Even before the HVCC, AMCs were a bunch of parasites adding no value to the appraisal process. When Como went after eAppraiseIT, I thought things would get better. But, in comes HVCC and out goes carte blanche to the AMCs.

What I don’t understand is with all of the barbs being cast about among appraisers and Realtors; doesn’t it seem a bit far fetched that the collective bunch in one profession would be trying to intentionally ruin the collective bunch in another profession?

The fact of the matter is the American way of life centers around making a buck. And like a herd of cattle, we all gravitate to where the grass is greener. Just look at any new, creative, successful entrepreneurial effort and see how it attracts copycats. Since HVCC, 15 companies I personally know of have offered to provide me with a list of AMCs or to market me to the AMCs for a fee.

The housing bubble, like the dot com bubble was brought on by greed, plain and simple. The lure of the rich and famous lifestyle is a strong motivator for the American capitalist.

Supply and demand drives the market, not realtors, not appraisers, and not mortgage brokers. The makings of a “Perfect Financial Storm” were seeded by the interest rate reductions designed to stimulate the demand for housing. As demand increased, prices of vacant lots and materials went up and new home prices followed. When land and home prices increased faster than the stock market, investors came running and figured out how to make “flipping” very lucrative.

From a Realtor’s or appraiser’s perspective, there was plenty of data to support the inflated prices. Both professionals were aware the data supported the high prices but intuitively, both knew the value just wasn’t there. There were a lot of realty professionals who predicted the meltdown along with the foreclosures. But, while the ruckus was going on, what do you do? Say, “Here’s the data but don’t believe it because I know it’s phony, the real value is what I say it is.” I don’t think so.

The same is true on the downside. The “Flipping Investors” were the first to stick the banks and create the “Short” inventory. The sale of those properties along with a huge inventory of undervalued properties created the declining market. What do we do now? Say, “Here’s the data but don’t believe it because I know it’s phony, the real value is what I say it is.” I don’t think so.

Appraisers are ethically bound to provide an objective opinion of value without any bias, outside influence or self-serving interest. They are generally licensed by their state of residence and can do an appraisal anywhere (that is ANYWHERE) within that state. The license does not specify a community, city, county or any other limiting locale. I don’t like the idea of an out of town appraiser horning in on my turf, but being out of town doesn’t disqualify the credentials. The appraisal process is a cut and dry procedure using hard data and can be done anywhere. What is critical to be a successful appraiser is inquisitiveness and persistence. When you erode the time to do both, the quality of the appraisal suffers, not because of where the appraiser lives.

The problem we now have is the AMCs. AMCs are evil!!

For less than what is paid to fast food burger flippers, appraisers are expected to: research properties and analyze past and future market trends, do a field inspection of the Subject and comps, do more research because the results of the first research had garbage for data, complete a full report within 24 hours of the order and be constantly available for follow up and changes. And, if you don’t perform according to their timeline, your fee gets reduced and you’re put on a “Do Not Call” list. I defy anyone to tell me they could or would want to complete the assignment flawlessly.

There are still good appraisers trying to perform good appraisals for slave wages. When they finally become disgusted and leave, the ones taking short cuts in order to do the volume will be left and the appraisal report will become totally worthless just like the 1004MC.

Well JB, doing something for the sake of saying you did something does not help consumers.

Frustrated in San Fran is an example. Wells Fargo uses a AMC, in fact they likely owned the AMC that did the appraisal in San Fran mentioned above…..That’s a pretty stupid design if the plan is to help consumers, don’t you think?

Realtors have a right to be up in arms and so do borrowers…HVCC is FUBAR

There were several other issues with the original appraisal that I detailed out to my broker when we first got the appraisal. At the time, it didn’t seem worth really pursuing since the $720K value he came up with was high enough to support the loan value. It was once WF’s internal people got involved that it really went bad and they decided the $556K comp was the right one.

But the reality is that the $556K comp should never have been included in the first place. The next lowest comp was at $680K – even though that would still have been too low, if necessary, I could have come up with the $20,000 to get to an 80% loan value.

I had the misfortune to be refinancing just as the new regulations took effect. As a result of an incompetent appraiser, I lost out on getting a 4.75% fixed rate 30 year loan … a rate that I never expect to see again. But then again, I consider myself lucky that I was only trying to refinance and not to sell or purchase a property.

As I regroup and consider my current refinancing options, my mortgage broker is providing a list of questions to ask the appraiser so that I can request a different one if I’m not satisfied with their qualifications.

The irony I see in all of this is that while inflated appraisals may have contributed to the housing crash, the pendulum has swung so far the other direction that overly conservative appraisals are now working against any recovery or stablization in the housing markets. When well-qualified loan applicants aren’t able to get loans because the appraisals are unrealistically low, it just contributes to the downward spiral.

The first red flag, a $324K spread in the “adjusted” value range. They clearly were not using truly comparable sales, and had no idea how to extract appropriate adjustments from market data. At most, the range in adjusted values should not exceed about 20% from high to low, and it seems obvious they did no market comparison to account for the premium view characteristics of your property.

It’s an unfortunately all too common factor I’m seeing more and more these days – lazy, incompetent and unethical appraisers causing everyone pain – home owners, buyers, sellers, Realtors and honest, competent appraisers.

You do have a possible recourse at least with regards to this specific appraisal. You can have the appraisal reviewed by another appraiser you trust in your area, and if the appraisal consists of errors, ommissions, or inaccurate market analysis, you should file a complaint with your state appraisal licensing and certification board. This is the only way to weed out the people who shouldn’t be in the appraisal business. It certainly won’t get the loan you want from WF, but you may find some peace of mind.

The thing you do have going for you with the HVCC if you persue another lender is that the previous appraisal can’t be used. Also, not all lenders are relying on AMC appraisers. Find a large local bank or top mortgage banker in your area who has set up an in-house HVCC compliant appraiser selection process. These places will likely have had business relationships with the best appraisers in town and will likely have these appraisers included in their compliant selection database. Good luck.