This article will try to address misconceptions that are floating around, rather than calling for action by appraisers to protest Cuomo’s Governors race or to join/form a Guild in their state. Nor will I get into how unlimited taxpayer funds are being used to purchase MBS’s that no one in the world will buy. The Government is buying, with our money, exotic mortgage instruments that nobody wants? Yes. Neither will I go into how distasteful it is for me that brokers and realtors have to stake their local reputations and livelihoods on an unknown quantity like the AMC picking the appraiser by lowest fee instead of competence.
1) The HVCC (Home Valuation Code of Conduct) is illegal. Although the HVCC was issued in part by an administrative agency of the federal government, it did not go through the Administrative Procedures Act (APA) or the Regulatory Flexibility Act (RFA) as required of rules issued by administrative agencies of the federal government. It’s described as a settlement between New York AG Andrew Cuomo and Fannie and Freddie (the GSE’s) so they wouldn’t have to open their books. The HVCC was born out of a fraudulent union of an AMC (eappraiseit) and Washington Mutual Bank in inflating appraisal values – an illegitimate child so to speak, along the lines of the indigenous hill folk in the movie “Deliverance”. It’s truly amazing to me that the Attorney General of New York, who is supposed to uphold the law to the best of his ability, would not want his own policy to go through due process to ensure the HVCC protects the consumer. Maybe because he knows that it’s serving private banking interests and doesn’t protect the consumer and hence would not pass due process? That is my guess. Look at his largest contributors and that he was on the board of AMCO (an AMC) and you can understand. The legality of the HVCC has been challenged but answered: “As the GSE’S are in Federal conservatorship (bankruptcy) the HVCC cannot be challenged in any court of law”. Mind boggling, like so many policies of this administration that pays the banks, AKA financial terrorists, ransom in the sum of all the wealth and abundance of this nation. Just $1 trillion dollars could pay for free college and health care for all and much more! But, I digress.
2) In TAVMA’S newest release, “Per USPAP it is the ultimate responsibility of the appraiser to only accept work that s/he is competent to complete.” Wrong again. USPAP states that if an appraiser is unfamiliar with an area they are to notify the lender and if they want them to complete the assignment they must spend enough time in the market to become geographically competent or, they can associate with someone skilled in that market so they can complete a competent report. Steps taken for competent report completion must be outlined. This is what happens when you let neophytes tell appraisal professionals how to do their jobs. It’s entitlement lunacy!
3) A recent article on AOL was titled “Are Appraisals The New Organized Crime”. The author stated “In 2006 and 2007, the appraiser did 262,000 valuations for Washington Mutual over an 18 month period, and had a total $50 million in earnings, Bloomberg News reported.” It actually was WAMU and the AMC (eappraiseit) that earned the $50 million, not the appraiser, and that’s according to Bloomberg. Per a 2008 FBI report at least 66% of mortgage fraud occurred at the application stage. An appraiser’s only interest in bad valuations is the promise of steady work at $400 per appraisal. Appraisal fraud is case by case and not industry wide as Cuomo and others would have you believe. Instances of a high percentage of appraisal fraud can be attributed to very few appraisers as so aptly illustrated in the above story and 262,000 fraudulent valuations by one group. 262,000 appraisals in 18 months is 20+ appraisals/hour, without rest, for 18 months!
4) Pres. Obama on TV recently stated that the cause of the financial meltdown was loose lending and borrowers that gamed the system. That shows how out of touch he is! Does anyone really believe the banks excuse when they said that they thought prices would always go up? I don’t. We know the banks were hedging (shorting) the exotic instruments they were creating and selling, so they didn’t believe it either. The financial terrorists gamed us. Absolutely none of those bad loans would have gone through with proper risk assessment. Banks assumed no liability in the loans they wrote and so had no need for underwriting. The blame is 100% with the banks and their greed.
Dave Biggers of WINTOTAL issued a report showing typical fees county by county across the country. Don’t let AMC’s dictate FHA fees! Be the professional!
Thanks
Ed
Ed Connor has 20 years appraising experience and is a recent member of AGA (American Guild of Appraisers). He is the President of Connor Appraisals, Inc. located in Olympia, Wa. Ed can be reached at 360-754-7044 or [email protected].
