why not just make it 1/21/09...same difference....

Or we should wait to see what they come up with to stall the checks being issued....to say September.

Rob Dawg.....always has the most appropriate comments...

Ciao
MS

"...Second, this is a shared responsibility of industry, government and homeowners..."

"...all of those who participated in the circle jerk..."

Well, I will concede to Tanta's argument that the appraiser should have a copy of the sales contract, so that buyer's incentives and seller's concessions can be taken into account.

My main problem with most of the appraisals I've seen over the last five years is that the appraiser searched for comparable sales prices, not comparable sold homes. The reason why is because the appaiser is hired by the lender to justify the loan, not provide an accurate fair market value of a house.

To be fair, there are good appraisers and bad appraisers, just as there are good and bad professionals in every profession. But in my mind the appraisal process has been corrupted to favor lenders and not buyers, or sellers for that matter.

Of the dozens of appraisals I've seen, I could count the number I thought were fair and accurate on one hand. Most overvalued the subject by at least $25,000.

Back in the day, Realtors could write appraisals. After the savings and loan debacle, Congress changed the law so that only licensed appraisers could write appraisals. The reason why the system is corrupt today is very simple really. A Realtor has to sell the house, whereas an appraiser does not.

There is a strong incentive for a Realtor to write an appraisal or a price opinion that values a house at fair market value. It's a complete waste of his or her time, money and gas to market, advertise and show a house that is overpriced, because it's not going to sell.

There is no such incentive for an appraiser. In fact, there is every incentive for him or her to overvalue a house so that the loan can be justified, because if it's not the appraiser won't be hired for the next appraisal required by the lender.

This corrupts the appraisal process because it leads sellers to believe that their houses are worth more than they really are and coerces buyers to pay more than they would otherwise have to pay. I see nothing in these proposed rules changes that will correct this fundamental flaw in the system.

Re: aphorisms

A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.

Behind every great fortune, there is a crime. [

Corporation: An ingenious device for obtaining individual profit without individual responsibility.

It is easier for a camel to pass through the eye of a needle if it is lightly greased.

You can run with the big dogs or sit on the porch and bark.

You've got to be very careful if you don't know where you're going, because you might not get there.

Combat Appraisal Fraud....

Is this going to replace American Gladiators on TV. Can we watch the fraudsters get beeaten down as they try to run obstacle courses.

First one to carry a fraudulent appraisal across the field of play gets prizes....

I think we need to look at this from different angles as well and ask what if, appraisers had been coerced to keep prices too low. I dont know how that may have helped anyone, but Id like to suggest that discretionary and capricious opinions rendered without fact are subjective and open to debate. Thus how do you define that the market value is not correct if the market agrees with your discretionary call?

There was a great deal of collusion in this subprime affair and Im not sure the ball should stop at the door of the appraisers, as that is just an excuse to take the light off the others that played the game as well!

Re: Fed Speak:

In its discussion on the topic, the Board said, “Pressuring an appraiser to overstate, or understate, the value of a consumer’s dwelling distorts the lending process and harms consumers…. Inflated appraisals of homes concentrated in a neighborhood may affect other appraisals, since appraisers factor the value of comparable properties into their property valuation. For the same reason, understated appraisals may affect appraisals of neighboring properties. Thus, inflated or understated appraisals can harm consumers other than those who are party to the transaction with the inflated appraisal. Moreover, these consumers are not in a position to know of the practice or avoid it.”

The proposed regulation defines the term “appraiser” as a person who engages in the business of providing – or offering to provide – assessments of the value of dwellings.

..IMHO, The Fed is just looking as if they are busy, as this has no teeth and does nothing to address the fact they have been asleep at the wheel and part of this collusion and coercion!

This mess needs cleaned up from the top, not the bottom:

ed Nominees Pressed on Political Ties
Questions Raised Over Their Service in Administration, but Confirmation Is Likely
By Nell Henderson
Washington Post Staff Writer
Wednesday, February 15, 2006; Page D03

Fed Nominees Pressed on Political Ties - washingtonpost.com

President Bush's decision to elevate three former administration economic advisers to the Federal Reserve Board prompted questions yesterday about whether they would be able to steer the economy independently of the White House they have served.
"This is inevitably going to create the impression that the board is more political than in the past," Schlesinger said. "This creates more of a burden on Bernanke and company to prove they're not taking their cues from [White House Deputy Chief of Staff] Karl Rove."
Warsh, 35, who has served on Bush's National Economic Council for the past four years, is a special assistant to the president for economic policy.

