In a recent post on Matrix, [Talking Points] The National Appraisal Clearinghouse I published the memo text in full for the first time in public domain (that I am aware of). I got a lot of calls and emails from appraisers, organizations as well as links from other sites with a slew of commentary.

The focus of the feedback seems to be on the “clearinghouse” concept in the talking points memo by Fannie Mae. The clearinghouse has the potential to be a huge morass of bureaucracy because it is presented as vague in purpose.

The common perception by most within the appraisal industry that I have spoken with or have provided commentary is that the clearinghouse will become:

  • a giant appraisal management company-like entity that will essentially prevent appraisers from establishing relationships with clients. The appraiser becomes a number in an automated system based on whether or not the appraiser holds a valid license and turns around the report in a required period of time (sounds like an appraisal management company).
  • appraisal management companies [AMC] would become enabled as a result of this talking points memo because lenders went to mortgage brokers and appraisal management companies to begin with to reduce overhead. By eliminating mortgage brokers from the appraisal ordering process, they would be forced to use appraisal management companies since they do not want to manage appraisal panels like they did before. They shifted mortgage origination to mortgage brokers to reduce overhead cost and risk and attempted to shift collateral risk to third parties in the process.

I’d say that both of these issues expressed by the appraisal industry are absolutely of significant concern if AMCs become enabled as a result of the implementation of this memo, it spells disaster for any sort of relevant solution to the problem of disconnect between the valuation of property and the mortgages that are lent against them.

Here’s the specific text from the memo on the clearinghouse and some thoughts on each point.

3. A CLEARINGHOUSE of appraiser information, conduct and activity will be established.

my comment: The purpose seems to either overlap or supersede the function outlined in FIRREA for the licensing of appraisers to be managed by each state. At the state level, budget constraints do not allow them to go much beyond managing license compliance. After all, it is not practical, fair or realistic for a state to tell an appraiser, “Gee, you overvalued this property by $12,000.” State agencies are not given adequate resources to be able to police all appraisers. It has been my experience, at least in New York, that the Department of State has been competent and fair, despite the lack of resources. The function for each state is to provide oversight to make sure appraisers are correctly licensed, their courses taken are approved and to answer complaints by consumers for shoddy appraisal practice. That means dealing with legitimate complaints as well as those from crackpots hoping to smear an appraiser because they were unhappy with a value conclusion. However, that does not address the quality problem with mortgage brokers and AMCs.

a. All lenders will be required to provide post-purchase copies of appraisal documents to the Clearinghouse.

my comment: Of course, with digital documents and scanning capabilities, this process is fairly simple (we’ll get to who pays for this later).

b. It will be an independent entity with an executive and board of directors (no Fannie Mae employee involved).

my comment: This point is important, and as an independent entity, it should include majority representation by appraisers and appraiser organizations as well as lender representation. No mortgage broker or appraisal management company representation since they are part of the reason for the need for this entity to begin with.

c. It will staff a hotline for industry and consumer complaints.

my comment: I see this as redundant to the state function and not able to serve much of a purpose that will prove effective in resolving problems. I think this should remain on the state level and the clearinghouse aggregates complaint data from the states as part of its reporting function. Remember that this organization is essentially one step removed from the state level and could really only refer complaints to each state to handle.

d. It will provide annual reporting publicly.

my comment: From the stand point of summarizing aggregate data, this is an effective tool to create awareness of progress with this serious problem with the mortgage industry. However, it should not be used to publish complaints about individual appraisers unless it can publish complaints about lending institutions, mortgage brokers and AMCs.

DISASTER WAITING TO HAPPEN

Appraisal management companies [AMC] should be pretty happy about their prospects if the talking points memo as presented, becomes standard practice, because they become essential to lenders if mortgage brokers are not allowed to order appraisals for lending purposes. The same quality problems with appraisals will remain, if not get worse.

In other words, the appraisal quality produced by AMC’s is just as bad as the work generated for mortgage brokers. I think it would be a disaster and a monumental waste of energy, given all the progress that New York State Cuomo has made in correctly identifying the real issues at hand if AMC’s become more relevant.

