme low level of knowledge of these greedy players.
Side Note: Appraisal Management Companies are part of no solution. They have created more problems and more and more appraisers refuse to accept assignments from them. Remove Appraisal Management Companies from the appraisal landscape and the industry will move forward.
Pick a value, if you don’t like that value, pick another…
“What If there is a way to use appraisals and PIW’s in concert? I then suggested that all loans be recipients of appraisals, but in those cases where the single point of value that an appraiser defines doesn’t quite work for the best loan pricing, Fannie or Freddie could use their vast reservoir of data to run a collateral analysis (their own internal Black Box which is at the heart of their PIW). If the value range supports the higher value point, Fannie or Freddie could offer the lender the better pricing for the lower threshold LTV.”
How does this protect the public? How does this help the borrower? This “What if” statement does nothing but show how greedy and clueless these people really are.
Lenders, the ones who have the money to lend are supposed to rely on unbiased third party information (aka: facts) to assess the risk in the loan. Do banks ask employers to change the dates of employments? What about their income? What about credit reports?
Dear Employer, we are attempting to close a loan on your employee, Mr. Smith. Can you please reconsider a higher salary for Mr. Smith?
Dear Equifax, TransUnion and Experian, we need a 700 score to make our loan work, Can you please reconsider Mr. Smith’s credit score of 698 so we can close our loan?”
Isn’t an appraisal an unbiased third party product just like a credit report and verification of income? If Fannie and Freddie are underwriting the loan (Desk Top Underwriter), valuing the property, (Collateral Underwriter and Property Inspection Waivers), how are they relying on unbiased third party information? Doesn’t that remind you of what was happening with the Savings and Loans in the late 1980’s/ early 1990’s?
Why does the Collateral Risk Network even exist? Are these people opening themselves up to increased scrutiny? Are their meetings considered collusion? Undoubtingly yes, an argument could be made there is something more going on here.
Greed, Greed and more Greed…
What if Underwriters were held financially liable if a loan goes bad? What if the AMC owners are held financially liable to the lender for a bad appraisal? What if the executives of Fannie and Freddie were held personally liable for all loans that go bad? What if those greedy players engaged in illegal activities actually went to jail for their crimes?
Tax payers should not be LIE-ABLE for the actions of greedy bad players!
By John J. Appraiser, Certified Real Estate Appraiser – author requested to remain anonymous because of the actions of greedy bad players
This just released! Not exactly on topic, but very closely related to the absurdity that is going on.
Fannie Mae allowing lenders to change property data!
Mortgage Insurers will now have access to CU.
https://www.fanniemae.com/content/release_notes/cu-release-notes-12092017.pdf
There are just no words on how wrong this is. Where are the regulators that work for and protect the people?
This is insane! Why would anyone need to ‘edit’ property characteristics that appraisers have reported?
I don’t get it. Are they actually changing our reports or editing CU data?
Does it really matter? If they change the data in CU, they are changing data another appraiser has already submitted.
No! You’re right, it doesn’t.
This is really troublesome. What are they basing these changes on? Looks like Fannie decided that appraisers’ observations & facts don’t matter much anymore.
So Fannie is now allowing lenders to change appraisers’ data and Mr Simmons is suggesting that Fannie/Freddie pick another value if “the single point of value that an appraiser defines doesn’t quite work for the best loan pricing”.
Inmates are indeed in charge of this asylum!
Yes, it appears there is a pencil tool to run what they feel is ‘corrected’ data, likely to trick the score. In technical terms this is known as a process work around. In copy write terms that would be known as unauthorized changes to someone elses work.
Did you read the last part; FM will train the MIs to understand the appraisal data & CU feedback. Note the MIs have agreed not to use CU’s risk scores, findings and other output as the sole bases for (now pay attention because this is what will happen), refuse coverage, rescission cancellation claim denial, claim curtailment, and premium increases.
Read up on rescission, that’s new to me. Please someone chime in with insurability commentary. https://mi.archcapgroup.com/MI-Origination/Master-Policy-Information-Center/Rescission-Summary
Great article and nice rebuttal John J. The man with the gold rules! The greed of lenders is the source of the problem and always has been.
Good comment BigAl. Just want to add politicians along with the lenders.
Boy! The words “intended users” is suffering from extended scope creep. Now it’s Mortgage Insurers, who’s next, realtors, borrowers, buyers, etc.????
It’s getting like we just need to upload our appraisals to a blog and let the world see them.
Appraisal Buzz has deleted the comments for the article “What If”. I guess that don’t like real appraisers calling out the truth!
https://www.appraisalbuzz.com/what-if/
I don’t think any of us is in the least bit surprised about that. I stopped ready AMCBuzz propaganda news years ago.
Great stuff John!!