I was going to become an appraiser but it was made all too clear to me that this was a system of nepotism, where you had to be trained by someone that was willing to connect you to the market share he or she already had. There was no way to get into the business and become licensed unless someone took you under their wings and accepted the fact that you would be competing directly with them for future business. That game is crooked and if these people that were running the show made extra cash from being party to collusion, how will you stop that going forward? Just because they come back in 2 years from now and re-adjst the home value, what stops them from having a corner on the market?

I know that banks want to get rid of them, but you still need inspections to verify condition. I think the appraisers do have too much control over discretionary valuation, but they do play a needed role in verification. Perhaps appraisers should be regulated to not give expert valuation opinions, but perhaps use a grading system like the fools at the ratings agencies, to give a house a grade versus a value, then let the bank do the rest?

One last note however. Interestingly enough, when I wanted to have my home re-appraised, I called my insurance agency to get an estimate of the valuation for loan mods, and the insurance company over the phone, sight unseen hit the appraisers number on the dot!

Therefore, smoke that in your pipes, how can a home insurance company know your value as well as the guy getting paid $500?

This makes me question the need for appraisers!

Why shouldn't the investors have control over the appraisal process, including choosing their own appraiser? It is their money.

Of course, you could apply this to the rest of the mortgage process, and then mortgage brokers go the way of travel agents.

I don't believe all present licensed or certified appraisers are going to make the cut to be on a national or regional or state approved list for a wholesale lender (or entity to be named) who will actually order the appraisal. Somebody is going to ask for current resumes and current state
complaint files and 3 references and actually take a look at experience and past disciplinary actions if any.

Wall Street is dictating this procedure. Because they can't sell the mortgages being generated now because potential mortgage secutity buyers do not know and can't find out easily if the price or value is realistic. AVM's as a cross check?
SWAG in many locations. Zillow? what a laugh. BPO's? Gotta pay the broker something and if there is no listing to be had it is illegal in many states for a R.E. broker to offer a BPO for hire for a refi property.

This Code of Conduct is not so much to blame appraisers as to actually provide sanctions for the people or companies attempting to influence appraisers. Much of what is mentioned has been illegal for appraisers to agree to since USPAP was a pup in 1991.
And don't think the honest appraisers haven't lost very much business to the broker's "pet poodles" who would write any number on command.

Just now though, someone in Congress finally made the connection between commission based appraisal order makers and repeat business based appraiser order takers. And decided
that quid pro quo was not conducive to honest value reporting.

And I could not agree more about Fannie/Freddie NOT doing the due dilly dance they were touting to Wall Street they were doing all along. The GSE's had much company in that regard otherwise there would not be trillions in toxic waste out there now.

And Tom O, I would bet you will be ordering the appraisal based on LTV and other criteria but who the appraiser is will not be known to you
until underwriting reports back. That should keep the process fungible should it not?
Hence my comment that not every appraiser is going to make the cut in this process, a number of the people who are licensed or certified do not have the skills or the brainpower to actually work at honest appraising.
Refer to

Appraisers Forum - Real Estate Appraisal Forums

free registration

for an additional earful. Thanks

Yo Tom O,

Consumers were in the drivers seat but in my opinion the general public does not take their mortgages seriously enough. I really don't care if the consumer loses their rate lock due to a sub agreement and snail like appraisers who don't give a rat's ass about service. The consumer has been dictating terms for way too long. They need to get with the new program which is to take it all seriously and not treat it all like some birthright to get a loan at 0% interest for no closing costs. As brokers we need to stop coddling these idiots and put 'em in their place.

I will not take an application and order an appraisal if they don't put up the appraisal fee. I see if they qualify first but I won't go out on a limb like before w/ clients appraisal fees outstanding to be collected at closing.

It will be tough going for a while but when it gets better, hopefully people will take a home loan seriously.

As for all of this costing the consumer in expired rate locks and other costs? It is ultimately for their protection that it becomes like that. 90 day locks and other interest rate hedging products exist. They are costly but who cares. So are 2 million foreclosures. You can't win with John Q. Public. He'll squeal about something no matter what.

Let's bring some order and sense back to this business. This means telling people NO.

So when did an appraiser scmuck know more about an appraising a property than a lender does? What's next, farming out the credit and income analysis to the credit bureau?

And the biggie, New York State AG forming national lending policy?