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Matt: (October 28, 2009 3:53pm)

Hark, I didn't say "Comp check" I said "Comp Check appraisal" IE. a formal appraisal reported verbally iaw. USPAP 2-4. I use a range of value of the best comps I would be using if I did a 1004 and report high low and average. The Lender/Client signs an agreement in writing regarding nature and scope.... 1st 3 para as follows: PURPOSE OF ASSIGNMENT: Comp Check Appraisal. Client understands that each Comp Check performed constitutes an appraisal which must conform to the Uniform Standards Professional Appraisal Practices (USPAP) and Federal and State standards INTENDED USE: The client's intended use is to aid in making an informed business decision regarding loan feasibility on residential property. INTENDED USERS: The client only. NOTE: The client is considered to be a regular user of appraisal services and is familiar with appraisal issues and limitations.

Hark: (October 24, 2009 11:01am)

Matt, USPAP 2-4 '...an oral real property appraisal report must address the substantive matters set forth in Standards Rule 2-2(b).' and that's all the stuff you do for a full appraisal anyhow. To me a comp check is a 'comp check' - A list of recent sales. The client then has to make the judgement as to whether they can 'hit the value' they need to float their loan. As soon as you utter a 'value', even in a casual conversatrion with your neighbor over the back fence, you've appraised the property and can be held liable for your opinion of value. I get calls like; 'If you can come in at this value I'll order the apraisal'. This is the pressure that started the HVCC bs and should be made unlawful.

Hark: (October 24, 2009 11:00am)

Matt, USPAP 2-4 '...an oral real property appraisal report must address the substantive matters set forth in Standards Rule 2-2(b).' and that's all the stuff you do for a full appraisal anyhow. To me a comp check is a 'comp check' - A list of recent sales. The client then has to make the judgement as to whether they can 'hit the value' they need to float their loan. As soon as you utter a 'value', even in a casual conversatrion with your neighbor over the back fence, you've appraised the property and can be held liable for your opinion of value. I get calls like; 'If you can come in at this value I'll order the apraisal'. This is the pressure that started the HVCC bs and should be made unlawful.

Hark: (October 24, 2009 11:00am)

Matt, USPAP 2-4 '...an oral real property appraisal report must address the substantive matters set forth in Standards Rule 2-2(b).' and that's all the stuff you do for a full appraisal anyhow. To me a comp check is a 'comp check' - A list of recent sales. The client then has to make the judgement as to whether they can 'hit the value' they need to float their loan. As soon as you utter a 'value', even in a casual conversatrion with your neighbor over the back fence, you've appraised the property and can be held liable for your opinion of value. I get calls like; 'If you can come in at this value I'll order the apraisal'. This is the pressure that started the HVCC bs and should be made unlawful.

Matt: (October 23, 2009 11:47pm)

"Comp Checks" are illegal. "Comp Check Appraisals" done in accordance with USPAP are NOT!! Yes they can be done (Reference USPAP 2-4 regarding a verbal report)and there are many benefits to all concerned.

JUST ASK: (October 23, 2009 6:41am)

I keep seeing these two complain that the appraiser did this and that and the Realtor was taken by surprise. Two things stand out here. First, the Realtor is not up to speed on the entire process of an appraisal and how it can affect his/her transactions and business. Second, is a simple fix. Open a conversation with a Certified Appraiser. Ask questions BEFORE you list. If the Appraiser is not willing to help you up front, NEXT. Appraisers with knowledge can offer advice and guidance without giving a verbal value. Rather than complain about it AFTER the fact why don't you ask BEFORE there is a problem. A little cooperation goes a long way.

HOT LADY APPRAISER: (October 22, 2009 11:40pm)

What's with all the talk about appraisal fees? The appraisal fee is insignificant in terms of the losn transaction and other fees. In addition, the AMC's (appraisal processors) are taking as much as 60% of the appraiser's fee paid by the borrower, without disclosure and the appraiser's authorization. Mr. Mortgage Broker, how would you react to your "loan processor" taking 60% of your fee and putting it his/her bank personal account without your authorization? If this continues, there will be no mercy for those continuing to pressure and influence State Licensed Appraisers for personal gain. Your days are numbered, as appraisers are in a unique position to document, expose & make transparant your "behind the scenes" improper activites, to those tasked with oversight and enforcement. And, you should to stop referring to appraisers as "your" appraiser trying to act like big shots, as you do not paid the appraiser's salary or provide them with employment benefits.

judy4: (October 20, 2009 1:55pm)

Loanwise, where have you been? You must be one of the good guys appraisers fight over to have as a client.

Loanwise: (October 20, 2009 8:40am)

Comp Checks???? Why do you need an appraiser to do these anyway. Get off your arse and get MLS or have a title company run specific sales in the APN pre-fix area. There are many areas for you to check comps for yourself and your client!

Valuequestor: (October 20, 2009 3:04am)

Wow......I'd say half the appraisers that commented today shouldn't have. Read yes...listen yes.....don't open your mouth and prove your lack of knowledge. You had the correct answers right in front of you to read yet so many stupid comments were made. I'm so tired of having to follow idiot appraisers into offices and explain how it REALLY is to the never ending parade of hot shot newbie whiz kid loan officers and brokers or even worse, seasoned vets that should know better.

Starving Appraiser 2: (October 20, 2009 1:42am)

I am an appraiser and although enforcing the no comp check rule would be great, it will be nearly impossible as it is very difficult to regulate. There will always be appraisers who will do comp checks and the appraisers that won't do it will lose their clients to the appraisers that won't. it's sad but very true.

Anonymous: (October 19, 2009 8:47pm)

Really, you could talk to actual appraiser.

Starving Appraiser: (October 19, 2009 8:12pm)

Doing apprsls for 25+ yrs and I can AVERAGE 1 a day (5 a week), but anything more results in poor quality, guaranteed. NY on THANKSGIVING DAY, hhhmmm don't think Cuomo will be in his office, probably @ home eating Turkey/himself if we're lucky. As stated, gather as much info as possible & take comps w/you & an MLS list for the area w/larger & smaller comps just in case they're needed. Saves a lot of time. I also rarely make multiple trips. DON'T agree with using MLS photos or photos of similar property...that's fraud & will cost you your license when & if you get caught. Back from softball and WE WON!!!

SimpleSolution: (October 19, 2009 7:59pm)

I also could only do two full reports in a day. Including inpections, photos and data entry. Hell the 1004MC also takes forever...Any more than two in a day would be bad quality. Again I have done 4 inspections in one day but the reports were not done that same day.

CindyP: (October 19, 2009 7:58pm)

Thanks for clarifying comp checks. You guys are going to start having more credibility with appraisers. As you really got the dander up last week with your show regarding com checks. Your video got passed around on a couple of our forums with some negativity. with Hey, why don't you interview an appraiser once a week and bring up industry issues? Invite a really well respected appraiser like, Steven k Smith (CA), Patrick Eggers(NV) or Mike Kelley(C).

CornerstoneKathy: (October 19, 2009 7:23pm)

Hey Brian ..that was a nice roof!! I have to tell you the last time I called for a roof cert I was walking up to the door and the shingles were all in the neighbors yard, in his shrubs, on the sidewalk ...at least he took the blue tarp down before I got there!!

CornerstoneKathy: (October 19, 2009 7:19pm)

Cmon Ezra of course we are still up I got 10 more comp searches to do and Lord knows that damn AMC is gonna want all 8 of the jobs I saw today back tomorrow am!!

Ezradams: (October 19, 2009 7:09pm)

Hey Jersey Girl, just got off the phone with CornerstoneKathy....I think we're all up too late here on the East Coast. Dan

ALApprazer: (October 19, 2009 6:38pm)

Oh, and the working together thing. Fact is, we all need each other. That is just reality folks.

ALApprazer: (October 19, 2009 6:36pm)

We are all under the microscope these days. Lenders, brokers, appraisers. In 15+ years of appraisaing I have seen the good the bad and the very, very ugly throughout our whole industry. I understand your plight Brian. I have a broker client who is the hardest working and most ethical I have known as long as I have been in business. They are currently dealing with audits and much more. Sad situation, hudg waste of time and lost money. I have known many others who deserve what they are dealing with but have avoided detection. At least so far. If we just booted HVCC and other new regs., and beefed enforcement that would solve all these issues.

Jersey Girl: (October 19, 2009 6:33pm)

Brian TBWS: I've done up to 5 in a day but that is inspection only...typing the reports, getting the data verified, taking comp pics, and researching comps on each one takes hours...you may be able to get 2 full appraisal reports done in one day if the properties are close to you (and each other), if the data is readily available on a public source (which usually isnt't), and they are both cookie cutters...which is rare these days. ;)

Central Valley: (October 19, 2009 6:04pm)

Brian - You are correct to a point... It's like the perfect loan that you can get closed in 15 days. It happens but, not very often. As regulations/guidelines keep changing it becomes more and more time consuming. Yes, there are a lot of appraisers out there right now that are doing four a day but the quality??????? And, I agree, we should be working together rather than against each other.... I also will talk any time...

Ezradams: (October 19, 2009 5:59pm)

Depending on where you practice (population density, availability of good comparables, well supported MLS system), it was possible in the good old days to complete 2+ very well supported and complete appraisals per day. (4-6 sales per report all with actual photos, etc.) In my area, I usually only drive 15-20 minutes to each property and comparables are also usually within 1 mile of subject. This is not uncommon in New Jersey if you only cover a few counties. Plus, when things were busy, it was possible to schedule all appointments near each other. Some things are a little more difficult now but two jobs per day is still possible if proper planning is done beforehand. Always take extra Comps. with you, or better yet, a laptop with MLS access....and never make an extra trip for comparable sales inspections. Good prep is key.

CornerstoneKathy: (October 19, 2009 5:58pm)

James ..just a thought.. but when I call to set the appt I get as much info about the house as I can and try to pull the comps before I go so I can take the comp pics while I am there..RARELY do I have to go back to get more pics and quite honest I would just copy and paste the pics out of the MLS or find something in my old database that looked real similar as long as the house number wasnt glaring on it!! OK I guess thats cheating

CornerstoneKathy: (October 19, 2009 5:53pm)

Brian ..we're going to Cuomos office on Thanksgiving?? I am thinking he might not be there!!

brian tbws: (October 19, 2009 5:40pm)

Hi James, I knew that response was coming. If any appraiser says they NEVER did more that 2 appraisals in any day...... is full of it. Sorry not a personal attack but the simple truth. AGAIN, I'm not about being self-righteous, just honest. With that said lets have an honest dialogue not a filtered one.

James the Appraiser: (October 19, 2009 5:22pm)

brian tbws - if an appraiser does a complete report with all the research he can not do more than 1 in a day. Even if the drive-inspection-drive is under 1.5 hours when you add in reasech, report writing and a return trip for comp photos it takes all day, and that is if you know the area. Any appraiser that tells you he can do 2 reports in 1 day is not doing any thing more than filling in the blanks - want to talk - james@prattsappraisals.biz

brian tbws: (October 19, 2009 5:18pm)

Hi Judy, Because an appraisal fee is guaranteed. You get it no matter what happens. Also you can perform a number of appraisals per day. The LO's fee is not a foregone conclusion and the time involved is much more extensive and draining. But the bigger question is "why is there so much animosity coming from the appraisal community. There's a real Jan Brady "middle kid" complex going on. If we were to look at our professions as a team we'd do a heck of a lot better. I've wondered why the appraisers dont have a unifying voice in the industry but I'm starting to understand. I mean no disrespect its just some constructive criticism. Let the blog dismantling begin!

James the Appraiser: (October 19, 2009 5:15pm)

and the county to the south has 3 cities, 15K, 10K and 8K, so the drives in that county area even longer some times, I live of the county line too

James the Appraiser: (October 19, 2009 5:10pm)

the 2 hours was round trip, and in a county with only 1 city over 100,000 we often have round trips of 2 to 2.5 hours to rural properties

judy4: (October 19, 2009 5:08pm)

simple, youre saying that the states require x amount of whatever to be competent as an appraiser, and I agree. Unfortunately for those just entering the business many AMC's are requiring an appraiser to be licensed 2-3, sometimes 5 years. I have been in the business a while and have been told multiple times that I have to complete a new course, new test, whatever it may be top do certain loans. The different levels of requirements have to stop and the ability to perform an appraisal has to be standard issue from governing agencies. If there is no agreement on "what it takes" to be an appraiser, why is there any agreement on "what it takes" to have a good appraisal. My son entered the field a few years ago and he has been given the runaround by so many people its rediculous. For his future benefit, I say 3 appraisers get paid for each loan, a better value understanding is reached, and just like the bailouts it will take $ to straighten things out. $1000 for an accurate value might work

judy4: (October 19, 2009 5:01pm)

$100-150 an hours. Thats an acceptable fee in my area for expert witness testimony in court. Starts the time I leave my front door to the time I walk in. And honestly, sounds like a great idea for traditional appraisal work.

SimpleSolutin: (October 19, 2009 5:00pm)

If three appraisers are working on a report they will all expect to get paid. That is why a trainee is required to have an AR review and sign their reports and lets hope after 2000 appraisal hours, an additional 150 hours of continuing ed and another state exam that a licensed appraiser should know what the heck they are doing without a need for two other appraisers. Doesn't make sense.

judy4: (October 19, 2009 4:52pm)

dont make the borrower pay for three appraisals, make the borrower pay for one accurate value from the work of three appraisal. its the biggest investment of most people's lives, why is it owrth so much less than an LO fee?

thingsarentalwayscheap: (October 19, 2009 4:50pm)

james, a silly idea may be driving 2 hrs to an appraisal, even if you are competent, then having to drive back again. as an appraisal 3 opinions sounds great and would eliminate all the LO complaining about "different opinions", the only thing they WILL complain about now is the cost they dont even pay for. If its not one thing with these guys its another. Lo's what do you get paid for each appraisal? when ordering 3 appraisals we are probably asking for less than your fee, the liability, and one thrid going to each. Start charging $500 flat fee for a loan, have some of that skimmed from and AMC, and then you can complain.

