Readers Respond

Appraiser Last Laugh
It is bad enough that if this continues there will not be many appraisers left in the country. It is economically impossible to survive. The AMCs and underwriters make demands that show they are incompetent. They treat us with no respect and we are now doing double the work for half the fee. We are working for almost nothing with expenses the way they are. – Joan Huhn

I just called it quits after 26 years in the appraisal business. I can’t take it anymore. The substandard appraisal fees are an insult to the profession and I refuse to continue working for chicken feed. To anyone who cares…the profession just lost one of the good guys! – JC in Texas

Appraisals in 24 hours from time of inspection? Which translates to 12 hours if you don’t sleep or eat. I don’t think they (AMCs) even know what USPAP compliant means. Unfortunately this forces us to lie about the inspection date rather than rush through a report.

Financial Reform Passes
(Published in WRE Online Edition and excerpted in the “From the Publisher”)
While the voices of appraisers may have been heard in the financial reform run-up, you neglected to mention the contributions of the Appraisal Institute in recruiting powerful members of the committees charged with rewriting the regulations, especially Paul Kanjorski.  I firmly believe that without the Appraisal Institute and their lobbying efforts, the Financial Reform section on appraisers would not have been included at all.  – John P. Sozansky, MAI

Editor’s Note: Agreed.

For the last two days (as Financial Reform was being signed into law), I took part in the Appraisal Institute’s Appraisal Summit in Washington, D.C.  What I witnessed was almost shocking.  Representatives from banks and AMCs appeared just a stubborn as ever.  They truly are in denial and I fully expect to see armies of lawyers challenging every part of Title XIV. They told me that the banks and their customers will refuse to pay increased fees.  That also includes GSEs (Fannie and Freddie) who now need forensic appraisals to support their repurchase demands  This battle is not over, it’s just begun.  – Gary Crabtree, SRA

Customary and Reasonable Fees
It seems to me that there is a clear definition of “customary and reasonable fees.”  This is the appraisal fee the borrower pays the lender for the appraisal. In my community, Wells Fargo charges the borrower a minimum of $450 for the appraisal.  This is even higher than our customary fee of $350-$400 (before AMCs). The fees the AMCs now pay us are the same fees I was earning 25 years ago when I started appraising in 1985.  At that time a full appraisal (with much less paperwork, addendums and attachments) was $275. How pathetic that we’re back to those numbers. I’ve called RELS and other AMCs I’m forced to work with now about fees. They are absolutely unashamed to state that customary and reasonable fees are the fees they pay us to do an appraisal. How absurd since every appraiser knows what our fees should be, and were, until forced to work at discount rates by AMCs.  I’m fortunate to still work with one bank that pays me my true “customary and reasonable” fees. They do not use AMCs. I’ve tried to contact FHA/HUD many times to see who to talk to about clarifying their lack of definition of “customary and reasonable fees” with no success. – JB (Wishes to remain anonymous.)

Appraiser: I’m not Home Inspector
Report what you observe and disclaim the condition as others have stated does not seem like a big deal. But there are other areas where appraisers have a large liability potential. Anyone care to comment on the potential for disaster by complying with a request to certify that an addition, although not permitted, appears to have been constructed in a workmanlike or professional manner? I have been asked to do this on many occasions. My opinion is that it is not a good idea but based on the reactions of those who ask this of me, many appraisers must sign off on reports certifying this without a second thought. This would present far more liability in my opinion than stating whether the utilities were on or off. – (from Working RE/OREP HVCC Talkback Blog)

This is one of the few time in almost 30 years of appraising that I will side with the lender. What’s the big deal about turning on lights or the kitchen faucet? Just mention it in the report. If we need another profession to qualify if the utilities are operating I am sure millions of the unemployed would be interested. I have worked in appraisal litigation for over 20 years and there is no liability in turning on the lights. – (from Working RE/OREP HVCC Talkback Blog)

HVCC Silver Lining (Originally published in Working RE Online.)
Intelligent appraisers will form their own AMCs where their contacts and review experience matter. Let the new guys and the appraiser idiots do the tough work at half price or less. Everyone will be happy. The experienced guys will be able to make far better money and do less work than ever before. The new guys/idiots will be happy because they have all the work they can handle without ever having to market their services- happy until they go through bankruptcy and learn that they were paying to go to work each day. – (from Working RE/OREP HVCC Talkback Blog)

Working RE
As of yesterday I haven’t received your magazine. If I didn’t enjoy it so much I wouldn’t bother you.  But I do so here I am. :-) Please send another, please…Thanks. ” – Victoria