More discussion on yesterday’s topic on recent changes in the mortgage, and specifically the appraisal, industry.
This note came to me today from a friend, local developer, and mortgage broker extraordinaire, Mr. Hugh James.
I just read your piece on HVCC and your recent experience. Very interesting. I had to respond.
As an LO and a former appraiser, I have to say that, in my opinion, the new HVCC regulations are as much a product of AG Cuomo’s political ambitions as anything else. (I’ve even stopped watching Good Morning America in silent protest.)
This is finger pointing by those outside the appraisal industry run amok. (Remember the Cook County Predatory Database that lasted 90 days before being gutted to its current meaningless but bureaucratic state? And now the Cook County requirement that you provide a thumb print on your deed? For what? Would a big toe suffice in the case of an amputee?) I well remember the Resolution Trust. The problems causing the fall of the savings and loans were not laid at the feet of greedy and irresponsible lenders (a la Neil Bush?). No it was the appraisers of property that done ‘em in, or so they claimed. New restrictions and boards were put into place. New licensing criteria. This would never happen again.
The crux of the problem here is not the appraisal standards, or the appraisers. Yes, there are crooked, incompetent appraisers doing business. Just as there are “bad apples” in any field, real estate, mortgages or cake baking. You can find bad ones. The problem always winds its way back to simple, all-American greed. Greedy lenders, greedy mortgage wholesalers, greedy banks, greedy real estate folks, greedy buyers, greedy sellers, greedy LO’s…greed. Everybody wants a deal. Nobody gets paid until the deal is done.
An appraisal is simply an opinion of value of the interest assigned. An educated opinion, in theory, but an opinion, none-the-less. Don’t like the opinion you got? Get another. The problem with HVCC is that you can’t get another opinion. And the first appraisal ordered assumes many facts not necessarily in evidence. That the appraiser is competent, capable and experienced in appraising the property assigned. What’s the appraiser’s level of overall experience? What’s the appraiser’s additional education or certification. His or her experience appraising property in the subject’s community. All appraisers are not created equal, as we know.
HVCC assumes that there has been coercion and collusion with appraisers and LO’s, real estate agents and underwriters in the past. HVCC adds another “layer” between the agent and the LO and the reporting appraiser. A good idea, but it doesn’t address the real problem on the part of the appraiser — core competency and an unwillingness as a professional to be coerced on the part of the appraiser. It needs to go. Like the Cook County database, it will only go when the politicians (and “I’d like to be President” AG Cuomo) get the message loudly and clearly that it’s a burden we neither need nor want. Political pressure, the loss of votes or, worse money in the form of political support, is all they really appreciate.
As to the greed factor? It will always be with us.
James F. Messinger & Co., Inc.
Mortgage Bankers Since 1960
(877) 305-0101, Extension #4
(866) 872-2107 Fax