James the Appraiser: (October 19, 2009 4:41pm)

BROKEAPPRAISER - ha, I would love to charge by the hour, lowest fee I have taken all year is $325. But the report I am working now took me 2 hours of drive time to the remote location. Then I will drive back for comp photos, 2 more hours. Add in report writing time, research and the like and your report will cost $800 minimum, maybe more. Can you send me your next FHA, I will be happy to do it by the hour for you.

BROKEAPPRAISER: (October 19, 2009 4:37pm)

WHY NOT JUST PAY THE APPRAISER A DECENT WAGE. I ESTIMATE THAT $100.00 AN HOUR WOULD BE A SUSTAINING WAGE TO STAY IN BUSINESS. LET THE SMALL BUSINESS PERSON MAKE A LIVING AND ALLOW ENOUGH TIME FOR THEM TO DO A COMPETENT APPRAISAL ASSIGNMENT REPORT. COMP CHECKS ARE NOT ILLEGAL, BUT THE LIABILITY IS THE SAME AS DOING AN APPRAISAL REPORT. PAY BUY THE HOUR AND ORDER WHAT YOU WANT. DON'T WORRY APPRAISERS ARE TO STUPID TO CHARGE AN HOURLY RATE THEY WOULD RATHER FIGHT OVER A $200.00 APPRAISAL FEE!

James the Appraiser: (October 19, 2009 4:34pm)

Silly idea, make the borrower get 3 appraisals. Most are already out for 2, the original and a review appraisal. What great thing can come from getting a 3rd one?

SimpleSolution: (October 19, 2009 4:25pm)

Uummm...three appraisals is not a good idea. Who is going to pay for them??? What if a bank required that a borrower go to three different brokers and required to see docs from all three to make a decision....

opp219: (October 19, 2009 4:19pm)

see what the buyer qualifies for, make a bid within that value range, then order three appraisals for the property after a thorough review of the contract sales price by each appraiser. i dont know, the whole damn system is broke, screw everything. the 3 appraisals actually doesnt sound to bad to me for certain situations.

brian tbws: (October 19, 2009 4:16pm)

Stingray, Thanks for your level headed and reasonable response. However you do not have a monopoly on liability, license revocation, rule changes etc. Trust me I know. I'm a licensed lender that has been under siege for the past couple of years. I'm aware of every foreclosure that I've participated in. The FBI has 2 full time officers in my county to look at mortgage fraud. So I get it. In fact our industry gets it. Here's what I think is missing from all the blogs I've read over the past couple of months. Everyone talks about the industry problems as if its a personal attack on THEM, not the industry as a whole. I think if we could unify our voice and quit trying to lay claim the "the largest victim" then we may get somewhere. Lets all work to that goal. Oh, were going to Cuomo's office on Nov 26. Yes we're doing it. In between now and then lets ALL be constructive with our comments and actions. Lets all work toward reform and necessary industry correction.

okwithok: (October 19, 2009 4:09pm)

the appraiser should get paid more than the guy who mows the grass and trims the bushes. how about allowing a comp check system of the 3 appraisers being used. do this value fall within range of.....with a minimum range value. clueless, this would give the homeowner the best range value, didnt you say that LO'S want whats best for the consumer ibn the end? A great value would satisfy that. how about requiring LO's to see if they are within reason on a value, this could also eliminate any clueless Lo's.

Stingray: (October 19, 2009 4:06pm)

Frank and Brian, you're right, we are a touchy bunch. Nobody understands what we deal with when it comes to all of the rules and regs required of appraisers. You might say we are all in a perpetual state of "pucker" due to the liability or the threat a liability, fines, license revocation, rule changes, etc. Techinically speaking we can do Comp checks all day long as long as we maintain a work file for each one. The caveat is, we cannot then accept the assignment because by doing so, we have accepted it upon a pre-conceived determination of value. It's been a very difficult situation for us for several years now. A value check before completing an assignment makes perfect sense, but as Appraisers, our hands are really tied.

SimpleSolution: (October 19, 2009 4:01pm)

Cluelessdad and real appraiser-I agree also. Not a solution. One appraisal should be solid enough...to say three appraisals are needed is saying that we as appraisers don't know what the heck we are doing...

real appraiser: (October 19, 2009 3:55pm)

Clulessdad, even as an appraiser, I am going to agree with you on this one. Anytime anyone has to pay for three opinions and there may be no chance in hell of getting a loan, I am going to say its wrong. that is not the solution and I do not want more reasons to hate the appraiser.

Clulessdad: (October 19, 2009 3:51pm)

Anyone wnat to try to convince a borrower that they need three appraisals, at a cost of over $1000 on the off chance they can get a loan? As the borrower, wouldn't each of you appraisers want something a little more concrete than "you pay for 3 appraisals and then we will see what we can do."

7655MI: (October 19, 2009 3:50pm)

james, all independent, all fair opinions, less heads on the line as it is coming from multiple points of view. I think F and B could use this as a major weapon. The fees may be a little lower, but the work is multiplied. Who is at disadvantage with this system?

real appraiser: (October 19, 2009 3:49pm)

A question for all brokers. When/If HVCC ends in 11/2010. If you can order the appraisal directly and the lender can sell it on the secondary, would things fall back into place. I want to know if you see anything that would stop the old process of taking place, eventually, after all the misinformation and fear dies down, would the lenders go back to the old system, if the secondary can buy (AMC or non AMC ordered appraisal) loans? Does this make sense? I would think certain markets would be created, and if financially succesful, others would follow. Does anyone have a different opinion? I would think that the success FHA had at the start of HVCC would been seen for the first lenders that actually sell their loans to fnmae with appraiser/broker communication. This is not to say " lets not fight HVCC", I just want to have other hopes to hang my hat on in case.

Starving Appraiser: (October 19, 2009 3:47pm)

Clue - very IMPORTANT observation....HHHMMMMM!!!!

Starving Appraiser: (October 19, 2009 3:47pm)

Clue - very IMPORTANT observation....HHHMMMMM!!!!

James the Appraiser: (October 19, 2009 3:45pm)

Starving Appraiser - Ha Ha, sounds like you have been down this road before

FinanceLogic: (October 19, 2009 3:45pm)

James, the ex just lost her best friend and now she's lonely and needs your compassion. I say.... Don't get sucked in, it'll just be the beginning of a bad ending. ;-)

James the Apprasier: (October 19, 2009 3:43pm)

7655MI - as an apprasier I love it. It would also show the lender problems with the property. If there is a problem one appraiser may over look it to keep the report clean, but if he knows that two other apprasiers are putting in reports then he will note the issue as he will not wish to be the only one of three note to note it, ha

Starving Appraiser: (October 19, 2009 3:37pm)

James-should probably tell the current about it anyway. Wouldn't want it to bite you in the ars later and may not be the the last communication from the ex. Just my opinion. LOL

7655MI: (October 19, 2009 3:35pm)

order 3 app's for each property, get a range of values-defendable, and let the lenders decide how they want to lend on the situation. This gives the appraiser work, LO's a better range of values from liberal and conservative appraisers, and the lender a good range of opinions and good guidlines to lend within. any one disagree or see any problems with this, other than the cost for the consumer?

coach: (October 19, 2009 3:35pm)

Im an appraiser, have been for 23 plus years, yes comp checks are a no-no; however It is a real part of Real Estate Loans. More so for todays market of declining values, we all are in the business to make money and the "Professionals" who are going to be in the business with repeat customers do what is in the best interest for the customer, thus calling your appraiser to see if a property is even in the ball park should not be against the law. This is and has been a fee service appraisers have through the years provided to the brokers. It does know one any good to have a borrower looking for a loan, wait for 45 - 60 days and hear that the appraisal did not make value and is not even in the ball park for a Hvcc 600 Fee. A comp check could stop the loan before it begins and saves the consumer money and hours of waiting for what was a No at the start. When the value might be there the broker being a professional can spend the customers money wisely on a full report. my two cents.

James the Appraiser: (October 19, 2009 3:30pm)

ok, 4 great photo of the inside of a garage, a peice of art to be sure, now e-mailing off to the lender, ha ha

aaron545: (October 19, 2009 3:29pm)

I CAN SEE WHY YOU MAY BE FRUSTRATED OVER NOT USING THE SAME DATA, BUT AGAIN I HAVENT SEEN THE SITUATION.

Clulessdad: (October 19, 2009 3:28pm)

Funny how the the expiration of HVCC coincides with the 2010 elections.

aaron545: (October 19, 2009 3:27pm)

finance, I obviously dont know the neighborhood or area but I can see a few issues. The non-arms length transaction between family prob used comps that were "arms-length" themselves, so no issue there. If the property was WAS listed on mls, was it taken off and then sold to the family member, that would definitely send some quations into the air on arms-length. County tax value could be far different from todays "market value", this is why so many people are challenging their counties with independent appraisals to lower their assesed values and essentially lower their taxes. "almost identicle" I cant comment on, almost identicle may mean something totally different to an appraiser than to you or anyone else. If all the sales in the neighborhood are foreclosures, that may indicate a market value and should always be taken into consideration. In many places, foreclosures ARE the market. The house that sole for 184k may have had a 20k return under the table the next weekend at breakfast.

Starving Appraiser: (October 19, 2009 3:18pm)

Real-the cleansing you refer to is eliminating the good appraisers unfortunatley. By 11/2010, AMC quality could be the norm. AMC=ANOTHER MORTGAGE CRISIS!!! Finance, if it meets the requirements of an arms length transaction, and you indicate it did/does, it could be a possibility. Not ALL rltv-rltv sales are hokey, but MANY are and extensive support must be presentable when using them. Sounds like you have a good point.

James the Appraiser: (October 19, 2009 3:18pm)

E-MAIL from the EX, how nice, we have been apart for 26 years. She felt she needed to tell me about her dog passing away. Gee, I did not know she was so attached to me after all this time. Good thing my wife of 20 years is not home to see my e-mail, best to delete this one, ha ha

FinanceLogic: (October 19, 2009 3:10pm)

Let me also add that the relative-to-relative sale WAS listed in MLS. The way I see it, If the data is there and accessible, and those buyers were able to get financing based on a legitimate appraisal supporting that $184,900 sales price then I should be able to refinance the neighbor's house (my borrower) based on that same data. Wouldn't you all agree!?

real appraiser: (October 19, 2009 3:08pm)

Starving Appraiser and anyone else: If the HVCC ends 11/2010, even though the AMC thing will have been in process for some time. If there is no HVCC agreement, FNME/FRDMAC could buy loans that were non AMC ordered appraisals, would'nt it be in their best interest to go back to buying loans, regardless, with more focus on the quality of the appraisals/docs. I would think this would be in their best financial interests. Maybe this was just a cleansing sort of thing. It would seem to me, if no agreement exists, the power that be would do whats in the best interest, any comments?

FinanceLogic: (October 19, 2009 3:05pm)

JamestheAppraiser & aaron545. This refi was FNMA, thru AMC. County tax assessed value = $180,000. House across street sold for $184,900. 70 days ago and that home appraised for purchase price. So aaron you're telling me that it's ok to appraise that non arms length sale for their purchase price no probs, but 70 days later our house, almost identical can't use that as a comp, shooting for $180,000 value cuz appraiser can't use that comp (nor 2 others just outside the neighborhood that are similar in age/size). I don't buy it! How can any appraiser say that 2 foreclosures within the neighborhood IS the true value of every other house, and not take into consideration the one that appraised and GOT FINANCING based on $184,900 purchase price, plus 2 other recent non distressed sales just outside the neighborhood. Borrower has an 813 credit score, never will be foreclosed. It sucked that I had to pay for that 2nd appraisal and switch lenders to get it closed!

Starving Appraiser: (October 19, 2009 3:03pm)

Portability-just had an FHA cancelled last week cause buyer had changed lenders & original lender/FHA case # orderer refused to transfer without payment. That's the lender denying portability.

Starving Appraiser: (October 19, 2009 3:00pm)

I agree w/Real on the relative 2 relative comp. Can be very touchy. Must be exposed to the market for a reasonable time to start with & many of these transactions are never listed on the market. And as stated, who knows what tricks & treats transpired under the table between the family members. Very few within the family transactions are true arms length.

SimpleSolutin: (October 19, 2009 2:57pm)

James the Appraiser-Did the lender think there was maybe a non-permitted kitchen or bath in the garage? If so why couldn't they just ask you instead of insisting you take photos....that is just silly...

James the Appraiser: (October 19, 2009 2:56pm)

real appraiser - the reason the second lender wants thier name on the report is incase the loan goes bad. If thier name is on the report they can go after the appraiser, if a different lenders name is on the report then they can't.

real appraiser: (October 19, 2009 2:50pm)

FinanceLogic: As an appraiser the use of a sale within family members is a risk, too many things can go on behind the contract. I would probably agree not to use it unless I was sure I had all the data, otherwise you should pass on that sale. Yes I do believe we are blamed. just like I read about appraisals not being portable. This is a lender issue, they can use the report and lend if they want. But they wont for their own reasons. The real problem is another lender asking you to change, add or explain something in a report for another lender. THE APPRAISER CANNOT TOUCH the finished report for the new lender. This is not our choicce, but a specific rule. Sorry if this makes it impossible to be portable, but again, a rule put on us not one we chose. I have heard that this is to line our pockets, not true, at least for me.

James the Appraiser: (October 19, 2009 2:50pm)

FinanceLogic - ok, back with the photos of the inside of the garage, this was FHA and no AMC, just a dumb lender. What do they think they will see in the photos, I took one of each corner fromthe center of the garage, what a stupid trip I had to make.

aaron 545: (October 19, 2009 2:48pm)

finance, I can see why the home across the street was not used and actually it may have been really good appraising on his behalf. It may have been market value, I dont know, but I do know that when his liability is on the line, he may have done the correct research - according to the definition of arm's length. appraisers do care about homeowners b/c most them prob are homeowners themselves. Its just now that LO's are realizing that many of them didnt care about appraisers.

