When a couple is separating, often an appraisal of the property is needed. There is a wide range of appraisal products available. However, the appraisal you get must be acceptable by the court, or it will not do you any good.
The courts need a full appraisal, that is well documented and can be understood by both parties in the divorce. And, the court must recognize the appraisal as credible.
I did an appraisal for a person getting divorced recently. The other person in the divorce also had an appraisal done. In the courtroom each of us appraisers had to sit on the witness stand and answer questions about their appraisals from both attorneys. After asking the other appraiser several questions about the appraisal they had done, then asking me questions about the appraisal I had done, the judge through the other appraisal out and stipulated to mine.
The difference between the appraisals was, primarily, that the appraisal I did was well presented and well supported. The other appraiser had produced a report that was very biased. Apparently it was thought that such a biased report would help the person the report had been written for. NOT SO! The court threw the appraisal out. That party to the divorce spent time and money on that appraiser, only to have all their work thrown out.
The lesson is, that in a divorce, you are better off to provide the court with an appraisal that is believable, credible and defensible. Otherwise, you are wasting your time and money.
The statistics in Clark county have gone up again. After leveling out at the 200 to 250 per month level for the last half year or so, the numbers have gone up.
In March 2010 the Notice of Trustee Sale filings in Clark County went up to 430. That is the second highest number of foreclosures in the county’s history. In June of 2009 the number reached 486.
With a typical level being in the neighborhood of 60 to 65, the March rate was in the area of 6 1/2 to 7 times what might be considered normal.
The federal government has been working with banks to limit the rate of foreclosures. This, with the intent of managing damage to the market, by not allowing very large floods of foreclosed properties to enter the market. These fluctuations in the numbers are likely influenced by those management efforts.
The statistics for the Clark County filings of notices of trustee sales has leveled out.
We have seen these numbers peak, then fall in 2009. Now, at the first of the year, they have stabilized at about 250 per month. Last December was 236, January was 247 and February was 248.
This rate is still around four times higher than normal, but the stability seems reassuring at this time. Especially after all the volatility in the recent past.
HVCC stands for the Home Valuation Code of Conduct. It was instituted by Andrew Como, the Attorney General of New York.
Read the material and watch the video on the following link. It is very interesting.
http://www.appraisersupport.com/AS/Home.html
As an appraiser who is dedicated to the residential sector, I agree with what is being said in this article and video. The consumer is being ripped off by AMC’s. The appraiser is being ripped off by AMC’s. And, the net result of the AMC dominance in the industry is that the worst appraisers get the most work and the best appraisers get left out.
Why is this? Because the worst appraiser will work for the least amount of pay. The best appraisers charge a fair fee for their services and do ALL THE WORK REQUIRED TO COMPLETE THE ASSIGNMENT. The AMC’s make their money based on how big a spread they can create between what the lender pays them and what they pay the appraiser.
Ergo, AMC’s are “bottom fishers.” They look for the least amongst us to do their work, and pay them the least, thus increasing the AMC’s profitability.
The title of this post is the title of an article by an appraisal management group. I say they are full of crap and quite biased in the misleading information they have published.
Following is an anecdote from my own experience that I am presenting as a rebuttal to the referenced article.
This is a response to Appraisal Management Survey Sheds Light on Industry Propaganda
I attended a four hour continuing education class two years ago, sponsored by LSI. George Vann led it.
There were two primary things I heard presented in the class. One was how to glean showy things from the Internet and put them in appraisal reports to make them look more impressive. He even suggested a software product that we could buy to cut and paste those things we might like to add to our reports. He also suggested a number of things we might go onto the Internet and get and copy into our reports.
Also, he told us more than once in that class (I paraphrase), “Fees to Appraisers are going to continue to drop. Get used to it. If you don’t like LSI fees, just do our work when you are otherwise not very busy, to bolster your annual bottom line.”
Appraisal management companies are for profit businesses. There are two ways for them to increase their profits. One, is to raise the fees they charge to their clients, the lenders. The other is to decrease expenses by lowering and continuing to lower fees to appraisers. Because we appraisers (as a group) are such a bunch of timid mice, the AMC’s know we appraisers are the easier mark.
As long as we appraisers continue to see the world in reverse; that is that the AMC’s own us, rather than we own them (They can’t do a bit of business without us appraisers. If we say “no,” they are out of business.) we appraisers will always have the gun pointed at our own heads saying, “Stand back or I’ll shoot!”
I attended the Appraisal Fraud course in Seattle that I mentioned last time I posted about this. Great class. Complete with photos, copies of indictments, and conversations about prison life for those convicted.
I learned a lot. There are so many ways for business people to fall into the fraud hole accidentally. And, many do it on purpose.
After the class, I took the appraisal I mentioned (that I say is fraud based) and did a review of it. I spoke with the FHA, and they wanted a copy to review. I spoke with the State of Washington, and they wanted a copy to review. The State of Oregon was interested, because they have a similar complaint against the same Oregon based lender who did the loan on the property. And, there is more.
If I am right, and there was collusion from multiple entities involved in the transaction, we can all be sure the proverbial fan is going to fling the proverbial stuff far and wide.
We get asked to do appraisals for probate here at Pacific West Appraisal. It is usually a single family residence that the deceased lived in and has been left as part of the estate.
We do these appraisals often. They are usually prepared and presented on the standard banking appraisal form, known as the FNNA 1004 form.