Ideas for consideration

  • If appraisal management companies [AMC] are contractually given incentives for handling a higher volume of appraisal orders by lenders, they are automatically ineligible to manage appraisals that are sold to Fannie Mae.
  • Cap the AMC participation to a nominal percentage (ie 10%) of mortgages accepted by Fannie Mae.
  • Create a national consortium of review appraisers who do not work for AMCs that would review AMC product. Perhaps this could be an offshoot Quality ratings could be established to determine whether the AMC product meets standards for Fannie Mae.

Other ideas or suggestions welcomed.

Aside: I would love to be officially part of the government clearinghouse effort because, as someone recently told me, “the devil is in the details” and I think it is important to have appraisers on the front line actively involved in fixing the disconnect problem.


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26 Responses to “Appraiser Clearinghouse Concept Is Not A Clear Picture”

  1. […] Jonathon Miller discusses it on his Soapbox.  You just gotta love the spectacle of big bureaucratic attempts to solve problems. […]

  2. robert taft says:

    I do review work for AMC’s. The quality of work from “cheap” appraisers is mind-blowing! I see things that make my blood boil. Many can not even get the zoning correct. Why should I be restricted from working with Brokers who know the quality of my work and do not want appraisals that are not only sub-par, but outright incompetent? Nothing like Andrew Cuomo to fix everything!

  3. Chip Wagner says:

    Very interesting news and great thoughts Jonathan. I don’t know if this is really good or really bad and have a lot of questions. So far, it stinks. I know the intentions are good, but ulitimately, I think the outcome could be similar to what happened with licensing and the minimalization of the professional designation as a result of our last crisis (the S&L crisis that lead to FIRREA and licensing)

    I guess the real long-term questions I have are:
    • how will it impact the small one-man appraisal shops?
    • how will it impact the small owner like myself who uses 2 or 3 contractors? • how will it impact the medium sized appraisal firms 8 to 20 appraisers? • How will it impact regional firms? • How will it impact national firms?

    I don’t see how this is going to work without management company’s being involved.

    How will we protect our fees? With management companies involved, we will be stuck doing appraisals for and I’ll never find a contractor wanting to do 50-50 split work unless they are brand new trainees.

    How does someone like me protect my lender clients that are very small banks who are very conservative in their lending practices that like the high quality work that I do? The years of credibility and trust that I have built in my differentiation with my client is now back to the even playing field with the idiot appraisers out there.

    Due to the state of the mortgage industry, I have stepped back from lender work and diversified into other types of residential work. I would be interested in doing lender work again with clients that trust me we all have good and bad clients.

    This to me seems to minimize quality appraisers and their experience or should I say it appears to make us a commodity.

    Maybe I’m way off base following this. I completely agree with your thoughts Mr. Miller.

    I see this as the end of the small guy and into regional residential appraisal firms with staffs of appraisers that can handle it. This will not be good for our profession, although the intent was – just like mandatory licensing of appraisers was 18 years ago.

    I don’t know, the good that comes with this as a result of getting rid of the lender pressure is the question as to what will happen to the few mortgage appraisals I do a month for clients that I like to do work for. I know I am not the typical appraiser here.

    I’m just spitting out thoughts off the top of my head. Is this a good new-bad news scenario?

  4. Jonathan J. Miller says:

    Chip – the concern is very real. I feel like we are so close, but this loophole has the potential to negate all the positive steps that have been taken so far. In other words: the status quo remains and secondary market investors won’t see much of a quality change as a result of this agreement.

    The collective expertise of our profession has been decimated over the past decade as experts like yourself (and myself) have largely moved on to other appraisal areas in search of clients who actually want to know what the value of a property is.

  5. russell raftary says:

    My small company accepts assignments from AMCs. It is amazing the differences they pay. From $180 to $350. What needs to happen is the AMCs need to get 10 to 20% of the fee. Not 50% that many demand. In this way the AMCs will assign the most compentent appraisers as opposed to the cheapest & fastest turn arounds that spend no more money on education or technology.

  6. The following letter has been forwarded to the Appraisal Institute and the NAIFA Presidents. The purpose of this letter is a call for action. I am requesting your assistance. It take a lot of guts to stand in front of a crowd and point them in the right direction. Please forward this letter to your appraisal organizations or use it; however, you wish. We can not have the appraisal organizations sitting on their hands at this time. If you are in agreement, please resubmit this letter back to the every appraisal organizations or associate appraisers. Like it or not changes are coming. It is a matter of a public website ran by the Appraisal Foundation Organizations that conform to USPAP or some government nit wit controlling your success in the Appraisal Industry.