Clulessdad: (October 19, 2009 2:47pm)

buckYapp-I doubt it was the borrower. There is lot of pressure to satisfy the GSE's right now-They have run out of money, have very bad loan losses and finding any excuse to send these loans back to the originating lender. It is happening with all facets of a loan. In talking with my lenders, this pressure is horrendous right now. I am getting these requests for other loan aspects also. I just answer truthfully and give them any documentation they need. Period. I am sure that there was a logical reason why you chose not to use those additional sales. It sounds like you didn't do anything wrong and I don't want to tell you what to do. But sometimes it is easier and more effective just to give them what they want.

FinanceLogic: (October 19, 2009 2:32pm)

James the Appraiser, "do you think they are looking for a way to kill the deal and blame the appraiser." My answer: NO, I think I'm just being stuck with appraisers (via AMC) that don't care about borrowers, perhap cuz they get paid regardless. That appraisal containing foreclosures was just so wrong. I KNEW the value was there; I know the neighborhood. To make it more obvious, the appraiser stated that there was a recent non distressed sale right across the street from subject but he felt it was a non-arms length transaction since house was sold from one relative to another, so he felt it shouldn't be used as a comp. Are you kidding me!? He felt the need to add the comment and not use that sale!? I knew damn well that the 'non arms length' home appraised less than 90 days ago for THEIR purchase price which was our same target value for our refi, & also the county's tax assessed value for both houses. HVCC sucks; I can't afford to pay for numerous appraisals from differing AMC's!

Starving Appraiser: (October 19, 2009 2:32pm)

BYAPP-been on the phone w/that hmowner today. See prev post @ $230K AVM. Come to find out, the hmowner is a bldr, so seems to me he would have known it wasn't worth $230K/hadn't appreciated at that rate to begin with. But it got him what he wanted in 2003, so he was fine with it then. Also says he can't build it for that today-BS!!! Just makes your blood boil when they act like you know nothing. Will defend, my report, to the lender, against an AVM product anyday, but not to the howner. Will talk to them once or twice & then I'm done. You're right in your stance. Keep up the good work.

Starving Appraiser: (October 19, 2009 2:24pm)

Buck Yapp-ignore my comments, sounds like from your addl post, you've done the consideration & used the most comparable & defendable in the beginning. REPORT them to the hot-line---Oh wait a minute, that hot line hasn't been established yet has it? Probably never will be. POOR JAMES!!! The good guy getting stuck again!!!

buckYapp: (October 19, 2009 2:20pm)

starving, I see what youre saying, but the difference is this information was not unknown, it was known at the time of the appraisal and I chose not to use the homes as comps. My point, why do I need to argue this the lender over 4 months later? Are they pushing for a value? It was obvious that the homeowner felt I came in low. And also, how many times can a homeowner call and ask you about their porch being larger, paint being brighter, and proximity closer to the gas station before AMC tell them to stop calling?

Starving Appraiser: (October 19, 2009 2:10pm)

AGAIN - unrealistic to compare appraising to economic FORECASTING. See previous post re:use of factual data vs educated guessing. An apraisal is a "SNAPSHOT" in time, as of the effective date of the report, based on COMPARABLE market data within the prev 6-12 mnths. It's not even close to forecasting or guessing. BUCK YAPP - I think you should "consider" the data they provided & then tell them why the comps you used are more comparable, assuming they are/were. I think we are required to consider all data available, even if in retrospect. I was in a similar situation last week, agent supplied info that was previously unknown(agents hadn't returned my calls). I did reconsider and did increase the value, based on my own analysis of data, not pressure from the lending side.

buckYapp: (October 19, 2009 2:07pm)

clueless, i agree on being defendable. this is the first time I have seen an issue like this. Do you see a lot of stories like this, and do you know how the appraisers respond?

buckYapp: (October 19, 2009 2:03pm)

simple, they didnt ask any questions about the comps given in the report, they provided comparables that I think were given to them from the homeowner after he called me 3 times to complain that his house should be worth more b/c he is "closer to the gas station". After telling him not to call me is when the mysterious comparables were brought up. My main question is, after 4 months and the report is considered "complete" by this particular AMC's definition, would you tell them to take a hike or add comments on the comparables provided by whoever it was, given to me from the AMC. And would you do anything about the AMC's lies on my "request to be put on hold". I did as james the app said and told them to order another app, and they will see that my opinion is right in line.

Clulessdad: (October 19, 2009 1:59pm)

BuckYapp and James- This may be what is going on. Once a loan is funded, the loan is sold to FNMA or Freddie. Money is given to the originating lender and the servicing rights go to the GSE's. Once at the GSE's a new "underwriter" looks at the file for MANY MANY things. If even any question remains, the loan is sent back to the originating lender. Money changes hands. 3-4 months after a loan closes, I am asked to provide an additional paycheck stub, or bank statement. It is not unusual to have this happen. I am getting those requests and reacting very quickly to solve the problems to help the lender. If we all don't help them with these answers, they will have to hold the loan and their warehouse lines get all clogged up. No more money on their warehouse line will mean fewer loans funded. Be mindful that none of us are working in a vacuum. If an appraisal was solid and defensible 4 months ago, then it should be defensible now.

SimpleSolution: (October 19, 2009 1:56pm)

buck-If you can defend not using them then don't put them in the report and add comments in the report that the lender asked about comp 1,2 and 3 and these comps were not used because...

James the Appraiser: (October 19, 2009 1:53pm)

buckYapp 0 GREAT, stick to your guns my son. FinanceLogic - do you think they are looking for a way to kill the deal and blame the appraiser, back in 30, then post and let me know

buckYapp: (October 19, 2009 1:52pm)

simple, the comps provided in my report were the best available. those provided were not used due to various reasons that I can defend.

FinanceLogic: (October 19, 2009 1:50pm)

James the Appraiser, thanks for the play-by-play of your day. We were all wondering. HA!

buckYapp: (October 19, 2009 1:48pm)

james the app, I told them to take a hike and they said that doing this was "part of the appraisal process". I informed them that no this was not part of the appraisal process, funny-another example of the appraiser knowing the law. They then said "are you choosing to do no work for ****?". My reply was that I was more than willing to do new orders. I emailed the vendor manager today asked about orders in my area, she said that I was placed on hold "per my request", I asked her to send me a cc of my request which she could not provide. Is anyone else running into this? Although I lost a little business, what is right is right, and it felt pretty good to tell her she was wrong. If only I had a hotline to provide the email stream.......

James the Appraiser: (October 19, 2009 1:47pm)

FHA FUN - the Lender has come back and asked for a photo of the Garage/Shop. I pointed out that the single building is in the photo on page 12, it is a detached garage that is 32 feet wide across the front with a 2 car garage door on the left and shop space to the right, no interior walls. Oh, they see the photo and it does match the sketch, BUT NOW THEY ARE REQUIRING PHOTOS ON THE INSIDE ON THE GARAGE, WTF is up with that, could it be that they don't want to make this loan and are looking to the appraiser to give them so kind of reason, BACK in 30 minutes, I need to go take some INTERIOR PHOTOS of the GARAGE/SHOP OMFG

SimpleSolution: (October 19, 2009 1:46pm)

buckYapp-I'd better be able to have a good reason as to why I didn't use those comps provided and if I don't then I have not done my job competently and it will show. If I did the appraisal correctly then I shouldn't have to add those comps because they would have not been usable comps by our guidelines.

brian tbws: (October 19, 2009 1:44pm)

Hi Aussie Appraiser. Your right an appraisal is an opinion of value and its possible for 2 honest and quality appraisers to come up with 2 different values. I still think enforcing good exiting rules is a good idea BUT since thats not good enough I'd like to hear YOUR solution. Enough complaining lets hear solutions. Send them to brianstevens@lendscape.com

Starving Appraiser: (October 19, 2009 1:44pm)

Here we go - just apprsrd sfr for $202K, 2 comps in subdvsn, wi/100sf & sold in last 6 months for $206K & $202K. Subj purchased new in 2003 for $176K. Homeowner is screaming cause bank AVM apprsd for $230K in 2007 ($54k in 4 yrs, not in this area). Research shows NOTHING in the subdvsn has EVER sold for that $ amt/per sf, but I'm the 1 having to explain. This is how AVMs screw HOwnrs & encourage predator lending. Guessing HOwnr refi'd on the 230K and now is upside down.

FinanceLogic: (October 19, 2009 1:44pm)

Knowledgable PA guy, please don't say that this LO asked for, or created the idea of 'comp checks,' on the contraire my friend. A local appraiser solicited me and asked for my business MANY years ago. Part of his sales pitch was, and I quote: "free comp checks" in the metro area. HIS IDEA! So you better believe that I took him up on it. I would have never asked if he had not called me and first offered to do it, which in turn, made much of his metro competition have to offer the same. Blame the LO on your market but in my market the appraiser is to blame for creating that competitive edge known as "THE COMP CHECK."

James the Appraiser: (October 19, 2009 1:42pm)

buckYapp - Smile back at them and say NO. If they were deemed comparables at the time of the report I would have used them. If the comps are not comps tell them to get a retro appraisal from a second appraiser or have a review done, that will be at thier cost

Central Valley: (October 19, 2009 1:41pm)

Meow Meow - This time you have USPAP on your side. A reviewer is required to meet the same guidelines as the appraiser if they indicate/change a value. I would question the reviewer in regards to their lic. and competency to do what he/she is doing and then ask for their justification for changing the value (how did they comply with USPAP) in doing so. Turn them in to the State!

brian tbws: (October 19, 2009 1:41pm)

Hi PA Guy. if appraisers are all knowing and all omnipotent that you should at least be able to agree in the blog. Sorry "informed bunch" your proving my point. Still love you guys though! We're all under scrutiny too bad you cant see beyond your nose.

buckYapp: (October 19, 2009 1:39pm)

I completed a 1004 conv. refi 4 months ago, was paid for it by the AMC, and have not heard anything until today. The AMC gave me a list of comparable that at first they said was provided by the "lender", then changed their termonology to "underwriter". They wanted me to comment on why the comparables provided were not used, and if I felt that they were usable, add them to my report but "only if I felt they were usable". Appraisers, what would you do in this situation?

James the Appraiser: (October 19, 2009 1:37pm)

Meow Meow - Yes, there are required too, but as she is out of state all I can do it report her to the Texas licening board for appraisers. Do you think they will read a complaint from a California appraiser

SimpleSolution: (October 19, 2009 1:36pm)

Meow Meow-No they can not do whatever they want and behind that review should have been a licensed appraiser who again can be fined for performing incompetent appraisals. You need to report the review appraiser to the appraisal regulatory agency for the state they are licensed in. It is just people don't want to make the time to file the complaints. Here in CA it is simple. You can go on OREA's website and file a complaint. They have nothing to do with AMC's they are just the agency that regulates the licensed appraisers.

Clulessdad: (October 19, 2009 1:35pm)

Starving-You are right they should be the same, except that all appraisers don't think alike, use the same "comps", or have all the same available comps. You will get a HUGE variation with any of the above. I have seen it and every LO has seen it. HVCC assumes that all appraisers are equal, but as from George Orwell, "Some appraisers are more equal than others."

Knowledgable PA guy: (October 19, 2009 1:34pm)

Frank and Brian, "touchy bunch" should have been replaced by "informed bunch". My advice to you is to always ask an appraiser for the rules, we know them b/c we are constantly under liability and scrutiny. Looks like you guys have been mis-informed and never took the time to learn the rules, or simply ignored them. If LO's would have never "created" comp checks and constantly pushed them, HVCC would have never been developed. You guys created, and should feel responsible for getting rid of it. I hope you do.

Meow Meow: (October 19, 2009 1:34pm)

I just don't get is a review company like Core Logic allowed to calculate value however they feel like? Don't they have to follow the same guidelines as a regular appraiser USPAP or something???

James the Appraiser: (October 19, 2009 1:34pm)

Meow Meow - YES, Review Apprasiers get away with any thing. I did an appraisals here in N. California and it got reviewed by a person in TEXAS. I was able to show that she used the lowest 3 sales in the small city over the past 6 months to reach value. Lucky for me I did one of those properties and was able to use interior photos of the dump to show that it was not similar, so the lender tossed out the review. That was lucky for the buyer

SimpleSolution: (October 19, 2009 1:30pm)

Starving Appraiser-Well put together comment. I agree...

Meow Meow: (October 19, 2009 1:29pm)

I have an FHA purchase that appraised for 131K the contract was for 130K. The lender flagged for review. the reviewer used only 2 pending sales for value and one closed sale for 155K and brought it in at 115K. How is that allowable? I paid the lender to use a different review company and they did a drive by and it came back in at 131K. We fought the original review value because they based value on two pending sales that were bank foreclosures. While we were fighting it another comp sold at 129K so why wasn't the original review company required to follow proper protocol? Can they just do whatever they want?

James the Appraiser: (October 19, 2009 1:29pm)

Ok, Back from this mornings inspections and OMG, you all have beat the Comp Check thing to death, get over it. Without records held by the appraiser it is WRONG, but no matter what appraiser (so anyway) will always do them. Lets move on to some real questions about work that help

Starving Appraiser: (October 19, 2009 1:25pm)

Opinon of value is based on factual data (or should be), not a personal opinion/educated guess such as economist, so the comparision is not realistic. As stated, opinion(s) of value, based of factual market data, should be within a close range. They will vary slightly, but only a close range will be support by good data.

real appraiser: (October 19, 2009 1:24pm)

Clulessdad: two refis i had were poorly done appraisals and the sale of my house in 2007 came in 7k under contract. I had to redude sales price even though I figured sales price based on comps in subdivision, appraiser would not reconsider. All three were done by trainees and I had to live with the outcome. First refi I paid 800 which included a review. So yes, it sucks, and its more of a crap shoot than ever before with all the poor work being done, which is the real problem. I agree with you, I would prefer a broker who has a long relationship with his appraiser, more for the sake of trust between appraiser and broker than chance of fraud. the proble is how does the consumer know which one is which?

SimpleSolution: (October 19, 2009 1:17pm)

Aussiebroker-Yes it is an opinion but there are certain guidelines, laws and regulations to be followed (that weigh heavily on our conclusions) before the final opinion is delivered that some appraisers don't follow. In reality if most appraisers follow these guidelines we will all arrive at the same number +/- a few thousand dollars...