Yes, a lot of us stopped reading the AMC propaganda on Appraisal Buzz. They have lost a lot of credibility among appraisers. There is an old saying that states keep you friends close and your enemies closer. This I believe has a lot of truth to it. If nobody reads Appraisal Buzz and they continue to publish garbage like the article by Michael Simmons, how could we possibly know what they are up to?
I purposely remain on an AMC roster. I never accept any orders from them, but I see the low fees they offer. Several of those low fee offers where the AMC fee exceeded the appraiser’s fee were handed to our legislature as examples of the AMC abuses. Those examples are now in the hands of the Attorney General.
The point I am trying to make, appraisers are smarter than to be sucked into the AMC propaganda and given time, the greedy bad players will provide the rope in which they will be hung. Appraisal Buzz is feeding us the greedy bad players!
John J Anonymous,
No one has deleted any of the comments on the Appraisal Buzz website. They are all still there. You just have to post with your linked Facebook account. As long as you are willing to put your name behind your words on the Appraisal Buzz we welcome all input.
Also, we are always willing to give a quote. Next time please reach out and we would be happy to clear up any errors and misconceptions you may have before you publish. We publish articles authored by all members of the appraisal industry. We are always accepting submissions at comments@appraisalbuzz.com.
Jim Morrison
Appraisal Buzz
As it relates to deleting comments on your site Jim Morrison, I beg to differ. Its been some time back, but in having a lengthy back and forth with Joan Trice within the comment section relating to the article of the day, my comments (dozens of them) were later permanently deleted. Perhaps your company only has a selective deleting commenting policy.
Seek the truth.
Bill,
We actually did change the policy over a year ago. We decided that if people were willing to attach their real names to their comments through their linked facebook accounts we would allow them to say what they like. The only things we will not allow are cursing, foul language, and personally insulting our authors. We encourage all to participate in the comments section of our Appraisal Buzz articles.
What about persons whom care about ethics and thusly refuse to participate in that platform, ripe with unethical accusations worldwide? Can’t you just run it like this site with validated logins? Facebook has nothing to do with real estate. Geesh.
I met a young attorney who is with the AG’s office last night at a holiday party. We got to talking about the appraisal profession. I pulled up the article on AMC Buzz and showed it to her. She could not believe what she read and asked how could anyone be that ignorant to advertise you suggested fraud and then distribute it? She asked me about CRN and what it was. She stated and I quote, ” The DOJ needs to be alerted to this. An investigation of CRN is warranted based on that article alone.”
Bill,
I myself would like to hear from more appraisers interactions with Appraisal Buzz. Seeking the truth here. Me personally I like the format here on Appraisal Blogs due to the fact we know AMC/Lenders peruse sites like these and some of us are cautious of the possibility of being blacklisted just for telling of our bad dealings with them or even opinions. Appraisal Blogs knows the track of all persons posting and do a great job ferreting out posers. Guess what Jim my Facebook page does not have my real name on it. Also, Bill you didn’t do any of those things Jim stated above did you? It sounds to me more like they can’t take any criticism over there. HAHA Another thing try and tell Appraisal Buzz to stop sending their magazine I did not ask for and they don’t make it easy. Before taking it from mail box to trash I looked and couldn’t find anywhere inside to request that.
With the appraisers forum having become completely not functional with a biased owner who censors at will, this blogs site is the only way to go. It is literally the only place where appraisers can blog in public without fear, without censorship and without bias applied by site owners or advertisers.
I dont use Abuzz for all the reasons cited above, but mostly because I do not want a separate login requirement to enable censoring or “moderating.” Its just my preference.
Thats nice to know Jim, but not sure its always been that way. I stopped using Buzz when I had to wait to post a comment; subject to censorship. If you have changed that policy, my compliments, but past actions of A Buzz are hard to forget and reputations are earned in the long haul – not awarded based on one recent change.
The more open you folks are ad the easier you make it to post, the more regular appraisers will visit there. Its a simple formula.
CRN, Ha Ha Ha.
I glanced at a list of their “members” and realized that I had fired most of them years ago. What a waste of time, why do they even get press.
What if amc’s would not have stolen half of the entire appraisers base income and we could have trained and took on new people instead of the amc’s doing that instead? Well, that’s what fake news does to you, all confusing and such. If the buzz is talking about it, you can count on the message being either approved or promoted by their corporate handlers. They don’t publish real news, they publish advertisements and proposals masquerading as news. Fake News. Mandating a facebook membership to post? If you don’t see the problem there, there is no hope for you.
Hit the road appraisal buzzards
Does anyone else find it very disturbing that these people in the CRN actually function in society and are put in positions of authority? As John J stated, these people are hanging themselves with their own rope. How can anyone be that stupid? Then put it in print to brag about it? The dumb leading the dumber!
