My coffee machine broke this morning but I’ll still consider this an [Over Coffee] post. Without that cup, I felt compelled to use my own quote because someone in SeekingAlpha cited my handiwork.
As Jonathan Miller explains, the irony of the NY Times’ cover story on the disarray in the real-estate appraisal market is that the same appraisers who were the source of overvaluation during boom times are now undervaluing because they think that’s what the lenders want (they probably do). “Remember that in either the high or low scenario, it’s all about making their clients happy.”
And this irony really ticks me off. They will profit on the both the cause and the effect side of the credit crunch.
How about a little neutrality in mortgage lending?
“And this irony really ticks me off. They will profit on the both the cause and the effect side of the credit crunch.”
What I hear is that mortgage appraisers are working for fees that have got to be netting them something less than minimum wage.
What bothers me about this irony is that the appraisal industry seems to think that more stringent enforcement of USPAP or reversing licensing will improve the dingy parallel universe of the mortgage appraisal business.
I think that is total denial. Before anything improves in mortgage lending appraisal the appraisal industry is going to have to recognize that many, if not most, mortgage appraisers are stuck in a spot that they must make the clients happy or quit.
The industry must come to terms with the fact that mortgage appraising means the lender places pressure on the appraiser and will do so until the lender gets what the lender wants. We can blame the appraisers over and again, but pretty much it’s like telling a victim not to be bullied. The problem here is the lenders who completely ignore any kind of professional treatment of appraisers, perhaps to the extent of violation of laws and regulations.
I have never heard it said, but I think the leadership must be afraid to stand up to the lenders at a time when they should be calling for a moratorium on mortgage appraising until the lenders cry uncle.