Starving Appraiser: (October 19, 2009 1:16pm)

REAL - how right U R!!! Keeping it real, in name & remark. Scary as hell, by 11/2010 rather HVCC expires or not, it will the norm and AMCs will be the fore front of appraisal process. Anything less would be viewed as a step backwards in the lending industry (just my opinion). Still think it should have been LPCC = Lending Practice Code of Conduct, which was the intent as far as I can tell.

joecolorado: (October 19, 2009 1:16pm)

the AMC will eventually get tagged by the States and have to pay a license fee to operate....where do you thinki THAT money is going to come from?....certainly not the AMC's pocket...I have a sneaking suspicion that they dont care whether they need to be licensed as the fees will be passed onto the consumer....The Appraiser...UHOH..

Clulessdad: (October 19, 2009 1:13pm)

Are there an appraisers out there that have personally gone thru the refi process recently? If you are a consumer and will have to spend $500 on an appraisal, wouldn't you want to kinda know what your property is valued, other than the high and low comps over the last 6 months? I don't know anyone that throws out $500 on a whim and a prayer.

LV USPAP Guy: (October 19, 2009 1:11pm)

Cluelessdad - Here's the deal. Appraisers are bound by USPAP which is the law. Appraisal is defined in USPAP as "(noun) the act or process of developing an opinion of value; an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services." Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value). The Conduct section of the Ethics Rule USPAP also states, "An appraiser must not accept an assignment that includes the reporting of predetermined opinions and conclusions. So the "ball-park" value that originators ask for is by definition an appraisal that requires compliance with the relevant portions of the USPAP and, depending on circumsatnces, may violate the Ethics Rule.

Starving Appraiser: (October 19, 2009 12:58pm)

"Where is FHA? While on the subject of FHA, I want to remind everyone that FHA issued 3 significant mortgagee letters on Friday, Sep 18th. I am told that some are calling it "Black Friday" because of the provisions. The MLs address "Appraiser Independence" & "Appraisal Portability." The first involves many aspects of the HVCC & the second addresses transferring an FHA appraisal from one lender to another. A third ML addresses the time limitations on an FHA appraisal. In the past, some FHA appraisal reports have been acceptable up to 12 months, particularly those on proposed construction. Those days are over; in the future the maximum life of an FHA appraisal is 4 months and they will not accept an "update." We have integrated these MLs into the ADR Volume 2, & anyone who already has an ADR Volume 2, you need to print these out and put them in the Mortgagee Letter Section. All FHA-Roster appraisers should be aware of these requirements.http://www.hud.gov/groups/appraiser.cfm

real appraiser: (October 19, 2009 12:58pm)

starving appraiser. So HVCC will end, it just means that how it is applied afterwords is anyones guess. This makes no sense, so I guess if you force fnma/freddie to fund the institute, why would they not continue with the basic HVCC principles. I believe this important so its removed before it just becomes the natural order of things. This has to be stopped before it becomes the standard.

SimpleSolution: (October 19, 2009 12:57pm)

Sorry for the typo on competent...LOL. I promise that I am more competent in my appraisals than in my typing...

SimpleSolution: (October 19, 2009 12:54pm)

FinanceLogic-Yikes ...that is a lot of money wasted to get one good appraisal. There has to be a way to weed that BS out...it sounds to me as if the appraiser was not compitent and that is a violation of USPAP so there should be something legally that can be done just not sure what...we as appraisers have to also as I am sure you read...LOL..have to obide by USPAP regulations....

Aussiebroker: (October 19, 2009 12:51pm)

I concur with Frank and Brian about the appraisal being only an opinion and like all opinions, is likely to be seen differently by different people. Ask 10 economists about their predictions for the economy and you will likely get 5 or so different views. Couple of years back I was doing a jumbo refi. My appraiser came in at 2.2 million which the client saw as conservative. I was with Wells retail and they decided they wanted another appraisal. The next person, one week later comes in at about 1.8 million. Same property, same week, yet a variance of 400k or 18% of the original value. I have had a number of cases of huge variances over the years. Who is right? It is merely an opinion, not a hard science, so everyone is right.

Aussiebroker: (October 19, 2009 12:51pm)

I concur with Frank and Brian about the appraisal being only an opinion and like all opinions, is likely to be seen differently by different people. Ask 10 economists about their predictions for the economy and you will likely get 5 or so different views. Couple of years back I was doing a jumbo refi. My appraiser came in at 2.2 million which the client saw as conservative. I was with Wells retail and they decided they wanted another appraisal. The next person, one week later comes in at about 1.8 million. Same property, same week, yet a variance of 400k or 18% of the original value. I have had a number of cases of huge variances over the years. Who is right? It is merely an opinion, not a hard science, so everyone is right.

FinanceLogic: (October 19, 2009 12:50pm)

SimpleSolution, these were appraisals ordered by the lender's AMC. In one case, I argued to the lender and they said that HVCC policy was followed so there was nothing that could be done. I'm not sure if filing an E&O claim is possible if I didn't order the appraisal directly. I guess that's another new gray area with all the changes. But the appraiser could argue that he did the job that he was hired to do. This is part of the problem, he's hired to perform a fast/lower priced report as compared to those good quality/thorough reports prior to HVCC. On one of the loans, I felt really strong that the value was there, so I switched lenders and paid for a 2nd AMC appraisal out of my pocket. The value came in $35,000 higher (not using foreclosures) and we were able to close that refi. On 2 other refis I didn't pay for a 2nd appraisal and the refinances died, even though the payment savings would've been $400 avg per month, savings that those homeowners could've put back into the economy!

Starving Appraiser: (October 19, 2009 12:48pm)

Real - sorry 4 the delay...reading the info & sending msg to tbws support. Here's the just of it ...>>> "HVCC has only 13 months to Go Mr. Alfred Pollard, General Counsel of the FHFA, gave an excellent presentation on the HVCC, including overall provisions and dispelling some myths, He explained that under the initial agreement with the NY Attorney General, the HVCC agreement will expire in November 2010. He advised, however, that he was confident that the general provisions will by then be formal requirements. FHA adopted essentially the HVCC provisions last month." <<<was a copy & paste. I get this from eVIP Appraisal News / evip@columbiainstitute.org. I find it very informative & will forward to U if you'd like. Several other items of interest included... YEAH CA. just joined in the few states passing legstltn to regulate AMCs., per this msg.

SoCalAppraiser: (October 19, 2009 12:44pm)

We can give you a range basically the highest and lowest comp that has sold within the past 6 months...

Clulessdad: (October 19, 2009 12:41pm)

As I read everyone's comments, I think that we all have a different definition of what is a "comp check." Let me very simplistic. Let me ask the question from a broker's perspective. I have a good borrower that needs a refi. He has no clue as to the value. He knows what it was 2 years ago. Forgetting about HVCC, what information can I get from an appraiser to help me evaluate whether or not I can get a deal done? If you want to charge me for it, OK. But what can you legally do for me that will 100% be compliant with USPAP?

real appraiser: (October 19, 2009 12:34pm)

Ezradams, You are mostly right in everything, I would be more critical of AI in that they are a profit orginization and only work for their members, which is fine, just sell it for what it really is. They only tried to use the HVCC to further their membership, not a good sales point for non members who they weakly indicate are not as good as members. I know both and view this as pathetic.

SimpleSolution: (October 19, 2009 12:33pm)

FinanceLogic-That is true and I hate to even hear that an appraiser has done that. Ther may be a way to get the money back from the appraisal. A lawyer would know better than I but appraisers carry E&O insurance and trust me they don't want any claims on it becuase the insurance company will drop them and they can not appraise without it. Granted a lenghtly process probably but it may be worth it to weed out the bad ones.... :)

Ezradams: (October 19, 2009 12:29pm)

To the matter at hand: Appraisers need to band together to fight the forces working to separate us from our full fees and independence! New Jersey is taking a big step in this direction on October 29th. The first meeting of a New Jersey chapter of the American Guild of Appraisers is scheduled. This will be a local chapter run by New Jersey appraisers and relying on the power of the AFL-CIO. This is not a union....it's a PROFESSIONAL guild. The plan is to work locally and have an impact on state government. We will also be addressing national issues with assistance from our parent organization. We've already started working on some issues facing NJ appraisers. It's all about numbers....we need more participation! Don't rely on The Institute to make these changes, they are not an appraiser's rights organization. Their purpose is providing education. dan@appraising.biz

SimpleSolution: (October 19, 2009 12:27pm)

Gmoney-Yes I am an appraiser and what you are saying is the way it is but what I am saying and what needs to change is order the appraisal not a comp check and I am saying that is the way it used to be and should be now. Let the homeowner/agent figure out if the value range is there for what they need. As I said if you have refinanced your home 20 times in the past two years that equity you are seeking most likely isn't there. That shouldn't be our concern and that eliminates homeowners/agents from lying about what they think the property is worth and wasting everyones time and I think eliminates the HVCC. Yes a homeowner or broker will have to come out of pocket for the appraisal but 9 times out of 10 a homeowner knows if they have equity in their home or not so I don't think there will be as much money wasted in that process as people think.

FinanceLogic: (October 19, 2009 12:27pm)

SimpleSolution, you are right. The bad appraisers should be reported, but unfortunately that doesn't help to save the current deal on hand when that low-ball appraisal comes in (containing foreclosure comps). :-(

real appraiser: (October 19, 2009 12:25pm)

Starving Appraiser. your last post was like a bad season finale, what is the news on HVCC expiring in 13 months. whats the scoop, what is the source. hello, anybody there? Sorry, it just this expiration date on HVCC is different everywhere I look. I can not get a clear answer

FiannceLogic: (October 19, 2009 12:23pm)

Starving appraiser, I only had video probs when using IE. Firefox has no probs w/ viewing.

Starving Appraiser: (October 19, 2009 12:20pm)

Joe - LOL - senior moment AKA AAADD .. Age Activated Attn Deficit Disorder!!! Gets me at least once a day ...

USPAP Guy: (October 19, 2009 12:19pm)

To: Appraiser in PA. You need to get a copy of the USPAP and read the Frequesntly asked question section. Comp checks are wrong. If you get a value, a range of values or tell them it's too high or low that is a comp check. If you pull a specfic set of comps then that is an appraisal. You need to take a USPAP class and listen or attend the class don't do the on-line crap.

joecolorado: (October 19, 2009 12:16pm)

PA Zillow is a bad example sorry....I lost my train of thought, had a senior moment.

Starving Appraiser: (October 19, 2009 12:15pm)

Thanks Frank, will do. BTW, haven't had a prob w/the captcha lately, so it's not all bad.

Starving Appraiser: (October 19, 2009 12:12pm)

REAL - interesting that the 03/2008 doc talks @ F & F funding the INSTITUTE for not less than 5 yrs. Why would that be necessry if HVCC only has a shelf life of 28 mnths? HOLD UP - just got a news msg regarding this very thing, says HVCC only has 13 mnths left. More in a minute.

Frank Garay: (October 19, 2009 12:12pm)

Starving Appraiser.. please send that info to support@thinkbigworksmall.com, and anyone else for that matter.. if you're having trouble viewing please let us know. It's best if you tell us what browser and internet provider you're using as well so we can trouble shoot it. THANKS!

joecolorado: (October 19, 2009 12:11pm)

Its really simple..dont give away your method of employment, dont cheat on value, dont work below your standard, dont get influenced by people outside your scope of knowledge...why an appraiser would change the value, by a request from a non appraiser baffles me. I have pride in my profession(I am not the only one.. I know) and I ensure that clients relying on that expertise dont get confused. I give them A value and they give me money for THAT value, I am not a hooker, I am an appraiser, I dont sell to the highest bidder, I dont addle the issue with multiple values. They rely on me to be honest, its expected,(not hoped for....but expected) its demanded and its given. I dont know how anyone could betray a trust that should be instilled in our method of operation as an appraiser. But if you change your values once...you will be expected to do it again....so dont do it..

Gmoney: (October 19, 2009 12:08pm)

You guys are clearly mtg bk's; not appraisers. No comp check; no work, no matter what the law is.

Starving Appraiser: (October 19, 2009 12:07pm)

FRANK & BRIAN >>>HELP!!!<<< or any1 w/more IT knwldg than me. Timed it & took almost 20 mins to watch the 7:59 video today. Keeps buffering or whatever U call it. Have tried changing several IE settings (1 @ a time) & no luck. Any suggestions? Can you report this to your upgrade peeps & C if they have any ideas? ANY1 else having similar problem viewing video????

Appraiser in PA: (October 19, 2009 12:05pm)

Hey Joe Colorado, Any professional appraiser that refers a client to Zillow should lose their certification! Misinformation is at the base of this entire problem on so many levels.

vorpal bunny: (October 19, 2009 11:57am)

To me, a very simple solution to HVCC and undue influence would be for the Secondary Market to accept a value that is +/- a certain percentage. We ALL agree that an appraisal is a stated OPINION of value, not an absolute fact. It's patently absurd for lenders to loan on ONE absolute number, especially in this market.

joecolorado: (October 19, 2009 11:56am)

I cant understand why we get bof=gged down on issues like this where the same questions gets asked and answered several times over....read the blogs below....perhaps THATS why we are being over regulated by outsiders....we dont read or understand the instructions that come with the box....

joecolorado: (October 19, 2009 11:54am)

I dont know why you guys dont just refer the person asking for the comp check to the Zillow web site or any other valuation site.....solves the problem. you are not doing the appraisal or giving a professional's opinion of value, its not costing you anything as you are not giving away your expertise, The Zillow people can be blamed for for a "bad" comp check, so it passes the onus onto them to make a "good" guesstimate of value.

CHARLIE: (October 19, 2009 11:53am)

TO REAL APPRAISER.....If the last sentence was removed...would that be a safe way of doing business????