I really like how this guy Jim Morrison is trying to back pedal. “give a quote or clear up any misconceptions before you publish” This guy is seriously confused or maybe Appraisal Buzz just likes to embarrass themselves. Appraisers know exactly what CRN is. Hence, no appraisers are part of it. Perhaps Appraisal Buzz should actually read the articles they want to publish, then spend some time thinking about what they just read. Thank you for the good laugh Jim Morrison!
I just listened to an interview Dustin Harris did with Michael Simmons. This guy Simmons embarrasses himself again with his lack of knowledge of the Profession?
Great article John J. I’m sure you and most people here have seen or read “The Big Short”. One of the best explanations of the ‘perfect storm’ that caused the 2007/08 Great Recession or as I prefer to think of it “The Greatest Theft of Taxpayer Funds in History.” I urge all to go back and read or watch it again. Several times.
Even after the collapse, TARP was not necessary! That was the beauty of the theft orchestrated by Paulson.
Example;
(1) Congress could have just as easily passed emergency legislation taking control of the toxic assets portfolios and telling ALL investors and insurers that if they wanted ANY government help against future loss, they had to agree to this. No bank, no investor, no insurer, not even FNMA or anyone else had the legal authority to renegotiate or revise the 2% Option ARMs that caused this when their rates reset. Only the American Congress had that authority.
(2) They could have passed emergency legislation declaring that all loans in the bundled securities funds would be frozen at the 2% rate until the market could be stabilized… even if that took years.
(3) NO taxpayer money had to be spent for TARP, and very very few foreclosures ever had to take place. Very few. There were two ways of putting out the ‘Fire’ of the collapse.
One way would have cost little; protected home owners and losses and allowed the economy to readjust and stabilize relatively easily; and the other way granted huge windfall profits at taxpayer expense while giving cover to the criminals that caused it.
Instead we overlooked the root causes and chose to treat only selected, meaningless symptoms with snake il (like HVCC)
A lot like right now. “It’s deja vu all over again!” FIRREA has failed.
Its been chipped away at too far for too long. Regulators and Congress Members know this. There is already legislation in the works.
Part of it may well be partisan, and anti Dodd Frank (weak as THAT law is its the only one giving appraisers ANY pretense of fair treatment). We need to try to avoid the partisan aspects of whatever is being proposed as replacement, and make sure ALL the concerns we’ve been forced to learn about over the past 8 years from school of hard knocks are adequately covered.
Our regulators are not asleep. We KNOW some have heard the message. Congressman Hensarling has repeated several times that it is past time for FNMA and Freddie to be cut loose. He is right.
I don’t know enough about the alternative legislation he’s suggested we support from one of his colleagues… but we all need to find out what it is.
We all need to try to keep legislators on both sides from reducing this to a purely partisan issue. If we focus on the appraisal related issues we should be able to do so. Please do NOT allow them to side step meaningful reform (or in our case preservation) by partisan deflection.
We also need to get them on record as saying no more bailouts AND the next time it happens Board Chairmen will be among those going to jail.
Recourse loans worked well between 1940 and 1968. Banks took back their bad loans, or traded a good ones for the slow pays. Loan agents worked for banks as employees. Appraisers took the overload, working for;Whomsoever.
Their was fraud, cheating, steeling, etc, however most of this was taken care of by the justice system.
Legislators, needed more housing, more responsible citizens, Johnson cited a need for greater Home ownership, (we were below 60% at that time, we expanded to 65%, and then shrunk back). The new lending rules made No one responsible, not even the Government. Fannie & Freddie were quasi gov. organizations with the Corp. taking responsible. Then the Stuf. escalated
Our Pols. illustrated their level of competence and we did not hold them responsible.
Who is guilty?
Respectfully recourse loans also worked very well in the 1970’s (when I first sold real estate); With Lincoln S&L there were problems which is why we wound up with licensing or appraisers. My belief is that FIRREA and licensing worked quite well for the most part with notable exceptions being Countrywides landsafe and WAMU.
HVCC came out as a settlement with one states AG (Cuomo) whereas criminal prosecution of the guilty parties would have worked much better. Instead, we buried the problems and hid the bad appraisers. How can you have 90% to 95% of all appraisals reviewed rated as deficient to egregiously deficient and not do anything to those that signed the more than 250,000 appraisals; or those that suborned fraud?
Again respectfully UTB, the escalation started before the ink was dry on FIRREA. The ORIGINAL drafts called for 1/10 field reviews and diminimus limit proposed was $25,000 not the $250,000 that was adopted.
I agree that all of us in BOTH parties have not held our pols accountable for the backroom dealing and erosion of necessary protections. I personally refuse to vote for a politician that’s been in office more than 8 years.