    Re: Grass Root Effort to secure safe website for Appraisers and Lenders from the Appraisal Institute and the National Association of Independent Fee Appraisers

    Dear Ladies/Gentlemen,

    The purpose of this letter is to request your participation in reference to recent changes that have been proposed by Freddie Mae/Fannie Mae/OFHEO. We are requesting a secure web site from a combination of the Appraisal Organizations.

    .I realize the typical independent appraiser have expressed concern about the recent proposed changes. These independent appraisers have established business. You fear that the proposed changes will probably hurt your incomes. How much of a change is on your mind? Many different scenarios have played out in your mind… Like it or not change will be coming! This proposal might be a method of controlling your destiny. Until these changes have been established in the market place, our profession will probably be come the scapegoat unless we work together for the greater good.

    Similar fears were noted back in the 1980’s when FIRREA made it mandatory for States licenses. Certifications were required to continue practicing in the Appraisal Industry. Lets face the facts that between the Realtors, Bankers and Mortgage Brokers with special interest groups and shell wholesale appraisal companies, the independent appraisers are out numbered. The Appraisal Organization lost favor with the independents. However, we should ban together. These same organizations (the Appraisal Institute and the NAIFA) may provided our best hope in terms of treatment for new regulations that are about to be fought over in the coming months. These same organizations maybe able to stop the predatory appraisal shops that have secured orders from the banks while at the same time putting their foot to the back of each of our necks by offering a limit income in order to secure appraisal assignments. For example, the Washington Mutual, the Pam Crowley lawsuit, and EappraiseIt locking and unlocking reports as per testimony from current President were factual stories that we read and discussed amongst ourselves. .

    Your leadership is required. The Appraisal Institute and the National Association of Independent Fee Appraisers (NAIFA) should be involved with creating a web-site shared by both organizations for appraisers and lenders to sign on for future potential assignments. I am not talking about a private site; but, a public website. If enough participation does not produce either Appraisers or lenders, it can be canceled.

    I believe that memberships, dues, and Associate Memberships will increase for both organizations while at the same time serving the public good. There are many appraisers and supporting personnel that need your leadership at this time in our industry that I would like to direct to your new future joint website.

    By creating a central location for both parties (lender & appraiser), I believe that the following can be accomplished: 1. Better quality reports, 2. Increase in membership, 3. Better fees per assignment, 4. Percentage of said fee (10%) to be used for education and salaries, 5. Assist in stabilizing the Real Estate Market with public trust in the Appraisal Industry. If a typical appraisal assignment were charged $400/assignment, the typical appraiser would gladly forward ten (10%) for the above mentioned purposes.

    During the past 20 years or so when State Certification was required, everyone who was in the business that preceded this event said that this is the end for Appraisal Organizations.

    WHAT HAPPEN FROM THEN TO NOW?

    Sloppy reports were produced. Inexperience appraisers that have not been trained properly were received the work. Lower membership members were noted. Fees decreased for various reasons. It is time to bring the dragon (Appraisal Institute and the NAIFA) back out of the cave. It is time to justify your position as leaders in our industry. Therefore, I again request a website for appraisers to sign for the purpose of securing future orders by using our collective power to meet the Banking Industry needs. Individual consultation can be offered to educate both the individual appraisers, underwriters and bankers. Remember, this does not stop the independent fee appraiser from securing other work. But, your present can move the whole appraisal industry forward by building public trust.

    Fraud, pressure from individual lenders, the locking and unlocking our work product and large wholesale appraisal shop that starve the independent appraiser has to stop. Therefore, I respectfully request assistance in this manner. Your organizations have nothing to lose while ascertaining your position as the leaders in the appraisal industry. Your organizations have everything to gain. I urge the Presidents of each organization to act on this proposal and make an announcement that a common website will be founded with the above mentioned goals. I will be among the first to join while preaching like John the Baptist that our day has arrived.

    Thank for your kind consideration into this manner.