Starving Appraiser: (October 19, 2009 11:51am)

REAL - I C same thing as U on the NYAG site... 3 accessible versions dated 03/2008 & 2 of them have the 28 mnth reference (freds & fans vrsns), didn't see it in the orig "Code" doc. & as U stated, happy coincidence the 12/2008 version is not accessible through that site. BUT, look at the site's 12/23/2008 PRESS RELEASE, Cuomo references the "REVISED" version but doesn't actually provide that doc. I think we can safely say he doesn't want every1 knowing what the final version is/was. I'd put more weight on the 1 (12/2008 vrsn)on FHFA site..aren't they the so called enforcers of HVCC over F & F??? Bottom line, HVCC is nothing short of BLACKMAIL and RESTRICTION OF FREE ENTERPRISE!!! ILLEGAL in this country!!!

Appraiser in PA: (October 19, 2009 11:42am)

Comp checks are not illegal. A proper comp check does not supply a value. A proper comp check will yield a list of recent sales prices of properties that would most likely be utilized in a possible appraisal. These sales prices are a matter of public record. Misrepresentation is the problem. The appraiser should explain that the comp check does not take adjustments for differences and many other factors into consideration, and the only way the appraiser can give any kind of value opinion is to perform an appraisal. It is improper for the client to ask for the appraiser to make a value determination based on the comp check data and worse if the appraiser complies. If the appraiser gives a value: verbal, formal, informal or otherwise, guess what? That’s an appraisal and the appraiser MUST take all the necessary steps to make sure the appraisal complies with appraisal standards (USPAP).

real appraiser: (October 19, 2009 11:42am)

Sorry Charlie, cant amend a predetermined value, any appraisal written or oral has to be supported and have a file, a wrong value is a wrong value, either you are negligent or incompetent. according to USPAP, damned either way. But most appraisers will give you heads up of red flags and not have an issue, just do not ever say "the deal wont work cause the appraiser said $xx over the phone". The (knowledgable) homeowner can skewer the appraiser. Happened to me by a real estate attorney. If I give you the sales in the area, if the numbers look bad or good, you call it. The appraiser can still consult to some degree and it can be done legally. Just stop tryning to nail it down, you can't. Hell even us appraiser have always disagreed on this, its a very grey area. work with those you trust, understand that there are misunderstandings every once in a while, be professional, no problems

CHARLIE: (October 19, 2009 11:34am)

PLEASE EXCUSE THE SPELLING

Charlie: (October 19, 2009 11:32am)

TRY THIS: Value range is based on the local MLS (and/or) Dataquick informatio. No inspection of the subject or its comparables was done. The data is considered reliable but not guaranteed. The estimate range is: value estimates are an added value service. value estimates are estimated fair market value based on data taken from publis records and data search only. true fair market can only be determined by a physical inspection and a neighborhood evaluation in accordance with U.S.P.A.P. value estimates are not a guaranty of value. this appraiser reserves the right to amend the estimated fair market value when additional information becomes available.....OK GUYS...LETS GET FEEDBACK ON THIS WRITTEN DISCLOSURE......

real appraiser: (October 19, 2009 11:31am)

to frank and brian, Each corner of the real estate profession has reason to fault the HVCC and has legitimate reasons for it to be removed. you wanted to know how they appraisers see things. The HVCC violates USPAP in may ways, still pressuring the appraiser (see the prior post for a few of the points). The USPAP governs us, any violation of it should make the HVCC disapear, I cant say this enough or loud enough and I know the other appraiser will agree. Combine our issues with those of the other industries and damage to the consumer/homeowner/buyer/borrower and you will have a pretty good arguement to shoot this down. You need all sides in this fight, but please no opinions about the legality of this/that (like comp searches and not meeting contract prices). The arguement has to be legal and involve the damage to all parties from each professional position. I do not see how this could fail, unless this is politics as usual and there is no "fair" in this fight, Who is really gaining?

SimpleSolution: (October 19, 2009 11:25am)

FinanceLogic-Sorry let me correct myself. Homeowners don't know exactly how much their property is worth but most (not all) know if they have equity or not and if you have refinanced your home 20 times over the past 2 years (again exaggerating :) ) there is a chance that equity probably is not there and you are right about the AMC appraisals. Appraisers should not be using foreclosures as comps. Resold foreclosures with adjustments are ok but using a foreclsure as a comp is not ok and that is not an accurate value. You can always report what you feel to be a bad appraisal to the OREA or whatever regulatory agency is in your state and if you are getting appraisals back with foreclosures as comps I would report it if I were you....make the people that take so much of our money in fees work and do their jobs.... :)

SimpleSolution: (October 19, 2009 11:17am)

real appraiser-EXACTLY!!!

real appraiser: (October 19, 2009 11:15am)

SimpleSolution: The review appraiser is just as liable for the value if he/she agrees with it and it is wrong. Once you sign the review appraisal, you state that you are just as responsible and liable for that value as the original appraiser. They can and will be affected the same way by any investigation, typically this is the problem if you have a very conservative reviewer. yes the review appraiser who does a field inspection must know the area also. an AMC reviewer has no skin in the fight. All appraisers hate the AMC reviewer because they try to tell us what to change, but they are not held responsible since they do not sign the report. This is another HVCC issue of why HVCC should go away.

FinanceLogic: (October 19, 2009 11:14am)

SimpleSolution, your statement: "Homeowners know how much the properties are worth," is 100% not true. Especially on a refinance when the AMC appraiser is using foreclosure sales as comps! This brings the appraised value in low and is UNFAIR to the homeowner who would never be a foreclosure candidate.

Hermie: (October 19, 2009 11:09am)

Hi Guys, I'm am appraiser of 24 years (quickly going down the tubes) and would just like to stress that the post by "real appraiser" 10/19/09 @ 9:06 am is so far, the most accurate description of the situation. HVCC grossly violates appraiser independence, has created a monopoly, and, as has been said a hundred times before, is driving the most competent appraisers out of the business. We need to stress why HVCC is bad for the home owner/purchaser, and in turn bad for our economic recovery. And, as stated before, we need to get this information out there. On TV, on talk shows, on radio, on internet broadcasts. Most people don't have a clue. And if they knew how this was costing "them", they would be more willing to speak up to make a change. Get the public involved. Numbers mean votes, and votes mean power.

SimpleSolution: (October 19, 2009 11:07am)

Yeah....review appraisers are another thing that needs to go away. Or at least the way they practice it. They should review the appraisal and if they find any inaccuracies or issues they should again report it to the people who are doing absolutely nothing at this point....the regulatory agencies....that way if the review appraiser is full of it then he/she gets fined also.

real appraiser: (October 19, 2009 11:06am)

Cyn, a comp check is a poor choice of words. A predetermined value is absolutely illegal. the difference between these two is grey. If the appraiser gives a comp check, but after the inspection is done and the report has a different but supported value, like it or not, then no rule has been violated. If the same appraisers bends all rules to reach the value from the comp search, then it is illegal. If the value changes and you do not send him to hell or stop using him, things are good. But if he does not make the predetermined value and you get upset, problem. Do you see the differnce. When I had clients(other than AMC's), Yes we worked together legally so no one paid for what they did not need, legal deals got done, a hard headed homeowner who thought their house was made of gold and demanded an inspection, took the risk paying for the appraisal. It is all good if done honestly. But if you stop using an appraiser based only on a low value or want it inflated illegally, u got a problem

joecolorado: (October 19, 2009 11:03am)

problem is where the broker picks the highest appraisal and its not defensible. The other 4 appraisers as reviewers may rip it apart, but the highest appraiser and the broker aren't in business anymore, so us 4 have to suffer because of one person that'an idiot. We need to get organized to canvas our own representatives in our own states. Badger the politicians and let them know that yu are here and you are angry about what is happening with our industry. I tell EVERYONE about the new processes, realtors and brokers included, until they get sick of hearing my HVCC/AMC opinions. Believe me, Realtors are next in this line, as banks will want to control that too....more money for them....NAR sees this coming and are working proactively, helping us in the process as well, so most anything that comes thru from NAR I support.

SimpleSolution: (October 19, 2009 10:57am)

Frank and Brian 25 years ago comp checks were not done. 25 years ago people did not refi their homes every 6 months(exaggerating a bit) either so there wasn't a ? as to whether there is equity or not. When a refi was done maybe every 5-10 years it was just a ? of how much equity. An appraisal was just ordered as it was known there was equity and then once the appraisal came back the loan was worked. That was it. When a homeower inquires about a refi then the next statement should be OK then lets order an appraisal and go from there. That is how it was done prior to comp checks and that is how it should be done now. HVCC is not necessary and if there is a dispute with the appraisal it should be brought to OREA or the states regulatory agencies attention. Homeowners and agents know how much the properties are worth and homeowners will be less likely to lie about it if they know they will have to come out of pocket for the appraisal in advance.

real appraiser: (October 19, 2009 10:52am)

Starving appraiser, I see what you are seeing, however if you go to http://www.oag.state.ny.us/bureaus/mortgage_fraud/agreements.html the agreement you see is not there and the other 3 are still there on their website. I do not know if this is just a happy coincidence, but why would this info still be on this site, click on all of them, they each have the #12 end of agreement. But I can not find the 12/2008 version on their web site at all. Maybe its just me hoping for the best or a real good hacker just did what i wanted to do, but this is how it has been for a while

Cyn: (October 19, 2009 10:50am)

Oh, and we so trusted your info! COMPS CHECKS ARE NOT ILLEGAL! ! ! ! This from a USPAP instructor regarding your discussion today "I HATE putting this link up now – I have heard from a BUNCH of appraisers about the MISINFORMATION at the beginning of this week’s clip (regarding comp checks). There is so many things wrong with it I don’t know where to start.?". If you read the Q&A from the Appraisal Foundation From July 08 your find this information is NOT correct. "Also, even if HVCC forbids the practice, that’s ONLY Fannie/Freddie (and maybe FHA) – that doesn’t make it illegal – they are NOT the whole world of appraising– they just seem like it sometimes."

Jill K.: (October 19, 2009 10:45am)

Comp checks are illegal? (sigh) It's an unavoidable part of the appraisal process so wtf do we call it then? An appraisal order on a purchase transaction is ideally accompanied by a purchase contract. Every appraisal order sheet I've ever seen whether it be LOS generated or on appraiser's letterhead requests estimated value for refi transactions. Now a days, due to the convenience of electronic payments usually the inspection is paid for by phone when the appointment is set. As little as 3-5 years ago however MOST appraisals were paid for "COD" or "at the door" meaning at time of inspection. Either way, the next step AFTER setting the appointment but PRIOR to physical inspection is pulling comps. If purchase price or the est value is $350,000 and the comps support $325,000 then bringing this to everyone's attention prior to physical inspection seems extremely appropriate!

vorpal bunny: (October 19, 2009 10:41am)

Let us not forget that Cuomo got his panties in a knot because WaMu was primarily using STAFF appraisers to do driveby's on their 1st Lien HELOCS and that their Loan Officers were paid based on how much money was disbursed at closing. So there was a financial incentive for higher values for the bank. They earned more money the higher the HELOC blanace. HVCC has not done all that it was designed to do because major banking institutions are part owners of AMC's. It should be illegal for ANY lending institution to have ANY interest in the appraisal process in ANY manner. Doesn't Landsafe show up as a subsidiary of BOA now just like it did at Countrywide? Large banks just want to be vertically integrated in the process. If they are ever allowed to own title companies their goal will be acheived.

Starving Appraiser: (October 19, 2009 10:40am)

Today's post worth re-reading as I see it ... 1). Frank's 7:50 post...2)Ancient's 8:11 post...3)Penelope's 8:18 post ...4)Clueless's 8:28 post. GREAT COMMENTS YOU GUY(s)/GAL(s)...KEEP UP THE GOOD WORK. >>>> Comp check can be provided by agents & that removes the issue from the apprsr's plate, w/the exception of refis. Although homeowner's could still use the service of an agent (maybe for a small fee) &/or public records. I agree CC is/would be beneficial to the HOwnr in a refi, but not at the cost of an apprsr's license. My busn name is Appraising & Consulting so I have a little CYA built in, but not a fan of doing free work for any joe blow that rings my phone. Long term good clients I try to assist within USPAP standards.

real appraiser: (October 19, 2009 10:39am)

Dan: as an appraiser if I pull up a subdivision and there are 5 sales and I send you those sales and you can make the deal work or not work, most appraisers will not charge for this. Now if you have 30 sales with a wide range of prices, and updating and views are big reasons for the difference in value. the appraiser wont know these differences until he sees the subject and all comps. Some appraisers will say they can tell without going out, or it can change if things change once we are out there. Any way, sometimes it is easy, sometimes near impossoble. I have no issues with not charging for a comp search, but being told its a renovated pool home that is actually an above ground pool with a new refridgerator is a problem. If everyone is honest and professional on all sides, there would be no problems, hence alot of these "professionals" on all sides are not honest, theres the rub. I would be glad to have "cluelesdad" as a client but not "lender" based on their opinions and attitude.

Starving Appraiser: (October 19, 2009 10:30am)

FIRST (VERY IMPORTATNT) - REAL APPRSR, the link you provided is an "early" (03/2008) version of HVCC. Final version (as I understand) dated 12/2008 can be found here ... http://www.fhfa.gov/webfiles/2302/HVCCFinalCODE122308.pdf >>> & I'm not seeing the 28 mnth/07/2010 expiration in it. SECOND - from HVCC 12/2008 version PARAGRAPH I, Sec B, #5 - appears to make comp checks a NO-NO. THIRD - It's very obvious that as stated last week, USPAP is interpreted differently and that in itself is a HUGE problem.

John: (October 19, 2009 10:29am)

I am a member of my local MLS, which costs about $200 per quarter. For my local clients, I can look up comps myself to get an idea of a property's value. Is there any reason why more brokers can't do this?

real appraiser: (October 19, 2009 10:25am)

John some realtors give comps that are just to hit value. They give sales that are 2 years old, listings, house twice the size, sales that are all superior in beds, baths, garages, pools or are miles away. By the way if you go out a mile for sales and you have 5 arms-length sales in the subdivision and you do not use them because you are SEARCHING for a higher value, the appraiser just inflated value unless he has a reasonable arguement for NOT using each of those sales (divorce, short sale, distress,etc). We must have a valid reason to go further out, low sales price by themselves is not good enough. this is easy to see when it is done. When I review sometimes a report looks horrible, but as you get out there, you see the logic behind the report, other times its just clearly fraud

Ancient Appraiser: (October 19, 2009 10:24am)

Fickle Realtor; Touche'

Evan Miller : (October 19, 2009 10:23am)

Is anyone else having a hard time downloading the show?

