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Sandra: (November 17, 2009 10:06am)

If I do not give the AMC what they have "promised" to the lender, will I not receive any more orders? Well, DUH! That is the question each appraiser faces every time they get an AMC order. Worse, when the Big Banks control most of the big AMCs, if you are cut from one, you are cut from all, and have no more income. If lenders were totally out of the AMC business AND were required to accept appraisal orders from any and all AMCs, then appraisers would be able to tell the truth without fear of having one appraisal destroy their economic future. Since I'm jaded and p*ssed off already, I just tell it like it is and am looking to create a new non-appraisal career. The key to fighting fraud is for the appraiser to be able to say "NO!" without it costing their livelihood.

Sandra: (November 17, 2009 9:52am)

Who says fraud has to be value INCREASE? Thurs I rec'd a demand from LandS*** to DECREASE value on appraisal for sale. The reviewer made it clear that she didn't trust or believe anything the Realtors said, didn't trust any sales outside MLS, ASSUMED the worst on everything, wanted me to time adjust even the list prices, and wanted more than 2 sources for everything in a predominantly rural area. Too bad, so sad, the Realtor sold it right on the money per all my research and adjustments, and I did not cave to cut value to make the AMC happy. Then Fri the Asset Manager on an REO demanded I INCREASE value on a Palmdale property to save their "Deal". Due to multiple offers, they over-sold the property, insisted their REO was the best on the market with mega upgrades (NOT!) and that is why I was called and emailed 12 times to hit their value of $275,000 when 2 model matches within 1-1/2 blocks sold for under $200,000 with no negative condition or upgrades remarks. FRAUD cuts both ways

Lynn B: (November 05, 2009 11:32am)

Banks are in business to make money and if they can find a way to do it, even at the cost of consumers and professionals like ourselves, they will do it. And they are most likely the culprits behind the report of inflated values on appraisals. Especially when I read herein that several appraisers have not received any business from the banks or their appraisal tie-ins since HVCC went into effect.

S. FLORIDA APPRAISER: (November 05, 2009 8:51am)

I'VE BEEN AN APPRAISER FOR YEARS. SINCE HVCC WENT INTO EFFECT. I SIGNED UP WITH NUMERIOUS LENDER'S AND THEIR AMC. WHAT'S FUNNY IS THAT I STILL HAVE NOT RECEIVED ONE ORDER FROM THESE AMC NOR HAVE ANY OF MY CO-WORKERS. SO WE CAN ASSUME THAT ALL THE WORK IS GOING TO THE LENDER'S ALREADY EXISTING FAVORITE APPRAISERS.

CA Appraiser: (November 04, 2009 12:04pm)

Humm... Are the number of fraud acts up 46% or is the DETECTION AND REPORTING of fraud acts up 46%? Also the fraud acts being detected today are from loans initiated 2-5 years ago; pre HVCC and during the broker heydays. Sorry brokers, your not obsolved of all sins yet.

Jen: (November 04, 2009 8:52am)

Also, why do you think the bank stands by the appraisal even though you can show CLEAR discrepancies?? BECAUSE THE BANK CHOSE THE VALUE!

Jen: (November 04, 2009 8:44am)

Voice-It isn't the appraiser, it is the bank. HVCC is just a tool for the banks to once again manipulate the market to their benefit. The banks dictate the value and force the appraiser to justify that value using the comps the computer picked. I am an Agent in LA and I am seeing this happen over and over again. I actually feel bad for the appraisers and the position they are in. They have to bow down in order to feed their families and then get blamed by everyone as well. HVCC could have been good if the Banks didn't use it for manipulation and greed..oh wait, that's normal for the banks.

DALLAS COWBOYS RULE: (November 04, 2009 6:42am)

HEY VOICE, Which state is this? The appraisers should be turned in the the state board. Comparables over 27 miles are not comparable to any subject with 17 comparables found in the subject marketing area. Appraisers doing this make our profession look bad.

Look in the Mirror: (November 04, 2009 6:38am)

Voice of Concern - thank you for your comment. It is this type of argument that will help over turn HVCC. We can't argue just inconvenient, and overpriced or that values are not being reached, but out of the area and appraisals not using comps in the area. Unreal that an AMC would allow something with comps so far away go through. Obvious whatever AMC handled these appraisals has no QC Dept. to be sure the comps fit the required criteria. Homeowners should be guaranteed a quality appraisal or they get a refund. If the comps aren't even in your local area, that's not quality.