  7. Tom Molinari says:

    The ultimate solution to the problem of bad loans, poor appraisal quality, inappropriate influences and pressures on the appraiser is a “Back To The Future” senario. The risk needs to stay with the originator and not be passed on to third parties. Only when the party responsible for originating a poor quality mortgage has direct and significant financial reprocusions for their actions, will real change happen. Only then will the party hiring the appraiser choose an experienced, ethical, and knowlegeable appraiser to provide an accurate market value. Who would George Bailey hire to do his appraisals today? The mortage industry needs a major surgery. The current proposals to not allow mortgage brokers or loan originators to be involved in hiring the appraiser is putting a Band Aid on the problem.

  8. Katherine Scheri says:

    Mr. Corcoran:

    The Appraisal Institute is not the answer and does not work on behalf of appraisers. They have a completly separate agenda partnering with companies like FNC and ZAIO. They have assisted these companies in developing the technology that data mine appraisal reports that are submitted to appraisal portals – all without the knowledge or consent of the appraiser.

    The Appraisal Institute has lost a significant portion of their membership because of their actions and support of companies that work against the independant appraisal process. Initially, companies like FNC were hoping that appraisers would simply ‘contribute’ their reports. When there was a substantial level of discent on the part of appraisers, they turned to the lender offering them a portal for ordering and receiving appraisals. Appraisers were forced to use the portal if they wanted to continue doing business with a lender. The most indignant slap in the face is not only is the appraiser FORCED to use the portal, they are charge $6.00 for each submittal. The arrogance of these companies and the Appraisal Institute is boundless.

    So, Mr. Corcoran, before you emplore the Institute for any assistance, know that they are two steps ahead of you, are jumping up and down on a daily basis about the void that will be left by the agreement entered into by Fannie and Freddie. They have partnered with ZAIO who, with their failed business model, will be more than happy to become a National AMC with their 10k-zone appraiser base. AI/ZAIO are lobbying as we speak to become the ‘independant body’ and I assure you, we are all in for a very, very bumby ride over the next year.

    I am a Certified Residential Appraiser and have lost business because I refused to commit fraud. I have been blacklisted for ignoring ‘estimate of value’ on the order forms. I have never done a comp check and I will not work with brokers. You do not speak for me or for any of the appraisers that feel the way that I do. I would suggest, Mr. Corcoran that you investigate and research those to whom you turn to for help.

  9. Edd says:

    • “a giant appraisal management company-like entity that will essentially prevent appraisers from establishing relationships with clients. The appraiser becomes a number in an automated system based on whether or not the appraiser holds a valid license and turns around the report in a required period of time (sounds like an appraisal management company). • appraisal management companies [AMC] would become enabled as a result of this talking points memo because lenders went to mortgage brokers and appraisal management companies to begin with to reduce overhead. By eliminating mortgage brokers from the appraisal ordering process, they would be forced to use appraisal management companies since they do not want to manage appraisal panels like they did before. They shifted mortgage origination to mortgage brokers to reduce overhead cost and risk and attempted to shift collateral risk to third parties in the process.” Mr. Miller’s condensation of the industry sentiment following the announcement of the Cuomo agreement pretty well reflects my own. I believe developing and funding a national clearinghouse for appraisers or appraisals or both is treating the symptom and not the disease. From what I have heard and seen so far, I believe the agreement and the three or four responses are premised on the thought that the problem of distorted appraisal values is best dealt with by removing opportunity for appraiser influence. However, in removing the opportunity to corrupt the appraiser there is the much larger problem of separating the appraiser from the intended user (or client if you prefer). If I understand the growth of the MB and AMC, it is attributable to the needs of the lending industry to grow business and cut costs. And as far as I can see that is exactly the only result of the spiffy new clearinghouse. I am at a complete loss o understand why the states, even with meager resources, cannot require a higher caliber of appraiser. I have no misgivings that we can ever get rid completely of form-filler, corner-cutter, number-hitters, but it seems to me if the appraiser had a bigger dog in the fight he might think twice about killing the dog. The requirements to join and stay in this industry are not nearly tough enough. Enhancing the qualifications of appraisers, and strengthening the existing enforcement mechanisms at the state level will help this profession. And if an appraiser with a significant investment in his career wishes to deal with some nit-wit who has some idea that value must be distorted, he does so knowing full well that there is an efficient and funded enforcement mechanism he may be dealing with next. We could further enhance this profession tremendously with voluntary review. Supervision and mentorship, which are so touted, are virtually non-existent. Both licensing and designation are important, and it is time the AI and the other fraternities admit that and work to strengthen the profession. And that brings me to the lenders who are the other 86% (according to Fannie) part of the problem. Fannie knows now who they are and what they are doing. Why can’t Fannie and OFHEO or whoever enforce the guides she has now? I’m serious, is there some reason Fannie is participating in this fraud crap. I’m hard pressed to know why Fannie, Freddie, FHA, OFHEO and whatever else has just been standing around. All the stuff about influencing appraisers is in their records and guides already and nothing is happening. It simply escapes reason to think that if Fannie turns records over to some new thing called the IVPI that anything different will occur. I am delighted Mr. Cuomo has the tiger by the tail and I’m ecstatic that Pam got this crazy dilemma on the nightly news. What needs more emphasis is that the very agencies in the position to prevent almost all of what happened to the mortgage end of housing did absolutely nothing. Let’s use the opportunity to force Fannie to deal with the shoddy lenders and we can clean our own house. If we can’t, then Cuomo should serve subpoenas on each and every state. It is important that appraisers develop a professional relationship with lenders. Remove the middle men. And for Pete’s sake, force appraisers to be professionals if we must.