Dan: (October 19, 2009 10:17am)

If HVCC disappears, appraisers will be back to doing comp checks again, but the process needs to be legalized so that appraisers can charge for their time while doing them instead of doing them for free. The charge should be about $30. This little effort on the part of the appraiser saves consumers and loan officers money that would be wasted on a crap shoot appraisal based on what the borrower claims their house is worth. Bottom line is that you can't loan money on a comp check, so to get a loan you need a real appraisal on paper. The comp check is merely a best guess based on the data available to the appraiser and can be revised without any negative ramifications if the appraiser gets out to the property and it is not in average condition, like when it was comped out. The bottom line is that comp checks are done and since they are illegal, appraisers can't charge for them, which is just another way appraisers are getting the short end of the deal.

Tobby: (October 19, 2009 10:15am)

For what its worth there is a lot of change going on at lenders with regards to AMCs. They have only had about 6 months experience with them. Many have fired some big AMCs over quality issues (see Chase), and/or are on their third or fourth vendor. The end result is what everyone has been complaining about, including the lenders, poor quality appraisals. Several banks I have been working with are going back to an old-school approved appraiser panel. These appraisers have a miniumum of ten years experience (they actually remember a normal market in the 90's), they are paid full fee, and are given work on a rotational basis. Underwriters like it because they can speak directly with the appraisers. Chanage is coming, not because brokers don't like it, but because the lenders are fed up with the inconsistent AMC quality.

real appraiser: (October 19, 2009 10:12am)

fickle realtor: The reality is that the USPAP is mostly grey. Even the comp search issue is only discussed in the opinion section of USPAP. We do not have the 10 commandments, only the bible(USPAP)which each of us has to interpret. I am pretty sure that half of the appraisers here would be found wrong based on their intepretation, the other half would have a reasonable arguement and supported with teir research, would not have an issue with investigators. the truth is, those who govern us are so backlogged, they probably wont go after you unless you clearly pushed a value in either direction as a result of pressure. The comp searches biggest problem is 5 different values from 5 appraisers, and the highest value is always chosen by the broker. Then appraisers have to get work by "competing for the highest value" this is not the definition of market value(sometimes it is in certain conditions), then the problem arises, if you are consistently high, more work, hence the HVCC, which is bad

FinanceLogic: (October 19, 2009 10:09am)

John, a Realtor has no vested interest for MY refinance applicant, NONE. And like I previously mentioned.... this is where comp checks are needed (refinances). Appraisers know the 'target value' for a EVERY purchase transaction. Likewise, they should also know the value needed to make a refi loan work. Fair is fair, right!?

Austin: (October 19, 2009 10:06am)

So TBWS has made some changes to both rate alert and TBWS video marketing. Yet it seems items are being taken away that used to be included within TBWS.(ie market/daily shot and the download option within the tips and flicks.)So I have two questions why were these items take away and will this be reinstated? I do hope so as on Franks suggestion I purchased the required software to be able to download these bits. By not being able to download theses items you have taken away the ability to set up the clip for our/my viewers. I know your firm is going through some growing pains but seriously you keep taking things away without notifying anyone of the changes. So what else can we expect?

John: (October 19, 2009 9:57am)

Since appraiser comp checks are such a problem (i.e. illegal, unethical, in violation of USPAP, etc.), why don't loan officers ask their Realtor partners for help with comps? They have knowledge of the market, access to the MLS, and have a vested interest in keeping our business running smoothly.

Rob in AZ: (October 19, 2009 9:52am)

jr424: Talk to your Alderman. If Mayor Daley can get the US President to fly to Copenhagen to pitch the Olympics, I'm sure he can do something to protect Homeowners in Chicago from fraud! :-)

fickle realtor: (October 19, 2009 9:52am)

No wonder appraisers dont have a good lobbying group. You guys cant agree on crap! And you thought realtors were fickle? Nothin next to appraisers.

Hillside Appraisal: (October 19, 2009 9:40am)

Zillow is always wrong with the Zestimate conclusion. Most Loan Brokers dont know what Appraisers use to select the right comps to start with. Here is a Free trick with Zillow: Edit Zillow criteria on the left side: Choose within 20% sqft, within 10 years age, within 90 days sale date window, zoom out within 1/2 mile and always on the same side of major streets or fwy boundaries. Look at the Salprices, you will see the low side and the high side of comps. If the home has a new granite kitchen, upscale baths, new flooring, the value range will be on the high side of the Sales Prices. If not renovated, then it will be on the low side. The final value will not be higher or lower than the list of closed sales found. Does this help? Loan Brokers can't spend money on subscribing to First American (www.realquest.com) in order to pull comp checks for themselves on every file. I pay $200-$250/mo for this full data service.

Clulessdad: (October 19, 2009 9:34am)

Rob-You are right on with the process of how appraisals are being reviewed now. What good would it do for me to coerse the appraiser's value, when I know it will be scrutinized by several steps? I want to talk to the appraiser who is working on a order and try to establish the best denfensible value for the subject. Who cares what we talk about? If we talk about facts, what harm is that? What harm is it if the appraiser knows what the value needs to be in order for a deal to work? Maybe a different database needs to be explored, you know appraisers have diffrent places to extract sales. Let's communicate and find the defensible value based on facts. An opinion of value is not good if it is not defensible and supportable with market analysis and logic. That is the goal here people. You can't legislate communication, ethics, and honesty. But you can put in some checks and balances.

jr424: (October 19, 2009 9:31am)

ROB i understand that now who can we convince that the system in place now is enough to cmbat these reports. I know in my market right now appriasers and UW's can be tricked by flip sales. (bought for 25,000 and resold for 350,000) That is a major issue in market(chicago) and its inflating values because more times than not that property 6 months after the purchase of 350,000 is in foreclosure ......and they seem like reasonable sales. All I know is that if this thing goes through the same as the current one inplace for conventional loans my business is in jeopardy and I truly just want to find the answer to what I can do to help?

SCRREA: (October 19, 2009 9:30am)

"You might also remind them that it is not required for them to use an AMC which probably is not getting the same quality appraisal they could easily obtain themselves. All a lender really has to do is select someone in their organization who is not in the underwriting department to hire the appraisers." This is what a government official told me about lenders and the HVCC. Looks like info is all around us and no one knows what is going on.

Rob in AZ: (October 19, 2009 9:22am)

gabster & realappraiser: thanks for the helpful info!

Rob in AZ: (October 19, 2009 9:18am)

jr424, I think a big part of the solution is actually happening without any new legislation or additional rules whatsoever. Underwriters nowadays scrutinize Appraisals. They didn't take the time during the "boom"! SO if the bottom of page 2 said the value was there, no additional research was done, even to the point of not looking at the Adjustments. The current marketplace punishes Underwriters who are careless like this. Remember an Underwriter must sign off on the Appraisal. If she has reason to doubt, she can order a Desk Review or even a Field Review. I do not mean to "dump" this solely in the Underwriter's lap, but this was a big part of the problem. Delinquency rates have drummed a lot of Underwriters out of the business... "Checks and Balances"

Cold Water app: (October 19, 2009 9:16am)

RE appraisers can provide oral valuation services; they can decide what to charge for their time; they can market their services; if a broker wants to pay for an appraisal or a valuation service or two or three, they can; appraiser has legal (USPAP) obligations to meet when providing a value opinion, whether it is a wide range or a single point estimate; obligations that do not necessarily interest or concern that client, but better concern that appraiser. If an appraiser wants to take a week to do a full blown written URAR appraisal right - and charge $75 for it, or $600 for it - that's a business decision he makes. Oral reports can be very simple, but the appraiser, unlike someone who is not an appraiser, has to create and retain a written workfile for those oral reports - and there are minimum standards for what must be in that report. No doubt many appraisers who give free comp checks blow that off as something they'll never be called on to provide to a compliance investigator.

BuckeyeinCA: (October 19, 2009 9:15am)

Comp checks are not "illegal" per say, but they are strongly discouraged by OREA in CA and, under HVCC, if I provide a comp check, I cannot accept the order. As a certified appraiser, even if I verbally tell your your house is worth $300,000, it can be considered to be a legal appraisal. I cannot give anyone a "off the record" value ever. I don't mind doing them, but I CANNOT provide a specific number- only a range of prices. Also- L.O.s provide me with an "address" only and think I'm clairvoyant bout the property. Sorry! I have NO idea about remodeling, amenities, etc.- UNLESS YOU PROVIDE ME THE INFORMATION! At best a comp check is only a guesstimate. Until an appraiser sees the property, he cannot provide one a credible indicated value. Other pet peeves- 1) L.O. calls and wants comp checks run on 5+ properties. 2) L.O.s who request comps checks, but never order an appraisal. 3) L.O.s who insists they want a specific value, not value range for a C.C. or a "guaranteed" value." Grrrrr!

real appraiser: (October 19, 2009 9:13am)

Rob in AZ, any portion of the roof that is in question, has 3 or more shingle layers or does not have a minimum 2 year expectancy requires an additional inspection. The Flat roof inspection was removed a few years back. If anything falls within safety or structure, which includes roof, plumbing, electrical, peeling paint (on homes built) prior to 1978 a correction or more detailed inspection is required.

jr424: (October 19, 2009 9:08am)

your absolutely right ROB but what is the solution........we cannot just stand by and allow them to control our business's. Who cares if comps are illegal. We will not be able to pick up a phone and talk with an appraiser.(we meaning brokers) I believe a way exists through the political end of the world to get this changed. It is not working on the Fannie side right now. I seen a special on channel 2 i believe that was a whole segment talking about whats wrong with the HVCC.....maybe thats the answer going on television and talking about what is wrong with the current way HVCC is ran. Or hiring a firm to try and push that legislation back.......who do we have to convince? and how do we convince them is the real questions.

gabster: (October 19, 2009 9:06am)

Yes Rob!

real appraiser: (October 19, 2009 9:06am)

Everybody should understand that most appraisers here did not want misinformation about comp checks being used as a tool to fight HVCC by frank and brian, who were on the wrong side of USPAP, thankfully they now get it. No different than using the arguement by realtors that HVCC is bad since contract price was not being met. These arguements would actually enforce HVCC. So all the anger aside, So for appraisers, the arguement to fight HVCC is that it allows pressure from a different source that still violates USPAP, and for this should be terminated. these pressures include unrealistic turnaround times, shopping appraisals to lowest bidder not based on appraiser competence, forcing lender rules over USPAP, removing appraisers from panels without reason, not allowing experienced on panels as they are "full", etc. These things and others contradict appraiser independence! Pre HVCC conditions were better than post HVCC since We could move on from bad clients, No choices now!

gabster: (October 19, 2009 9:05am)

Comp Checks are the problem! I say teach the brokers/loan folk how to do the damn checks themselves! (No bitterness intended ;-)Then they can have have a better idea if the loan will make sense pre-appraisal without asking the appraiser for an "opinion of value", without paying them for it, or without looking at the house etc. Competition is good for many industries and in some sense it is good for appraiser too, but NOT for competing for the highest value! Yes there is room in most cases for some leeway, however most times when the highest bidder got that highest value...they were pushing by cheating a little i.e. ignoring the model match next door, going farther away for higher dollar comps...ect. Which is most assuredly NOT good for ANYONE involved.

Rob in AZ: (October 19, 2009 9:01am)

Question for FHA-Appraisers &/or Frank & Brian: I believe the Guideline for Roof Cert was that it was required if the Appraiser called for one; and it was also required for flat roof in all cases. This is (I think) basically what F&B said except without the flat roof stipulation. Are they no longer required for all flat roofs? Thanks.

Rob in AZ: (October 19, 2009 8:58am)

Angry Appraiser: HVCC may or may not have the effect you intend, but if you look up its history, it was NOT instituted based on abuses by Mortgage Brokers calling every Appraiser in the phone book to see who would hit value (which is also an obvious breach of ethics by both the Broker and the Appraiser who takes the business). HVCC was instituted after Washington Mutual (a bank) pressured its in-house Appraisal Mgmt Company to hit values. The silly thing winds up rewarding the very activity it claims to punish.

Pacific coast: (October 19, 2009 8:56am)

FRANK looks like you're wrong again. If I were you I'd just quit trying. ;)

Lender: (October 19, 2009 8:54am)

Frank, what chapter does Zig Ziegler talk about trying to appeal to the masses? If you try to appeal to the masses you appeal to no one. I think it's chapter 7 page 4. You can buy it on the links and docs below.

real appraiser: (October 19, 2009 8:50am)

Clulessdad: you are right on target, However, the appraisal report has a whole section on the contract. This is not so much for the price but the termss of the contract like concessions, etc. The certification of the appraisal report states that "HAVE REVIEWED THE PURCHASE CONTRACT' Technically, you can not sign the report unless you reviewed it. This may start more wars with appraisers. Some will state that the contract was not made avaialble, In CE classes I was told you cannot do this as it is contrary to what is in the certification that is signed and that is final. But trust me, every appraiser here has not come in to contract price since it could not be supported at one time or another. It would be impossible to make contract price 100% of the time. This could be for lots of reasons, not just a poor appraiser. But in most honest sales and negotiations, the contract price is within market expectations, no problems.

OC Appraiser: (October 19, 2009 8:48am)

As per USPAP a comp check is not illegal if you provide an Opinion of Value; Range of Value or Ball Park Value as long as you document and keep records....etc. Some comp checks take a few minutes and some longer. Because of HVCC you may not get the order; per-HVCC some did comp checks to get the order from a relationship w/lender and/or broker. On another note: HVCC applies to loans sold to Fannie/Freddie but all lenders (CA) now but all orders through an AMC. The lending industry can't even trust themselfs to do highend loans without an HVCC like complience.

