AppraiserX a Paupers Tale
I am AppraiserX. From humble beginnings I came. Thankful to be working in a profession that I only imagined in my youth. I have heard that the journey is what life is all about. Perhaps, there is some truth to that. Now, after many years in the business, I find that to be more and more true. You see I am what they call a buyers representitive. I appraise homes for buyers and lenders. What I mean by that is that I am not a deal maker. Banks and mortgage brokers are typically looking for someone that will work the numbers up as high as possible so that they can lend more money. Unfortunately, I have a problem with that because if I do that I have let the buyer and the lender down by not providing the most accurate information. The banks and mortgage companies many times sell a bulk of their loans to lenders who invest in the mortgage industry. The problem here is that after the banks and mortgage brokers work to get the highest possible value there is little or no equity in the property and the lenders money is not properly secured. This might also result in the buyer having purchased a property that is over valued. Later on when they decide to sell they find there home is only worth a portion of what they actually paid.
The typical consumer may find this all hard to believe after all of the lending mishaps that have occurred in the past. Unfortunately, these past mistakes have not been corrected. There is too much money involved. Banking is big business. where do you think all the money is? It’s in the bank, right? These big companies have lobbyists that go to Washington and have great influence when it comes to drafting or defeating new lending laws.
They have figured out how to control appraisers and in my opinion actually regulate a large portion of the appraisal industry. They have also figured out how to keep a portion of the appraisal fee and not disclose it to the consumer. That’s right, not only are they raking in huge closing fees but their greed has inspired them to take part of the appraisal fee as well. This is done by simply opening an appraisal management company and sending the appraisal request to this “separate entity” and searching for appraisers that will complete the appraisal for the very lowest fee possible. They get to keep the difference between what they can get the consumer to pay and what the appraiser will accept. I could go on but I think I will save that for another time.
The attorneys don’t want to use my services because they are in many cases looking for an appraiser to meet their value as well. If they represent a property owner in a divorce case, or any other case for that matter, they are looking to get the best possible value for their client. Weather it be a low value or high value, it differs from one instance to another.
By representing a true value appraisers like myself basically eliminate the majority of the appraisal market. When honesty and integrity is supposed to make you more prosperous in the appraisal industry it might just put you out of business. I love the real estate business. Don’t get me wrong. I just don’t like the direction the business is headed. Instead of giving the banks and mortgage brokers less control over the appraisal industry it appears the they will be given even more control. What needs to happen is the law makers need to back up and take another look at the problem. Instead of placing more control in the hands of the people that are causing the problem they need to take more power away. For instance the lawmaker revised the lending laws to make it a crime for banks to apply pressure for appraisers to inflate value. Then to nutrelize that law the lawmakers have provided a loophole that allows the lender to pass the job of applying pressure to the appraisal management companies or AMCs. These companies are unregulated and have absolutely no reason to restrict themselves from applying pressure. There is no system set up to hold them accountable for this kind of unethical behavior.
To counter the pressure to inflate value the law makers should call for federal or state reviewers that look at a large number of the appraisal reports. Give them access to the same sales information so that they can make factual judgments regarding value. Give these reviewers power to suspend appraisers pending a review by the state licensing board. Off set some of the workload by turning the criminal cases over to the courts where they belong. Abolish the appraisal management companies. It should be a crime for any indivedual or company to manage or make police regarding an appraisal report and not be licensed and qualified to complete that same report by a state or federal regulating authority.
In my opinion the best place to start a push for something like this is on the state level. If the state lawmakers would consider amending the appraisal laws to require companies or individuals that manage, place appraisals, or make appraisal policy to be licensed to complete that same appraisal, this would eliminate the unregulated companies and their uneducated employees from having any part in this business. These types of changes are critical if we are going to do anything substantial to combat the problems caused by the unchecked powers that control the now failed lending industry. Then and only then can the appraisal industry exist without pressure or prejudice. I am am AppraiserX, and I am pleased to be able to provide this information for the public.
AppraiserX a Paupers Tale - by: AppraiserX
Filed under: Real Estate Appraisal, Uncategorized | 2 Comments »


Author: Brian J. Davis, ARA - 
Measuring made easy – your versatile partner with a modern look!

Brian J. Davis, RAA - 
The September 2007 USPAP Q&A has been issued by the Appraisal Foundation and covers the following questions: 
Rep Paul W. Hodes