  10. Dear Mrs. Katherine Scheri & Mr. Ed,

    We have traveled similar paths. Your fear is exactly what I believe will happen. FNC, Ziao, EappraiseIt,, & other wholesale appraisal firm will secure contracts to meet the banker’s orders. Because a single individual in the bank is assigned to secure appraisers to fulfill the orders, this individual could careless about the quality. His main focus is locating a firm to meet his demand. Washington Mutual had 250,000 orders that were forwarded to EappraiseIt last year if memory correctly serves me.

    The independent fee appraiser is offer the assignment with a reduction of the original fee by 40 to 50% when submitted to their office by the wholesale appraisal firms. Let’s not forget the $5.00 charged to upload the report into companies like Appraisal Port. It is like getting kicked in the teeth after salt has been poured on open wounds. Yet, we must recognize that these firms have the reserves and lobbyist to influence the outcome. Approximately sixty percent (60%) of the market will be lost to these powerfull entities.

    I am not a member of the Appraisal Institute or the NAIFA. I have met many honorable men who serve in these organizations for the greater good. Therefore, it would be unjust to think all member inside these organizations or other appraisal organzations would allow their reputation to be soiled for the few who operated wholesale appraisal firms in the open market.

    Mark Twain’s notebook indicated,”You can not depend on your judgement when the imagination is out of focus”.

    We are looking at the same problem. Your message is to do nothing and take a wait and see approach. Hoping for the best is a plan that allows the wholesale appraisal firms to win. The other is fearful of creating a giant AMC. He wants the power of each individual State to deal with inferior or fraudulent appraisers. It has been twenty (20) years to act. Investigations cost money. I do not see the Realtors or the Real Estate Commissions allowing their coffers to be raided and used. I understand that you want to create business relationships directly with the bankers. It is a sound business plan. Unfortunately, this is exactly why we are in today’s current crisis. The banker can apply undue influence as per your career. When the banking industry changes their rules and create penalities, the appraisal industry can move away from my idea and use yours.

    “We few, we happy few, we band of brothers, For he to-day that sheds his blood with me. Shall be my brother,” Shakeespeare wrote for King Henry.

    Past experiences have entered into our decision making. Futute fears needs to be addressed. I respectfully request that we join forces. We can all shoot holes in every proposal. Therefore, I request that we band together for the greater good and share our sweat and blood to make this new public website this public website work. Government agencies normally bid out work of every group contract to the cheepest bidder. Wholesale appraisal firms will win if we do not band together as brothers for the common good of our industry.

    Your points of view are welcome. It is the only way to remove the devil in the details and clearly request what is needed to move forward while the banking industry gets their act to gether.

    Please email me if you are more comfortable with this line of communication. [email protected].