HVCC sucks: (October 19, 2009 8:46am)

Why shouldn't an appraiser be able look at county records and the local neighborhood and tell the client a range of recent sales for homes that seem similar? This gives the client at least a clue of potential value so they don't totally waste the borrowers money and the loan originator's time.

Tobby: (October 19, 2009 8:46am)

Interesting mia culpa by the boys on comp checks and maybe a peek into the reason(s) for the HVCC? A few notes on appraisals: -They can be verbal and do not need to be written (not advised). However, a file must be maintained with all the documentation and calculations to support the value. -A "comp check" has no legal definition. The action of giving a value does (it is called an appraisal). And when giving a value (appraisal) the appraiser must meet USPAP (that file again). What most brokers define as a "comp check" can be legally performed. However, the work to complete that assignment and document it takes considerable time. It is not just "pulling comps" like one would "pull a credit score". Most appraisers (99.9% of them) that were doing "comp checks" were not meeting USPAP and as such were doing them illegally. There are some firms that do these (they are under the consulting standards of USPAP), however, they typically charge about $100.

real appraiser: (October 19, 2009 8:36am)

To ALL APPRAISERs. Many of you were looking for the actual AGREEMENT, Here it is at the New York ATT GEN CUOMO website. http://www.oag.state.ny.us/media_center/2008/mar/Fannie%20Final%203-3.pdf Please read #12, anybody have any ideas???

ANGRY APPRAISER: (October 19, 2009 8:35am)

LETS FACE THE FACTS, HVCC is for the loan brokers who try and get appraisers to make values. Any appraiser who feels he is a professional will let no one tell him to make any value. The comparables in the market that are comparable to the subject sets the market using comparable homes or condo's in the neighborhood and marketing area and using current market sales either standard sales or short sale or REO's. The professional determines which sales are driving the market, no on else. CASE CLOSED.

real appraiser: (October 19, 2009 8:33am)

valleygirlappraiser, you are correct. If you stop using the word comp search and use estimate of value then maybe people would understand. they both reach the same point. If you pull all sales from a subdivision or "the identified neighborhood" and forward this data, it is NOT a comp search, but as some stated here, you can NOT indicate which are compararble. You have used your knowledge to offer chosen comparables, which would indicate a range of value. But even as a consultant, if you give just data, you are fine, give any idea of the most likely comparable sales and you just gave an appraisal in which you must keep a work file. If you are a broker and appraiser, you must be clear as to what capacity you are working in, broker-yes, appraiser-no. You must be perfectly clear, I am both and people will hear what they want and this could be a scary place to be. Lastly, the comp search and the HVCC are different, HVCC was implemented because appraisers were asked if they were presured.

Clulessdad: (October 19, 2009 8:32am)

FinanceLogic-That is because the NAR would explode if the purchase contract were not reviewed. You are right though, the purchase appraisal is NOT a blind appraisal.

FinanceLogic: (October 19, 2009 8:28am)

CA Realtor, your statement: "I think most of the problems with value checks are only with re-finances." Well, DUH! The appraisers know the target value on a purchase. Funny how the appraised values still come in slightly above the purchase price, even now, after HVCC. If appraisers are allowed to know the target value on a purchase then they should also have the target value for a refi. PERIOD. However, if the same rule applied and the appraiser wasn't privy to the purchase price then you'd see a lot more renegotiations due to low appraised values on purchase transactions!

Clulessdad: (October 19, 2009 8:28am)

Frank-trying to legislate education is like trying to regulate ethics and honesty. Some will abide and some will find loopholes around it. The answer is getting away from a single data point (an opinion of value) and develop a process that includes multiple "eyes." If I as a broker try to get an appraiser to inflate a value, what good would that do if I know that several people were going to review it? Much of this framework is already in place and was in place before 5/1/2009. We all should be changing our focus from an opinion of value to providing a defensible value based on the entire neighborhood market at a point in time. A process is ALWAYS better than a singular datapoint to establish value.

Lendermen: (October 19, 2009 8:25am)

Lendermen: Guys, what is up with the back and fourth on comp checks? Makes me think you don't know jack about what you are talking about. Comp checks should be allowed. A consumer should be able to see if a transaction is viable before they spend 500 on an appraisal.

PenelopeX: (October 19, 2009 8:18am)

I have to agree with Frank G. "HVCC was brought about to stop lenders and realtors from influencing appraisers." As a certified RE appraiser (& FHA certified), I see the issue pre- and post-HVCC is the Appraisal Management Company (AMC). The issue now is not just distancing the appraiser from the lender (or lender-type pressure to obtain a pre-determined value), but now in an unrealistic turn-time that is affecting the credibility of the appraisal. A scrupulous appraiser will take the time necessary (typically 3-5 days) to produce a credible, reliable report. But, they run the risk of not getting any additional work from the AMC and eventual ruination of their business. They'll get "black-balled" by AMCs and run out of options to do what their USPAP and Fannie/Freddie guidelines mandate they do, a good job. The issue is the AMC, plain & simple. Appraisers have been working around the "comp-check" for years by providing what a realtor provides, the most recent market sales data.

CA Realtor: (October 19, 2009 8:16am)

8:12 Ca Realtor: Re Value Checks - As a RE broker, I do them all the time for almost anyone that asks(data printout from MLS or Title takes only a few minutes if I am at my desk) but only in my immediate area because I know all the sales. Also I do BPO's for $50-75 in the general area (15 miles)for the banks - three sales 3 active. I think most of the problems with value checks are only with re-finances. The sales data for a purchase should be figured out prior to a good buyer's agent writing a contract. If it didn't happen - then shame on the buyers agent for wasting the buyers money.

Ancient Appraiser: (October 19, 2009 8:16am)

JR424; HVCC is not a law !! It was/is an agreement between Freddie and Fannie and the Attorney General of New York! It's an illegal restraint of trade instituted to generate more graft and corruption in an already corrupt industry ! Banking !

Lender: (October 19, 2009 8:15am)

I was a fan and viewer, but with the bow down to the unemployed appraiser lunatics on this website you lost my "Mental Connectability." I hope you did this to avoid future problems from your frenzied appraiser clientele. Common sense should be used on all subjects, Free Comp Checks will continue from good appraisers that "Get it." I think you should go back to helping lenders and go over changes as opposed to ridiculous topics as comp checks. This one was worthless and any lender still around knows about the 2 year roof life-span requirement. What's up guys? Nothing about the debt ratios dropping or the new D/U coming out? What a sell out to appraisers you just gave.

Ancient Appraiser: (October 19, 2009 8:11am)

Frank; I'll go you one better. Most Appraisers in the industry while doing their research will run across homes that no way, shape or form or going to make the value requested. Typically at that point the Lender is advised and the buyer or borrower normally should pay only a cancellation charge ... not the full fee !

jr424: (October 19, 2009 8:06am)

FRANK:If we can get that in front of congress maybe that would work. But as you probably already know getting it in front of congress to vote on is the issue. I kind of find it hard to believe that they will overturn a bill with the arguement of just enforcing a law that already exists. It is a great idea in theory but ibelieve most politicians do not understand our industry as much as they should to be writing these type of laws.......it is the governments involvement in compnay's like fannie mae which is getting these type of things through.(just my opinion)

Anti Socialism: (October 19, 2009 8:06am)

Yep, and techincally quoting a Interest Rate to anyone requires an APR to come right after it. Yep......so when your'e talking to your neighbor as he's edging his lawn and he ask where are Rates at lately Jimmy, and Loan professional must also quote him a valid and accurate APR. Yep 100% of Loan Originators do this....sure they do. Look, if we followed every stupid politically motivated law put in place, wewould be nothing but robots or $8.00 CSR reading scripts froma computer screen.......remember the Countrywide call centers? As for the Appraisers who hide behind that so called legal issue of providing Comps is just lazy. There are formats put into place where that Appraiser can charge you $25.00 -$100.00 to put together some COMPS or even mini Appraisal, that is 100% legal. Weird, strange, not practical, but legal. Most AMC's even advertise this kind of service.

John P. Dennehy Sr.: (October 19, 2009 8:04am)

As usual, a bill will be passed for no good reason. HVCC is a gross overreaction to a problem which had laws on the books resolving the issues, and never enforced. Peoples memories are short. Remember before mortgage choices(brokers),no viable alternatives for mortgages were available and big banks monopolized the market. They also did not give people viable opportunities to get a fair deal on their refinance or purchase. HVCC goes a long way towards skewing the market in favor of big monopolies like, Chase, BOA and Wells Fargo. These companies were part of the problem in the first place. I remember refinancing loans from WellsFargo Finance. They churned those mortgages as many times as possible before sellng them off when the clients started asking to many questions. 22 % interest on an "A "borrower. he answer is education.This has been done based on the state and soon to be federally. the public is far better off now, then they were 25 yrs ago.

Faun: (October 19, 2009 8:00am)

James the Appraiser: That saddens me beyond belief! Most of the professional Realtors I work with here in Colorado are doing our best to substantiate our work with actual comps! Guess it wouldn't hurt to keep asking the brokers involved if they have comps, maybe they'll get the hint that they should be doing their jobs better!!!

Frank Garay: (October 19, 2009 7:50am)

Jr424 - I think you're wrong. I don't think we'll see a change with regards to HVCC unless there is an alternative. HVCC was brought about to stop lenders and realtors from influencing appraisers. So we need an alternative that meets that goal, but that also allows appraisers to operate freely - not having to be tied to an AMC and most importantly that doesn't cost the consumer any more money. We need the alternative. I thinks some educational legislation could be a viable answer.

Apprasier: (October 19, 2009 7:50am)

Fitti: Make sure you disclose in your BPO that you are an appraiser but acting in the capacity of a broker in your BPO.

TeamAguirre: (October 19, 2009 7:48am)

You guys are right!! Appraisers are a Touchy bunch. If you think about people in Real Estate business in respect to their dominant personality type - Appraisers are predominantly a "precise" and "calculating" bunch. One of their major psychological fears - is a fear of making a "mistake" or "miscalculation". It is no surprise when they lose their lid if we question their valuation or work ethic...all they are hearing is "They made a mistake" A big No-No for them. I say if they aren't open to feedback - GET OUT of the business!! Make it a great day!

Apprasier: (October 19, 2009 7:47am)

Fitti: I you are acting as a Broker and giving a BPO, USPAP does not apply to you.

FinanceLogic: (October 19, 2009 7:46am)

To Fitti, wearing both hats sounds like a conflict of interest. Pick a single profession and stay ethical/legal.

jr424: (October 19, 2009 7:45am)

this converstaion is a moot point because at no point will a Bill be run through congress for illegalizing comp checks to be used instead of inplementing HVCC. The real issue at hand is are we going to be able to (in the next two months)get this thing pushed back or eliminated. I think we need to get some money together and fight this issue.

CA Appraiser: (October 19, 2009 7:42am)

as an appraiser what I do, which is legal is give a range of sales in the area. That way the lender makes the call on whether it is worth it to do the appraisal or not

James the Appraiser: (October 19, 2009 7:31am)

Ok, back at 2PM (PST) then I will clear up more doodoo

James the Appraiser: (October 19, 2009 7:30am)

Fitt- YES, just make it clear that you are doing the work as a BROKER, your clean then

James the Appraiser: (October 19, 2009 7:29am)

Faun, we have very few good brokers and agent almost never have comps that they used to price the property ready for the appraiser. Most tell me they picked a number from the air or "That is what the owner things it is worth", my god, my home must be worth 1B then, that is what I think

Fitti: (October 19, 2009 7:26am)

I am both an appraiser and a real estate broker. I've been a real estate broker for twenty five years and appraiser for twelve years. My question is, could I give a range of value and not violate USPAP regulations if I clearly state that this value range is given as a real estate broker and not an appraiser?

James the Appraiser: (October 19, 2009 7:26am)

valleygirlappraiser - You are SO RIGHT, the rest for the most part are farting dust

James the Appraiser: (October 19, 2009 7:25am)

ctf: - hope you keep a work file for each and every range you give out.

Faun: (October 19, 2009 7:16am)

Appraiser: Yes, a good broker should do it for "FREE" because chances are good we just ran the comps for the subject property a few days prior in order to put the contract together! We're not doing it for "FREE", we're getting paid to put a deal together that will actually close. Unlike appraisers, we don't get paid to run comps and assimilate the data, we get paid to run comps and use the information gleaned to sell houses. Any Realtor who's in the middle of a deal and isn't happy to provide the comps they found when listing a property or selling it, doesn't deserve to get to the closing table!!! Good real estate brokers are a valuable source of information . . . use it! That goes for LOs and appraisers too. Talk to us, ask us how we arrived at a list price or what comps we used when making the offer. Ask questions about condition, level of finish, recent renovations, etc. Call the listing broker on a sold comp and ask ask ask! Nothing in HVCC prevents this!

Georgia: (October 19, 2009 7:13am)

I'm not going to wade thru all the days posts, but Friday someone quoted chapter and verse to show comp checks weren't illegal under USPAP. Did ya miss that in all the "I don't want to do it cause I'm afraid it will cost me money" posts of the appraisers?

ctf: (October 19, 2009 7:04am)

.My husband is a loan consultant so I have seen first hand how detrimental the HVCC can be to borrowers and lenders. Before HVCC, whenever a client wanted to have a "comp check" I would simply give the value range of the comps over the past 90 days. I would never gurantee value but he at least has the information to see if the loan would even work out. Sometimes they need values that are so off the comp range, it is clear as to whether or not they should proceed with the loan. I have seen so many borrowers pay for appraisals that they cannot use. Now, on top of HVCC, borrowers and lenders are having time and money wasted simply for an appraisal. The appraisal is just one of many parts of a loan and now it has become such a hassle. I have seen the lending side, and when you are trying to close a loan but you are waiting for the AMC to make a correction on an appraisal, nobody wins..

