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Comment on Financial Reform Implementation
August 17, 2010
I have been a real estate appraiser for 35 years. In all those years I have never seen such a disaster as the HVCC.
Originally, the original intent was a good one; but, it was instituted without much thought. It’s final result was
Was devastating to the appraisal industry. To keep honest professional appraisers in the industry, they must be
Paid a fee which motivates them to provide honest appraisals, and to be dedicated to the profession.
Historically, Prior to the HVCC approximately 14% of all appraisals had been ordered through AMCs annually. After May 1, 2009, too
Many appraisers left the industry. In Georgia alone, over 1400 appraisers allowed their license to lapse.
Currently, it has been estimated that approximately 90% of all appraisal transactions have been ordered through
AMCs. Financially, on an individual basis has been at the least unrewarding. As an appraiser I have to pay for
Continuing education every year (approx $150), Annual license renewals of $125 (in Georgia), Research data
FMLS ($510 monthly), GAMLS ($160 monthly), Redlink –sales data ($12 per hour plus $225 quarterly), Core Logic ($75 per
Month), Annual updates for area location maps ($283 per year), Annual auto insurance ($940), Automobile maintenance
As required, Monthly automobile gas and oil expenses of approx $105, Office Rent ($1200) per month, Office Utilities avg
$273, Office supplies monthly averages $55, Cell phone $54/mo, Monthly computer maintenance of $57, Some
Appraisal directories charge $10 - $15 PER APPRAISAL, Advertising $440. There are other expenses, but JUST TO KEEP MY
DOORS OPEN COSTS ME approx $3,335/mo. Today’s requests were a perfect example of our problems. Today I received
Two appraisal requests (one for a drive-by $125; and the other one for $185 for a full appraisal). The last full year before the HVCC went into effect, we did over 3700 appraisals with an average fee of $325 each.
In the last twelve months, I had to lay off 18 appraisers and 3 staff workers. This year so far,
I have completed 61 appraisals. All 21 employees are currently on unemployment.
I think to re-institute the FHA appraiser panel would be a good step in the right direction.
I also think that each state should have an appraisal panel (a true rotating panel) for Conventional appraisals. If administered properly, there should not be any sort of Lender pressure on appraisers to lie about the value. Appraisers should pay for these Rotating panels. The fee should be a per appraisal fee of approx $5 per transaction. It should be administered by the state appraisal board. Lenders who are late paying Appraisal fees (by no more than 30 days) should be frozen out of the appraisal panel. Failure to pay fees is another form of appraiser pressure.
If the assignment is for a refinance, the appraisal should be paid IN ADVANCE. Furthermore, the MARKET DETERMINES THE VALUE – the assignment SHOULD NOT Have a “requested value amount”.
Any lender that requests a COMP CHECK or a PENCIL CHECK should loose his license. This is ALWAYS regarded as lender pressure.
Appraisal Port (FNC) is a privately owned appraisal portal which in my opinion works Very well. There is very limited contact with the lender. This type system would work Very well as an individual state appraiser panel. Currently they charge $10 per Transaction – which I think is a little too high.
The USDA Rural Development should also have its own appraiser panel. Some appraisers Don’t do FHA appraisals; some, don’t do USDA appraisals; some don’t do VA appraisals. For this reason, several different appraisal panels would be practical. Maybe even one For FNMA and one for Freddie Mac.
Additionally, a practical time should be allowed to perform the appraisal. Turn time Is a problem with AMCs currently. If the appraiser were allowed 5 business days to Perform the appraisal, this would allow him to be more efficient. Some appraisers Perform appraisals in rural areas. The most ridiculous turn time request I get is from One AMC who requires 7 hours completion after inspection. When I perform a rural appraisal For this AMC they’re calling for it at 1:00 am!
Lenders should be able to contact appraisers with regard to appraisal deficiencies. I have been appraising for 35 years, and, truth is, sometimes I make mistakes or Overlook an item. Nobody is perfect. If the lender contact professionally explains The deficiency I never have a problem making corrections or additions as long as it is Not value related.
There are numerous items to be addressed; and, these are the ones which are most Important to me.
Have a good day
|Last Updated 9/14/2010||FinReformComments@fdic.gov|