    Respectfully submitted, George L. Corcoran New Orleans, Louisiana

  11. Jordan Hudson says:

    I and my company have done work for AMCs from day one. I share much of the concern that is being shared, but not all. I agree if orginized wrong (which is a very real possibility) a large managaement company could be a very bad thing. And I agree that losing that personal contact with the client will destroy hard earned respect and trust. However, the biggest reason I complete reports for AMCs is for the independence (next is the fact that they actually pay). I do quality work that I take much pride in. I know that i may not fit the typical AMC appraiser in that regard, but to label AMC appraisers as a blanket “sub-par” is just inaccurate. Many AMC appraisers choose to work for them by choice as it lends itself to a truely independent appraisal. Its worth the $50-75 reduction is fee. As far as the actual issue of a large management orginization, I hope is happens………. IF, AND ONLY IF………. the orginization encompasses originators, underwriters and brokers. You can’t fix this mess by governing the only part of it (appraisers) that are the most governed ones out of all the parties involved. Qualify, Lisence and hold accountable the other parties or once you stop them from abusing the system one way, they will just find another way to get their commision based pay check. There, is the root of all evil in this industry…. if they don’t close they don’t get paid, and then once thier paid they have no responsability.

  12. Ajohns says:

    Before the self-righteous finish casting their stones, please consider the following: Almost all appraisers think they are one of the good guys. Ignorance, hubris or self-denial…take your pick.

  13. Jonathan J. Miller says:

    AJohns: It sounds like a lot like you have stereotyped the whole profession by decree which is pretty self-righteous. I agree that we all have a little self-righteousness in us, after the crap appraisers have observed and been through. I am guessing that appraisers that care about all of this actually are competent simply because they care.

  14. As a last resort appraisers will always have the option of a class action lawsuit. It is illegal to deny an entire profession a livlihood and (or) impose a manditory fee reductions of 50% or more (price fixing). Have spoken with a large regional law firm (250+ attorneys). The downside is appraisers would need to band together in order to fight it and contribute towards the cost of the litigation.

  15. Edd says:

    “Ajohns Says:

    April 13th, 2008 at 10:24 pm Before the self-righteous finish casting their stones, please consider the following: Almost all appraisers think they are one of the good guys. Ignorance, hubris or self-denialtake your pick.

    Jonathan J. Miller Says:

    April 13th, 2008 at 10:36 pm AJohns: It sounds like a lot like you have stereotyped the whole profession by decree which is pretty self-righteous. I agree that we all have a little self-righteousness in us, after the crap appraisers have observed and been through. I am guessing that appraisers that care about all of this actually are competent simply because they care.”

    I am inclined to agree with Ajohns that most appraisers still standing, indeed most people, believe that they belong in the good guy group. Candor about personal professional ability and experience is not frequently exercised by appraisers in my sphere, while criticism of the work other appraisers do is.

    Basically appraisers in this sphere seem to care about the incompetence of other appraisers. Johnathan, maybe I don’t understand what it is that the appraisers still standing are caring about that render them competent to appraise.

    There are some proposals in circulation that address the voids in clearinghouse. The one that stands out as something other than business as usual is the IVPI. I think it is an opportunity for the industry of appraisers to exercise some control over their profession and business. Certainly preferable to a class-action lawsuit.

    Johnathan’s and Chip’s abandonment of the vital mortgage end of appraising is understandable from the perspective of the preservation of sanity and financial health. Unfortunately they had lots of company including many with letters of designation, indeed even the masses who form associations that espouse appraisal professionalism. It is hard to believe that there is too much caring about those the competence of those who remain apraising for SFR mortgages.

    It is going to be tough to lever any kind of meaningful correction with a large and influential group of our appraiser brethren avoiding the fray, but that is the way it is.

    How about caring enough to give it your best guys, or does that go beyond competence and into stupidity?

  16. Miss Ali says:

    After reading all of the above, it is evident that the “powers that be” have been getting their way alot lately. The issue of GREED relating to power and the almighty dollar, “mammon” if you will, is once again succeeding in its neverending quest to conquer… Wake up folks, this has nothing to do with quality of workmanship…

    but remember, Rome did fall. I like to believe that GOOD conquers EVIL but we must heed this CALL TO ACTION. I don’t have knowledge of the legal system or a procedure that might work. We independant appraisers must get CREATIVE and fight this. I had at one time belonged to a union called the Appraisers Guild. I will contact them and see what they think. I am open to listening to any options.