Frank @ TBWS: (October 19, 2009 7:04am)

Appraiser. The misunderstanding is that everything is misunderstood. We as lenders often think that asking you as an appraiser if you can hit a particular value is a comp check. If it is illegal for a loan officer or a realtor to ask an appraiser if he or she can hit a particular value, then we need to know that it's illegal. And if it is, and someone does it, then penalties need to be enforced. If we all have a clear understanding on what we can and can't do, there will be no need for HVCC. The problem is we don't know what is legal and illegal when it comes to this comp check/ask for value issue. State what's legal and what's not, enforce it, and let us go about our business. Agreed??

Colorado: (October 19, 2009 6:59am)

Go to AO-19(advisory Opinions) in USPAP. Also information on comp checks are in the USPAP FAQ section 130. You can also find USPAP on-line for those who are not appraisers. The AO's and FAQ's are at the back.

Apprasier: (October 19, 2009 6:59am)

Here we go again with distributing misinformation, comp checks are not illegal and if you believe that they are state your source. If you call me up and say I need a comp check on this house in neighborhood A, I can pull ALL sales in that neighborhood and say there are closed sales over the last year from 200 to 300K. That is a value range for the neighborhood, I don’t need a work file and a lender can easily get this info from any real estate agent. Here is were the problem begins, the neighborhood value range is simply not what the lender is asking for, he/she wants to know is that 1200 sq ranch going to appraise out at 220 which is needed for the loan so now they are actually asking for a n opinion of value for a specific type of house, now they are asking for an appraisal, the appraiser would need to keep a work file on the data obtained for this comps check, such as all comparable sales of 1200 sqft ranches sold from 200 to 225. Lenders expect this info for free when there is some work involved, and when the lender gets that range 200 to 225 they always assume its 225 when in all possiblities it could be much less depending on condiiton and location which really is only known when an actual interior inspection of the property is done. So an appropriate comp check would be I found sales of 1200 sqft ranch homes from 200 to 225 so this is your range of value and now I as the appraiser would need to keep a file on this and bill the lender for the service performed. When the comp check becomes inappropriate is when the lender asks, can you get 225 on it and the appraiser says yes or no, that is a predetermined value without any kind of inspection and that violates USPAP. I have a solution to the problem, the lender should have a real estate agent comp out the property, they have the same access to the MLS that an appraiser has, have them give you the sales that they are using to comp out your property then you as the lender can make the determination of weather you have support for you value just make sure they are recent sales and not from 2 years ago. The big question is will the real estate agent do it for FREE?

FinanceLogic: (October 19, 2009 6:59am)

Comps checks are not illegal. I work with a lender that has a "comp check" option on their appraisal order form (thru AMC). The comp check costs $75 and is returned within 24 hours. It would be nice to have all the facts straight. Since brokers, realtors, and appraisers ARE the housing market, we should all be informed as the the current laws/guidelines and thus no 'open to interpretation/fraud' can take place! The government needs to wake up. How can more rules help when the masses don't even know the current rules! I'll also add that prior to HVCC I worked with a local appraiser that provided free and fast comp checks. I would've never asked him to do a comp check if he had not OFFERED to do them for me. This was his way of bringing in new business by offering free comp checks for brokers. Funny how this practice became the fault of the broker.

jr424: (October 19, 2009 6:57am)

they cut me off.....If we hire some type of firm that is really knoledgable when it comes to politics we may be able to beat this thing. But itis going to mtake MONEY and lots of it. If the NAMP can get together with the appraisers and come up with a substantial amount money. if any body thinks this will not destroy our industry they are wrong.....we need to do something.

jr424: (October 19, 2009 6:45am)

what the hell can we do to try and stop HVCC going through for all FHA loans. My appraiser has a family to feed and he is not set up with an y management companies. does anybody have any type of input besides calling congressman. I heard they are trying to put a moratorium through which would delay the law from going through. What these politicians do not understand is that this law is going to make appraisers appraise homes as conservitive as they can so they won't lose their gig with the management company. That will continue our downward spiral in the real estate market. All of these experts are stating that the economy is on its way back up. But if the real estate market continues the way its going(every day i walk into work is the worst day in the real estate market i have ever seen and its not getting better)we will all be out of work and these people running the show will have gotten what they wanted. So if anybody has any ideas like hiring and old timer politician(strategyLMK

Frank @ TBWS: (October 19, 2009 6:38am)

There are other ways to do comp checks on our own. I like www.FidelityPassport.com myself. I can usually get very close. So I say we make it a clear law that you can't influence an appraiser, BUT, if the appraisal has clear "errors" on it we can get them corrected. If everyone had this understanding, it would take all pressure off and we could still order our appraisals through the good guys. We can do "comp checks" on our own with our local MLS and other sources.

Apex Appraisals, NC: (October 19, 2009 6:38am)

Guys, Thanks for hearing us an responding! More than I can say for Mr Coumo, Freddy And Fannie. The laws / rules that are keep the appraiser independant are all in place, just the enforcement is lacking. The funny thing is that New York may have one of the worst Apprsaisal enforcement in the country.

valleygirlappraiser: (October 19, 2009 6:35am)

wow. This issue highlights the biggest issue in the appraisal industry.. lack of consistency and knowledge of the basic tenets of USPAP. As stated by RC45 & several others, giving anyone a value point or value range, involves maintaining a workfile on the property....but then it is no longer just a 'comp check', it is an appraisal. An appraiser is in violation of USPAP if that appraiser looks up comps, gives someone a value range or point, without maintaining a workfile...which many people refer to as a 'comp check'

Scape Goat Originator: (October 19, 2009 6:27am)

Can anyone point to a real number in regard to fraud and foreclosures for inflated values? Seems to me the bigger issue is loans made to bad credit borrowers and expecting good credit results. Isn't HVCC and more mortgage document disclosure really a distraction to where the problem really was. I have been brokering mortgages for 8 years and it seems that the biggest issue was subprime foreclosures to borrowers who had plenty of disclosure and a fair appraisal. However when they can't make the payment because they didn't clean up their act before the rates changed (like they said they would at time of application) then you had trouble making value because the foreclosure rates in the area. Seems to me that HVCC and TILA do not address the real issue which isnt appraisals and disclosure but intstead, defaulted subprime primarlily and deregulation of mortgage backed securities traded on the market. Seriously arent we chasing our tails here?

Slim Shady: (October 19, 2009 6:23am)

Not so sure a "No Comp Check" law would be enough to replace HVCC since it was primarily enacted due to so called "appraiser pressure" to hit numbers as well as appraiser protection from being "black-listed" from the business if they did not hit numbers. Comp checks were an inconvenience but were not the crux of the biscut behind HVCC. I believe Mortgage Brokers and Appraisers were basically an after-thought since HVCC was enacted to facilitate lenders and little more. When the official HVCC complaint dept. is finally available it will probably be out-sourced to India or Pakistan, now that will be a hoot!

Big Mike: (October 19, 2009 6:18am)

Comp Checks have been illegal for more than a decade, I can't recall which amendment the USPAP it was but I d know it had nothing to due with HVCC.

RC45: (October 19, 2009 6:15am)

Comp Checks/ or value checks are not "illegal". As stated by several other appraisers here. You must keep a work file on all values provided oral or written to conform to USPAP. Yes it is a business decision as to whether you want to do these or not. The problem I think most appraisers have with this is there not paid for there time, knowledge or expertise. Unlike loan officers who make a "commission" and are biassed to what the value needs to be. We make a set fee for an appraisal, have to be unbiassed to all parties involved even though we have a client we have to serve. So we do get a little touchy when someone wants us to do work for free, and with the HVCC and most AMC's we are getting less now for an appraisal than we did 30 years ago. With the cost to us to keep license, classes, programs, gas E&O insurance etc....... So no, we don't like to Do work for free. Now if you call and want a comp check and say give me a credit card we will see what we can do. Have a good day.

Faun: (October 19, 2009 6:09am)

Adv: Nowhere does USPAP say the appraiser must actually see the property . . . one of many things absent or included in the USPAP that do not make any sense and serve to degrade the value of an appraisal in the first place. Would you lend money on a home that neither you nor the appraiser actually saw? What is your industry leadership doing to improve your industry "bible?"

Slim Shady: (October 19, 2009 6:06am)

Sure; and you never knew little red wagons were usually red and that Dorothy had to follow the yellow brick road. Seems you pulled a lot of people in and got exactly what you wanted. Have a great week guys.

adv: (October 19, 2009 6:04am)

The info provided by your appraiser in Virginia is misleading, an apppraiser cannot give an opinion of value, this includes a range. so subsequently a comp check violates USPAP (Uniform Standards of Appraisal Practice). In order to give an opinion of value an appraiser must have a work file which includes how he or she arrived at their value conclusion. An appraisal does not need to be in writing and nowhere in USPAP does it indicate that an appraiser must inspect the property!

Joan: (October 19, 2009 5:52am)

Part of the limiting conditions we sign as part of the appraisal report, is that the assignment was not obtained due to a "predetermined number". If an appraiser gives a comp check and then gets the deal because the "number came in", that is considered a predetermined number. I understand the problem about having to pay for an appraisal which may not be of use in getting the loan for the borrower, but what most people don't understand is that the appraisal is for the LENDER's not the borrower. Besides, lenders/mtg brokers would always call several appraisers to find the number they "need". This results in the appraiser "looking" for a specific needed number in order to get the appraisal assignment. "Buying" an appraisal assignment is not to the benefit of the client...which is the entity lending the money, NOT the person borrowing it.

Faun: (October 19, 2009 5:38am)

Maybe appraisers are "touchy" or think it's illegal or a bad business decision to provide a "comp check" but LOs are always welcome to contact the Listing Broker and/or the Buyer's Broker to find out what comps were considered when we put the deal together in the first place. For that matter, appraisers could use that information too, if they wanted to. Most Realtors don't get too excited to show 100 houses and finally go under contract only to have the deal explode because the value can't be substantiated. Nobody in our industry is into wasting time or money, ours or our clients' or industry partners'. HVCC is causing deals to explode needlessly, not because of comp checks, but because AMCs are assigning the wrong appraisers for the jobs. What gets me is there is nothing in HVCC that requires a lender to use an AMC - large banks who own the AMCs are hiding behind HVCC so they can keep more of the loan fees. I'm now doing appraisals first on all my deals to minimize the risk for all.

Appraiser in VA: (October 19, 2009 5:36am)

Any time an appraiser gives a value, a range in value or any direction in value (more than or less than) it's an appraisal. And oral values ARE an appraisal. The appraiser must do all the steps required by USPAP to develop and determine this value and maintain all the work in his files or he/she is in violation of the USPAP. As an appraiser with over 15 years experience I have maintained relationships with numerous banks, mortgage companies and credit unions. If my clients are unsure if their deal will work they sometimes call me for advice. As an appraiser I cannot give them a "yes" or "no" about their deal without performing an appraisal. However, as a consultant (making sure that they know I am not acting as an appraiser) I can provide them with data that will help them make a decision. I can give them the sales price and listing price of comparable properties in the neighborhood which is NOT an appraisal. Appraisers need to lighten up.

Faun: (October 19, 2009 5:19am)

Just another example of how the appraisal industry has failed to police itself. If appraisers always follow USPAP, then why are "comp checks" so prevalent in the first place?! It's not incumbent on an LO or a Realtor to know what's legal or ethical for an appraiser, it's the appraiser's job to enforce the requirements of his/her own license! IMHO, USPAP is a experimental-stage attempt to regulate an industry that was born out of the last severe financial crisis -- the S & L crisis. Simply put, it's a very imperfect means of introducing another check and balance into a real estate transaction. The appraisal industry clearly can't police itself despite the existence of the Appraisal Institute (it's own trade group) and the Appraisal Foundation (which reports to Congress and developed and revises the USPAP from time to time), two bodies which from what I can see are overpaid and underworked, respectively. Where were the AI and the AF when HVCC was shoved down the industry's throat?

Neesh: (October 19, 2009 4:59am)

Without comp checks...what reliable data do we have to know whether or not we should even waste time on a deal? BPO? Certainly not Zillow. My problem with HVCC is that certain lenders are priced way better at low ltvs but suck at 80. If I submit my untransferrable appraisal to a lender and the value doesn't come in, then the borrower is the one who suffers with the jacked price..in other words..once you order the appraisal, they've got ya!

IAappraiser: (October 19, 2009 4:33am)

This just shows how many appraisers have no idea of what there doing. Here in the future it might be better check with appraisers that have a clue of what they can and can't do, since it appears you guys are talkng to the appraisers that love HVCC because they didn't know how to market themselves and have no idea of what they were doing and didn't get any business because of it.

Tn.Appraiser; Randall C.: (October 19, 2009 4:30am)

The problem is, as I see it, when you do a "comp. Check" any give an honest answer (The wrong value) your order for that assignment is dead. Then the mortgage broker simply moves on until they get the guy who "hits' the value.

IAappraiser: (October 19, 2009 4:22am)

"Comp searches" are not Illegal...It's classified as a oral appraisal, look it up. It's only illegal if the appraiser does not keep a file on it as it's classified as a appraisal assignment.

FLappraiser: (October 19, 2009 4:02am)

whether or not we appraisers AGREE with giving a heads up on value to help a consumer not waste money on an appraisal is not the point of last weeks blog.... it's the fact that the LAW does not allow it. I myself don't want to take a consumers hard earned money when I know I can't help them, but losing my license is losing my license... for what, $300??? Thanks for keeping it real and in admitting your lack of knowledge on todays video.

NCAppraiser: (October 19, 2009 3:57am)

Comp checks are NOT illegal. If an appraiser provides a value, range of value or "ball park", written or ORAL, they have performed an appraisal under USPAP. Under USPAP they must maintain a workfile on this value. If an appraiser wants to provide a comp check there is nothing illegal about it so long as they follow USPAP. Whether they charge for these is a business decision. We appraisers are a "touchy bunch".

Old Timer: (October 19, 2009 3:53am)

Frank & Brian, You hit the nail on the head with the LACK of knowledge of regulatory laws. Having ALL parties aware of each others legal regulations would be beneficial for all. Having a single "this is what you can do and this is what you can't" for all real estate professionals will make it easier all. Regulating one without regulating all doesn't work....Keep up the good job guys.