As a part of the new Home Value Protection Program, which goes into effect January 1st 2009, Lenders and originators will no longer be able to hire the appraisers directly, all appraisers would be picked at random form a pool through a intermediary.
Is this good or bad, there are a lot of good appraisers and loan officers out there that look out for the best of the client whomever that is, the bank or the buyer, this could become overkill and slow everything down, bad appraisers can hide in the system and become untouchable in their ivory towers, there will need to be strong oversight and an ability to challenge incorrect or dubious results.
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The though is ok, but as always, it is just not thought through all the way.
You need appraisers that know the area WELL
we just had a case in Harbourside one of the gated communities here in Pinellas County, the appraisal came in ridiculously low. When we investigated why, we found out that the appraiser was new to the business he was working and living about 30 miles away, he could not even find Harboursde and ended up on the wrong Island and he included a comp that was not even in the community (a few units sell in Harbourside every month)
Please !!!
Like a county inspector, the appraiser will now be focused on doing the job right -- not trying to keep the referrals coming in. Perhaps, this will cause sellers to be more realistic about the values of their homes.
Hey, Andrew. I am not sure this is great at all. There are plenty of great appraisers out there. Could you imagine them doing this to real estate agents; not good. Thanks, Jim
Is this nationwide or in just your state? I can't imagine this being a good idea...at least for the "Good" appraisers out there that are honest and have always slept good at night regardless of the market.
Rick Goates
Andrew, Very good observation. The process could also be slowed because of the bar to entry in the appraiser profession.
I think with everything that has happened in the lending environment that this new rule is understandable. This is similar to what is already in existance for VA loans. The problem is have any of you waited for a VA appriasal lately? You would think that that they are doing tons of business as they seem to think that they are doing you a favor by taking the order. I did a VA loan last month and here were the issues: 1) appraiser didn't respond in a timely manner when asked to confirm he recieved order and to commit to turn around time. 2) ALL comps supported sales price of $150k (there were 4 sales withing 30 days that were model matches between $150k and 155K). However he determined value to be $135k as the other comps were all foreclosures. hmmm.... 3) he charged $200 for a final inspection where all of my usual appraisers charge $50 to $75, and 4) he required the inspeciton to be paid up front instead of from escrow like most appraisers (I realize this must be becuase some flakey lender stiffed him in the past). I hope the new systems aren't going to be similar to the VA systems. I have to believe that appraisers will still want to do a great job and that my recent VA experience won't be the norm. I will keep my fingers crossed and will hope for the best.
Unfortunately this is probably done for the good of the consumer but may end up hurting them. You are absolutely right many bad apparaisers can end up hiding in the system with little way to weed them out.
I do not agree with this at all. What will happen is the appraiser will not be in direct contact with the lender but rather a fee split appraisal management company that will control the amount of money that the appraiser is entitled to for his/her work. I do know that there are many dirty appraisers in the business, but what about the good ones like myself? The appraisal management company that consists of appraisers in the industry will still be in contact with the lenders. Where is the change?
I had an appraisal for a property in Arizona, it was reviewed by one of those national companies that do reviews. He came back with a condition that the title policy includes the "right of ways" for the canals. What????? and Oh brother..... He was from Florida.....
Oh he's thinking they'll be boats or ships in the canal like in Florida, these are irrigation canals ding dong. It took forever to get him to drop that condition.