Yesterday, I wrote about how good-intentioned folks can do the wrong thing...all chasing the almighty dollar. I've had numerous people over the years tell me that something ought to be done about this sort of deceit. I agree. But better men than me have taken up issues with the appraisal subcommittee only to be shot down...or put in a permanent holding pattern.
I often wondered why. I guess my first exposure to the answer was way back in 1992. I was just an apprentice appraiser then, working for my brother-in-law. He told me that there were a certain two or three appraisers that seemed to get all the work. I remember somewhere around '92 or '93, one of these top dogs was put on a "watch" list by a major lender because of the number of mistakes that were being made on his appraisals. These mistakes significantly impacted values; and usually, these "mistakes" made the houses appear more valuable than they actually were.
Now as it happens, our office was asked to perform an appraisal on a house owned by one of that particular lender's main officers. My bro-in-law thought it would be a good time to try and find out why so much work went to one or two guys in the business. So, after we inspected his house, we had a "sit-down" with the owner and had a nice conversation. My bro-in-law mentioned that he knew that one of the lender's favorite appraisers was on a watch list and wanted to know if that had impacted their business. The officer informed us of something we didn't know.
(This isn't verbatim...but you will get the gist.)
Officer: "*** has been put back on our approved list."
Bro-in-law: "Really? I thought he had some significant problems on a good number of appraisals."
Officer: "Yeah, but we were asked to put him back on the list by someone higher up in the corporation. No, let's just say that we were instructed to put him back on the list."
Bro-in-law: "Why?"
Officer: "Don't ever forget, it's all about the money."
He conceded that his company was willing to accept inferior work in order to "capture" the almighty dollar. Oh, but how allusive the dollar is. It's always one step ahead...right out of reach.
Over the past fifteen years, the number of liars and the extent of the lies has grown exponentially. I know of several appraisers that have had their work sent to the state subcommittee for review, but none of the local guys have received more than a hand spanking. In fact, I only know of one guy in the whole state of Louisiana that had his license taken away. But it was only for three years; and, trust me, this guy was bogus. He's probably back in business now.
Why? Because it's all about the money. Take a look at this excerpt from a recent article about the Appraisal Subcommittee. The new head didn't need but one day on the job to determine that things were seriously out of hand.
The performance of the Appraisal Subcommittee was among the subjects detailed in a six-month AP investigation that identified key failings in the nation's regulation of appraisers.
The AP found that since 2005, more than two dozen states and U.S. territories have violated federal rules by failing to investigate and resolve complaints about appraisers within a year. Some complaints sat uninvestigated for as long as four years and as a result, hundreds of appraisers accused of wrongdoing have remained in business.
Congress created the Appraisal Subcommittee nearly 20 years ago after concluding that faulty and fraudulent appraisals were an important contributor to the savings and loan crisis in the 1980s. It's main function is conducting field reviews and audits to ensure states are licensing appraisers and disciplining those who break the rules.
Source: Mitch Weiss, Associated Press Writer
Article: "Appraisal agency's new chief quits after first day" Published 10/28/2008
http://www.blueridgenow.com/article/20081028/NEWS/810280277/1170
Interesting how things change when you dangle a dollar in front of someone's face, huh?
2 comments:
Don't forget the gun that was pointing at the head of every bank in the nation by congress. As far as sub-prime goes. They pressure the banks and the banks pressure the appraisers..not to mention the seller and the agent. Congress trying to buy votes, the bank trying to buy other banks and keep the share holders happy, the agent trying to be the top dog and make payout and the honest appraiser if he wants to buy food and heat better buy a dull conscience.
What upsets me most is the common folk like us have to end up paying the price for all that dishonesty. It's affecting my money now! What would have happened if Congress hadn't passed the bailout bill?
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