  17. Gayle Lyle says:

    I just had a very interesting conversation with a Bob Lambersom at Rels Valuation. Upon my request to have my fees increased with Rels, (from 40% to 50% of the typical fee charged within my area) explaining that with the new requirements by Rels for additional listings/pending sales and their required ‘Market Conditions Summary’, it was adding approximately an additional hour to the appraisal report. In addition to this increase in work, economic increases (Fuel, inparticular), I felt justified a nominal increase to appraisers fees. He informed me that if I insisted on a fee increase, he would take me off the ‘List’ for any future work. When I requested to speak with his supervisor, he boldly refused, would not provide his/her name and informed me that he had made the decision to remove me from their ‘list’. Not only is this ‘price fixing’, but ‘black listing’ as well. Simple because I refused to work for the nominal fee he claims I contracted into over three years ago. Claims it is an open ended contract and they are not willing to renegotiate terms.

    THIS HAS GOT TO STOP! Wells Fargo, JP Chase Morgan, Edward Jones, etc. are all charging their borrowers FULL market fees for these appraisals while RELS is paying us 40% of those fees.

    Where and how do we get some backing to force these companies to pay us fair wages? I will be more than happy to do the leg work, if someone will just head me in a direction.

    I and all other appraisers, did not spend countless hours being educated and building our businesses to work for essentially miminum wage.

  18. Edd says:

    Gayle,

    I have experienced somewhat the same disappointment with AMCs. They are nominally emphasizing their ability to deliver quality appraisals, but income is their obvious objective.

    There is absolutely no indication that the AMCs intend to change or that there will ever be an effort to approve appraisers beyond their ability to meet rapid turn times at low cost.

    You will find no coordinated effort among appraisers or appraiser groups to force the AMCs to do anything least of all pay you a fair wage. Indeed, I daily hear appraisers priding themselves on gaining competitive advantage over their peers by delivering ever faster and cheaper appraisals. For the most part those who engage in AMC work are really not thinking long term, and hope to put an end to their involvement as soon as possible. What they forget is that there is apparently an endless supply of appraisers who are forever willing to for less.

    There is no way out of it except to just say no.

  19. windy says:

    Unionize? Is it even possible?

  20. Nora King says:

    I think we should file a class action suit. I work with AMCs as well but they have asked me do do some things that violate USPAP because they don’t understand the rules. I did work for PCV,not only do they want to lower fees these days, but they want more work and many of the staff doesn’t understand USPAP. These are not the type of companies that should be driving the profession. They use appraisers that are cheap and usually cannot deliver a high quality product. No company should be paying less that $275 for an appraisal. Not with gas at $4 a gallon.

  21. Edd says:

    So where did it go? Did Fannie get her way and appoint AMCs to save the real estate economy?

  22. Mark says:

    Please contact me if you really want to know the true heart beat of this profession. This profession has produced a lot of check box appraisers that really don’t understand what they are doing. This is a dying profession and it is due to large mortgage companies and Wall Street.

  23. Mark says:

    The AMC are extorting the wrong appraisers. The RELS marketing conditions addendum. I already include this in my reports, but further relates to the 3 a day appraiser that doen’t take the time to do their job. We are paying the price for these freaks that can do three appraisal in a day. These days of doing three reports in a day is long gone. One report a day and do a proper job is more realistic and lets get paid to do this job.

  24. Edd says:

    From what I understand of the RELS addendum s that they forgot to pa the appraiser to complete it. Their reasoning. AS you say, the appraiser should have been completing all of the work in the development anyway.

    I suspect, if the objective is better market data research and analysis, the priorities of cheaper/faster/shove it in a Fannie box will defeat whatever else RELS or any other AMC does in the name of improving the quality of appraisals.

    So far I haven’t heard that they want the appraiser to develop longer turn times or accept higher fees in an effort to attract competent appraisers.

  25. Edd says:

    Apparently the OCC doesn’t like the HVCC. Dugan basically said the banks are the ones to fix the problem, if there is one.

  26. […] that most appraisers never took it seriously, instead focusing on efforts by Senator Frank and NY AG Cuomo. However, it still has life and is being taken […]