An article came out yesterday in the San Francisco Gate that addressed how appraisers were “pressured” to inflate values on properties they appraised. What, did brokers hold guns to their heads to force them to over state property values? HELL NO!Appraiser were in on the scam and just as guilty and greedy as everyone else.
These cats were doing 4-5 appraisals a day making on average $400 a pop. Yes, it adds up quick. $2,000 a day, $10,000 a week, $40,000 a month. Half a $million a year! That’s some big money and not too bad for a little number cruncher and paper pusher.
Congress needs to put some regulations on these little whipping boys that are off to the side saying, “He made me do it!” That’s complete BS.
Brokers get thrown under the bus, yet again:
“In a nationwide survey released early this year, 90 percent of 1,200 appraisers said they had felt “uncomfortable pressure” to adjust property values. Mortgage brokers were named as the most common culprits, followed by real estate agents, consumers, lenders and appraisal management companies. The increase in pressure was dramatic compared with that found in a similar survey in 2003, when 55 percent of appraisers reported feeling pressured.”
{ 10 comments… read them below or add one }
HEY… let’s get something straight… it is not just a Pontiac Firebird… it is a 1995 convertible TRANSAM… though you’re right about having no A/C… plus one headlight that requires me to go under the hood to turn it on… and it leaks oil… but I really love that car.
- Paul
(And yes, paybacks coming for ya Moe)
Yes, Transam, It’s fast yes, but stop leaking that oil in my driveway. I knew you’d like this. But hey it’s the truth.
I take great offense at your sweeping generalization that appraisers were in on the scam. I am an honest appraiser and can tell you that I have lost plenty of business because I wouldn’t play the game. The way the system is set up, if you don’t hit the number that the lender wants then you are blacklisted from getting any more business from the lender. For years the appraisers have urged the Feds to establish regulations to prohibit the lender from having any contact with the appraiser and that appraisal orders should be sent to a central registry which then assigns the appraisal to an appraiser who has enrolled with the registry. The Mortgage Bankers Association and all of the other real estate lobby have consistently opposed this because they knew that it would stop them from exerting pressure on the appraiser. After the savings and loan debacle 20 years ago, the Feds required appraiser to be licensed in the belief that would prevent appraisal fraud. The problem is that they still allowed the lender to choose whichever appraiser they wanted rather than isolating the appraiser from the lender. Now we see history repeating itself. Don’t blame the appraiser who is at the bottom of the totem pole. The simple fact is that if the appraiser doesn’t play ball he won’t eat. There are plenty of laws on the books that should prevent mortgage fraud. The problem is that they have not been enforced.
Appraiser were in on the scam. Plain and simple. Yes, many were ethical and honored their fiduciary duties as licensed appraisers. But many more did not. When I make a sweeping generalization, that is because I know exactly what went on and I have many, many, many friends and associates that have first hand knowledge (they are appraisers and AE’s, brokers etc.) of what appraisers have done over the years and it wasn’t ethical business practices to say the least. It was quite the opposite.
Again, not every appraiser should be classified in the category. As with brokers and agents etc.
The low man on the totem pole?
I disagree. Based on the numbers above and the volume, it was like fast food appraisals. $100-$150 an hour isn’t too bad and definitely not what I would consider a low man on the totem pole. Yes, when you look at it on a per job basis yes. But your appraisals were what would make or break deals for the others that were in on the scam. Pushing values higher and higher. Causing the massive bubble we see now.
You bring up some great points and you seem like you were one of the ethical ones.
I also believe that they should be shielded form the lender and broker. That is a law that NEEDS to be passed.
I wholeheartedly agree with the fact that none of these laws were enforced and thus we are in WAY OVER our heads. Many heads will be placed on the chopping block and that will include appraisers, as we are seeing now.
Thanks for the comment.
RE: “The simple fact is that if the appraiser doesn’t play ball he won’t eat.”
For those appraisers who would use the above excuse… well, then by all means eat up… eat all the food you want…
but when you get food poisoning there is no one to blame but yourself and those who fed you.
- Paul
I certainly never made the kind of money figures you are citing. Of course I never worked for the mortgage mills either. If you have knowledge of inflated appraisals then you should file a complaint with the state appraisal board and with the Appraisal Foundation, FDIC, Comptroller of the Currency, HUD, etc.
One last comment, I don’t know any appraiser that can do 4-5 appraisals per day. My average time per appraisal is 4 hours (includes drive time). I think your getting a little carried away trying to make your arguement.
Hi! Lov eto see what you are doing for people. I am doing the same but on a much smaller scale. I have been able to help a dozen families keep their homes so far by beating these lenders and servicers at their own game.
It’s nice to see someone else out there that is truly trying to help and not use this to try to get rich by taking advantage of those in need. There is so much of that going on.
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