An associate and I were reminiscing the other day about the good ole days when work was plentiful and we were afforded the luxury of turning down certain clients in favor of more desirable ones. The only thing missing from the nostalgic moment was a porch swing and a cold glass of sweet tea.
Times certainly have changed indeed as it seems like no one in the industry, including the leading trade organizations seem to know where we are headed. Blog posts read like bickering matches and opinions become further estranged from one another with less and less meaningful discussion. Appraisers obviously come from varied backgrounds and experience levels but unification increasingly appears unlikely.
Through the years, I have noticed that the common thread of industry talking points has always centered around the so called “pressure on appraisers”. This has uniformly been defined as a mortgage originator’s communicating a desired value to a selected appraiser in order to close a loan. The concept relies on the assumption that appraisers may have completed erroneous reports for fear of reprisal or loss of clients which would then lead to a loss of income. It may be a clear realty that this did occur but the deeper question is to what extent?
Recent months of retrospect have caused me to ask; was it really so prevalent that it actually falsely moved the nationwide real estate market upward which eventually lead to a foreclosure fed collapse? If this is the case, then how many of us are confident we were doing our jobs correctly. If the majority of appraisers are clamoring about coercion to inflate values, then is it fair to assume they gave in to the pressure and then pointed their finger at everyone else?
I have contended in past articles that moral integrity aside; lender approval, keeping a license, avoiding lawsuits and maintaining a good reputation was more than enough to keep me on the straight and narrow in regards to how my firm and myself completed appraisals. After all, how can an appraisal company continue to exist, if they have been driven out by any number of checks in the system? Were these motivations not enough for most in our profession?
The expression “be careful what you wish for” has come to mind many times recently and our wish may be coming true. I fear that our years of beating the appraiser pressure drum have brought forth changes we were not prepared for. The HVCC, rotation lists and expansive lender control are only some of the recent behemoths of regulation that are touted by their originators as an answer to the problem of pressure on appraisers. The ironic thing about these proposed solutions is that they all have loopholes where abuse can and most likely will still occur.
By nature of what we do, it seems as though pressure will be a constant. In regards to value, if it’s not the loan department, then it will be the buyer, seller, realtor, builder, attorney, divorcee, etc. Can we effectively cut off communication between all these parties?
Underwriters can pressure appraisers for data that may not exist and if they refuse to accept a supportable explanation in lieu, that could hypothetically lead to the appraiser being “blacklisted” for inferior work.
Appraisal Management Companies often have stringent turn time requirements but a difficult assignment that needs more time to complete could pressure the appraiser to bypass quality because of fear of losing future work.
The various scenarios are endless but pressure appears to be here to stay albeit in other forms. I can only wonder if there will be those heralding the cause of reform against new types of pressure. The possibility therefore exists that we might be cutting our own throat leaving our liability as our only attraction to end users.
Is it even possible that this is a red herring that has taken our focus off of moving forward in a positive direction? Are we content to rely on the same old clichés while others maneuver themselves to profit from our inability to communicate what we have to offer? I must include myself in this challenge as we face the new challenges in front of us.
Please allow me to be clear. I am not flippantly dismissing legitimate concerns over this issue. Heaven knows that I cried the same woes for years, but at the end of the day I had to sometimes make a stand against some determined clients. Hopefully it was not in prideful arrogance, but rather in respectful steadfastness. The constant vilification of our loan producing clients is running its course and may be near its end.
Maybe its time we try to understand that they also have a job to do which feeds their family. That does not justify fraud or illegal behavior but maybe if we looked at ourselves a little more, then maybe we could find our way out of the current storm.
Other Posts By Michael Armentrout:
Properly Define “Declining Markets” - A Call To Mortgage Lenders
AUTHOR: Micheal W. Armentrout, VP AM Appraisals, Inc. Mike has been involved in full time real estate valuation since early 1992 and has experience in numerous Central Ohio markets. He served as a staff appraiser at several local firms before forming AM Appraisals, Inc. with business partner J.M. Massey. e-mail: marmentrout@amappraisals.com web address: www.amappraisals.com
Recent Comments