Friday, December 18, 2009

Marketing Warning: Appraisers1.Com

Hi everyone,

I received a call from Appraisers1.Com to get me to list in their website. She said that they get orders and then distribute them to appraisers on their website.

She claimed that "Almost 99.9% are COD" and you collect from the borrower. For $299 she will put you in their website. You just have to give her your checking account number if you do not want to charge it.

I checked with a few appraisers in the site. Their response was "No work from in three yrs of the listing".

Joseph Benn


I was also called by these people. I didn't let them get as far as Mr. Benn did, as I stopped them when I told them I never pay to be on a list.

It is your business decision, but it appears from what Mr. Benn says, that they ask for a checking account number. BUYER BEWARE!!!!!

Michael Imes, IFA
President, Olympic Peninsula Chapter, NAIFA
Secretary, ACOW


The Appraiser's Forum has a post about this:

Respondents have mixed results to report, and some have apparently gotten work through Beyond this, we have no way to verify the quality or reputation of anyone marketing appraisal management services.

Be careful out there!

Michael Tabor
Hyperion Appraisal, Inc.

Thursday, December 17, 2009

Some fear appraisal reform bill too limited

by J. Craig Anderson - The Arizona Republic

"A U.S. House bill that would cancel out recently imposed rules to make home appraisals more objective has some metropolitan Phoenix mortgage brokers and real-estate agents cheering. But their celebration might be premature, given that major banks seem to favor the existing system...

"Many real-estate sellers, appraisers, agents and brokers have criticized the existing rules, implemented May 1 in an HVCC update, which forbid direct contact between brokers and appraisers, and effectively require the use of intermediaries known as appraisal-management companies. They say those management firms have become too powerful.

"Appraisers also have complained that they have not been adequately compensated since the new HVCC took effect, a problem HR 4173 seeks to correct.

"The code's harshest critics have been mortgage brokers and real-estate agents. Both groups say the new system costs consumers more, takes longer and produces unreliable appraisals.

"Lenders are in complete control of the appraisal system - two of the biggest banks own their own appraisal-management firms - and so far, no one is talking about forcing them to conduct business differently."

The complete article is here.

Banks to Spend 2010 Coping with Commercial Mortgage Maturities

"As billions of dollars in commercial debt comes due over the next two years, with many loans originated from 2005 to 2008 underwater, the need for capital will skyrocket. Of the $3.5 trillion in commercial mortgage debt outstanding, more than $1.1 trillion is needed to service that debt. That's according to a new 2010 forecast from New York-based financial analyst Keefe, Bruyette & Woods (KBW)."

"The scarcity of cash will be most acutely felt in the banking sector, which holds some 80% of the approximately $500 billion in commercial debt that will mature through 2011."


News from Appraisal Summit in Las Vegas

From speaker Peter Christensen, attorney with Liability Insurance Administrators:

Nationstar Mortgage, formerly Centex Home Equity, is now filing lots of complaints. Chase was filing lots of complaints but they have slowed down significantly, probably because of state boards who said they were spending way to much time replying to their "generic" complaint letters. A new trend is mortgage insurance companies filing complaints filing state appraisal boards.

They are paying lots of claims due to losses of lenders on their loans.

Thank you to Ann O'Rourke for this.

On “Geographic Competency”

“Geographic Competency” is a recent buzz word in our industry, most often used as an accusatory slur by market participants who are upset that a deal did not close. Supposedly, this is because the appraiser was not geographically competent to appraise the property, because s/he came from a considerable distance away.

The Appraisal Institute rightly reminds us about the appropriate USPAP Competency requirements, and the issue was covered in the Appraisal Foundation's USPAP Q&A last June.

To pick one AMC as an example, FNC also has a blog, and a recent post describes the rules regarding this issue as well, and they go on to describe how they intend to insure geographic competency in their job assignment process. I think it is helpful to know how this is regarded from the standpoint of our clients, whether we believe "geographic competency" is really at the root of failed loans or not.

"Geographic competency" was never mentioned by lenders in the halcyon days when they were busy shoveling money out of helicopters to satisfy Wall Street's ravenous hunger for Mortgage Backed Securities. Many of us were asked to step out of our usual areas of expertise more times than we could count.

Suddenly, because deals aren't closing, "geographic competency" is a convenient straw man that is easy for the public to grasp, and an effective vehicle to shift blame to appraisers. Lenders have removed over 85% of their products and enacted onerous restrictions that have shut out a stunning amount of people who want to buy a house, but it's still the appraiser who is at fault, somehow, some way.