Probably your primary risk in getting an appraisal for probate is finding an appraiser that is not qualified, or well enough trained to do the work properly. Neither the state, the courts nor IRS smile upon fraudulent work.
The highest credentials you can find for doing probate appraisals are the SRA (Senior Residential Appraiser, awarded by the Appraisal Institute) and the IFA (Independent Fee Appraiser, awarded by the National Association of Independent Fee Appraisers). Those two “Designations” as they are called, are awarded to appraisers who have completed an advanced degree in residential real estate economics. They are the equivalent of a Masters Degree in the discipline.
I did an appraisal in downtown Vancouver, Washington a couple months ago. It is a one hundred year old house that had been painted up nicely inside and out. It had a new kitchen sink, bathroom sink and toilet. But, substantially the same house it was before it was cleaned up.
Some houses are bought and re-outfitted with new exterior siding, new insulated glass windows, new heating, plumbing and electrical systems, etc. This extensive work reduces the effective age of a house. That is, the house would be “made newer,” not just cleaned up, or maintained.
The value conclusion I derived from the market was less than the contract price on the house.
The lender then switched to an FHA loan application and had an appraiser do an appraisal of the same house for the FHA.
Miraculously, the appraiser for the FHA found the current market value of the house to be just over the contract sale price.
The lender sent the second appraisal to me, to show me the way of my error. Unfortunately, the second appraisal was (as I see it) a biased and fraudulent piece of work.
I called the FHA. They have a review process. They asked for the case number and will review the report. The appraiser will be required (if the report is found to be bogus) to attend some specific continuing education, or the appraiser will loose their FHA approval. AND, the FHA will deny insurance to the lender. YIKES!
Also, if the FHA thinks the report is bad, they will send it to the state that the appraiser is licensed in (and the subject property is in) with a complaint to the state.
I am attending an Appraisal Fraud class in a few days. I will take the FHA report with me and review it during the class. Then I will submit it to the FHA with my observation of what parts of the Uniform Standards of Professional Appraisal Practice (USPAP) it violates.
I will keep you posted on the progress of this investigation.
Many appraisers, who have been committing fraud with impunity for years, don’t realize the seriousness of their actions and that industry forces are rising up to deal with this kind of activity.
Yesterday a loan officer from a major U.S. lender called. He wanted me to fill in the gray shaded areas on the 1004MC form with something other than “Not Available.” He said the underwriter told him that the FHA would not accept an appraisal report without that area being filled in with actual market data.
At the top of the 1004MC form there is a paragraph titled “Instructions.” The third sentence in that paragraph says, ” If any required data is unavailable or considered unreliable, the appraiser must provide an explanation.”
It does not say that the appraiser MUST enter numbers into those areas. It only says that an explanation is needed.
Here is the way it works. When a house is listed, it is posted in the system as an “Active” listing. Once an offer is accepted it moves to “Pending” or maybe “Bumpable.” However, once a listing goes to the “Sold” status, it no longer is a listing and not held in the computer as a listing. The “Listing” status is gone. Also, if a listing is “Withdrawn,” or “Canceled” it is removed from the system as a listing and can not be found again, unless it is re-listed.
So, if someone is looking for the “Total number of comparable active listings” for the time frame from 7 to 12 months ago, all that will be found are those properties that were listed in that time frame, or earlier, that have still not sold. This will be a small group of properties that is not necessarily representative of the entire body of listings that existed during that time period.
The Realtors Multiple Listing Service does not maintain a data base of listings that existed in the past. Once a listing has been sold, canceled or withdrawn, it is gone.
House Bill 3040 in Washington State and House Bill 3624 in Oregon State are both working their ways through the legislature.
The banking lobbies are fighting hard to defeat or water down the bills. Of course, the banks that own Appraisal Management Companies (AMC) are at the lead of the fight to defeat the bills. AMCs make a great deal of profit charging banks AND APPRAISERS for the services the AMCs provide. On the banking side, it is a profit center. They don’t want a bunch of appraisers whittling away at their profits. The fact that they are whittling away at the appraises’ profitability and integrity appears to be of no concern to them.
I say it is time for residential appraisers to stop selling their souls to the AMC store. As I’ve said before, the AMCs don’t own us. They use us for their own profits and give us little in return.
WE APPRAISERS HAVE ALL THE POWER. THE ONLY POWER THE AMCs HAVE, WE APPRAISERS GIVE TO THEM.
So, no matter how the legislation comes down, no AMC in America has a chance of surviving or profiting without our (appraisers’) permission.
When an AMC calls and says: “You’ve been doing work for XYZ LENDING for years at a fee of $450. XYZ is using SLUGGO AMC now. SLUGGO wants to pay you $250 for an appraisal order from XYZ LENDING from now on.” You, Mr. or Ms. Appraiser have to say “NO” to this.
If we appraisers act like professionals, rather than a scattered bunch of scared mice, we can move the fees paid to us right back to where they belong.
A couple of years ago I attended a seminar presented by George Van of LSI. He spoke of a lot of things in that seminar. But, the main message he repeated several times to the attendees was, “Appraisal fees are going to continue to go down. Get used to it.”
Mr. George Van, I say to you that you don’t have a business without us appraisers. I say it would be more wise of you and LSI to fight for appraisers’ health and vitality and integrity rather than continuing to abuse us.
And, Mr. Van, I remind you, WE APPRAISERS HAVE ALL THE POWER. YOU CAN’T DO A SINGLE ASSIGNMENT FROM ANY LENDER WITHOUT US.