We are easy to blame because we are a fractured group. The DOL has approximately less than 1/3 of Washington's appraisers on its email list, so even Washington State is not reaching all Washington appraisers with important information. It cannot be overstated that we, as a professional group, need to stand together in order to resist and counter the defamatory slurs that too easily gain traction in today's soundbite media.

We perform a service that is not easily understood by the public, and therefore are susceptible to being misrepresented by other, more politically powerful groups with an agenda and a need for scapegoats.

In the last few months, AMCs have unilaterally demanded as much as 2/3 of appraiser's fees in order to hide their cost from the public, and with impunity, force appraisers to sign contracts (You wanna work? Sign this.) with indemnity clauses that all but guarantee the appraiser will be bankrupted by any legal action. FNC, our example from above, is no exception in this latter regard.

The crowing about "geographic competency" is largely a smoke screen to distract everyone from discussing the devastating effect AMCs have had on appraisers and the real estate industry in general. But until we stand, as a group, with one voice, and counter these accusations effectively, we will continue to be dictated to by others.

The most efficient way for you to make a difference is to join ACOW. It's inexpensive, and in return for your support, you get access to the people who are representing us in Olympia, writing the proposals and modifications to bills that directly affect every one of us. You get input into that process, and to be heard by your colleagues about whatever is on your mind.

Come on! We'd love to meet you!

Bill Regarding CE for Appraising "Green" Buildings

On October 1, 2009, the Washington State Senate's Environment, Water and Energy Committee toured energy efficient homes in Olympia. During that tour, a local green-home developer mentioned problems with the undervaluing of green buildings by some appraisers. In response, Sen. Karen Fraser asked William Bridges [Sr. Staff Counsel, Washington State Senate, Environment, Water & Energy Committee] to draft a bill to require appraisers to take continuing education (CE) requirements on the valuation of residential green buildings.

Appraisers in Washington must currently take 28 hours of CE instruction roughly every two years. The proposed bill draft proposes to require that at least 7 of those 28 hours be related to the valuation of residential green buildings.
As appraisers everywhere know, cost does not necessarily equal value, and the issue of knowledgeability is dealt with by USPAP, which demands that appraisers be qualified (competent) to appraise the subject of an impending assignment.

This proposed bill is based on fundamental misunderstanding of property valuation and appraising, and should be smothered in the crib.

ACOW is working to change the language of the bill, in the event it cannot be thwarted outright. Please read the bill [here], and share your thoughts and suggestions with Stan Sidor, and the rest of us via the comment function of this blog.


Footnote: USPAP’s Competency Rule states: “Prior to accepting an assignment or entering into an agreement to perform any assignment, an appraiser must properly identify the problem to be addressed and have the knowledge and experience to complete the assignment competently…”


REAC on the Chopping Block... Again

As many of you know, Governor Gregoire is once again threatening to eliminate the Real Estate Appraiser's Commission. This appears to be a political tactic designed to create the public impression that she is cost cutting in every way possible, but this action belies the fact that REAC is revenue neutral for the State.

Jim Irish has written a letter to REAC on behalf of ACOW [
here], and the response from Ralph Birkedahl, the Appraiser Program Manager, is here. These two letters provide an excellent example of what we rely upon REAC for.

All Washington appraisers should care about this issue, because the Real Estate Appraiser's Commission is our official liaison to Olympia. Without it, our access to lawmakers and policymakers will be even further diminished, at a time when we can least afford to be disregarded.

Want to help? Please direct your thoughts and suggestions to Stan Sidor, so that we can have a unified voice on this issue.


Investigation: LandSafe

If anyone worked through Landsafe for Countrywide between 2005 and 2008, and you have firsthand knowledge, data, or other information regarding their dealings with appraisers (pressure for value, removal of conditions, photos, etc or other items), please contact Suzanne Clarke.

Thank you,

Michael Imes, IFA, DAR
Certified Appraisal Reviewer

ACOW Secretary

Wednesday, December 16, 2009

King 5 AMC Story

Anyone who has gone out or nearly out of business due to AMCs and their games, King 5 wants to interview you. Contact Richard Hagar (rh@americanappraisals dot com)if you are available for the interview tomorrow (12/17/2009).

Michael Imes, IFA, DAR
Certified Appraisal Reviewer

Secretary, ACOW

Tuesday, December 15, 2009

"AMCs In Legal Trouble...Again"

"The appraisal management company (AMC), Fiserv Solutions, Inc., was ordered to pay a civil penalty of $115,000 by the court for their attempt to influence the information contained within appraisal reports ordered through their service."