VoiceOfConcern: (November 04, 2009 5:09am)

This is a crock of ****! I have YET to get ONE appraisal that was done through an AMC that has come into value! As a matter of fact, I've received two Appraisal's to date, that the Bank said they won't use and has turned the loan down. Even when I've disputed the appraised value and sent them comparable sales within a 3/4 month time span. Typical answer I've received is; we are going to stand behind the appraisal that was turned in to us by the AMC and Appraiser!....Example of these appraisal's is as follows.....1) appraiser drove 2 hours to an area he is not familiar with, gave Comps 27.68 mi, 12.46 mi, 15.25 mi and .87 mi. If that's not bad enough, the Bank asked for an addendum to the Comp 27.68 mi away and the Appraiser wrote this in response. "There are no other Comp that supports the historical value of this home. Ma & Pa Barker had a shot out at this location and the closest historical value I could find was 27.68 miles away. The Bank also asked for anther Comp and the Appraiser said there wasn't any. That was a down right lie! I found 17 just myself and the Bank's Underwriter told me that they had found 42. If the Bank's turn these appraisal's down because the Appraiser won't comply with their request, why does a Customer have to pay for it, that's what I'd like to know! Especially since the Bank knows there are other Comps available and the Appraiser isn't doing WHAT he's being paid to do!!..... 2) Appraiser brings in the value at $225K, the bank said they won't use the Appraisal because it doesn't support the value of the appraisal. The Appraiser also put a Ranch in the appraisal when this is a two story home, but is so kind to through 5 (5!!) listings in, that do support the value. Another time I go to find Comp's myself, which was pretty easy, the Appraiser undervalued this home by $25K to $79K and how I've came to this conclusion is once again, easy! Recent sales of like comparable homes within 1 mile showed me FIVE homes that sold within a 2 months and 19 days in the range of $252K and $385K, this last range was what their home appraised for 10 months ago. Unreal that some of these Appraisers are getting paid to do such SHODDY work!!!.....Enough said, get rid of HVCC, it's not only costing the Consumer's more money, but letting the Bank's find another way to RAPE the Consumer and line their pockets even further!!!!!!!!!!!!

Remy: (November 03, 2009 1:51pm)

I understand the HVCC was in place to keep the agents from influencing appraisers. This morning I received a rush appraisal from a well known AMC I accepted the order and called the agent to set the appointment. The agent started to interview me about my knowledge of the area and where I lived and if I was an out of the area appraiser. The listing agent decided he was not going to use me and put enough pressure on the AMC, that I received a call from the area manager saying he was going to reassign the appraisal because the listing agent did not want me to do the report. Because he was afraid the report would come in below the sales price. Do I have any options? Because at this point the AMC is not protecting tha appraiser and are folding to the pressure of the agents. I can handle the agents I don't need help from the AMC. Right now if you don't buckle under to the AMC's who are putting more pressure on us to reach a value than the agents ever did.

Matt, Oregon Certified Appraiser: (November 03, 2009 12:04pm)

Hey Frank and Brian what is your reference source for: "Appraisal Fraud up 46% in Q309 vs Q308 even with HVCC - 11.02.09" Bank run AMC's huh? No more mortgage broker to blame? ..... I think I'd like to write my congressman with a recommendation to read your source material ........... and even make a few recommendations of my own!!!

SimpleSolution: (November 03, 2009 9:51am)

Hey Brian and Fran-Where is the video for today?

Marana AZ realtor: (November 03, 2009 8:40am)

You must have missed the lesson in your econ class regarding supply and demand !

Rocky Mountain High Appraiser: (November 02, 2009 9:57pm)

Received an assignment for a purchase of a Condo with a list price of 119k and a contract price of 130k. Listing Agent said people were lined up around the block to buy this one! Highest sale within that project was 120k. I ran from that assignment...Realtors get REAL!

yamy44ca: (November 02, 2009 7:29pm)

bear - your describing market price, not market value

Bear Hawk: (November 02, 2009 7:25pm)

Inflated values my ass. Every appraisal I am getting from the AMC's they are substantially below market value! What happend to the addage that "value is determined by what a willing buyer and a willing seller agree to"?

Bear Hawk: (November 02, 2009 7:24pm)

Inflated values my ass. Every appraisal I am getting from the AMC's they are substantially below market value! What happend to the addage that "value is determined by what a willing buyer and a willing seller agree to"?

Bear Hawk: (November 02, 2009 7:24pm)

Inflated values my ass. Every appraisal I am getting from the AMC's they are substantially below market value! What happend to the addage that "value is determined by what a willing buyer and a willing seller agree to"?

Greg G. in MD: (November 02, 2009 6:40pm)

How do you turn off this chat? I've gotten several hundred emails today, each time a comment is made

Jen: (November 02, 2009 6:30pm)

By the way, I am in LA where this is bank/appraisal/value problem is affecting 8 out 10 deals I do.

Jen: (November 02, 2009 6:26pm)

Joecolorado- I wish there were more appraisers with the guts to stand their ground on their appraisal. But unfortunately it is more like what HVCCMad described. Also, b/c of HVCC the appraisers are not allowed to discuss anything with me. So when I get an appraisal back that is so obviously flawed even with mathmatical errors, I immediately think the appraiser an idiot. However, common sense tells me that someone with 10+ years as an appraiser wouldn't make such eroneous mistakes. I had to know what was going on between the appraisers and the banks. BUT again b/c of HVCC no one would tell me. So "off the record" or "hypothetically" was the only information I could get. This is a huge problem and from all the comments I read here it is going on everywhere. It seems that to the bank, appraisal/appraisers mean NOTHING. If I were an appraiser I would be fighting mad and do whatever I could to stop the banks from invalidating me and my hard work. As an Agent I am ready to help in any way.

The Herminator: (November 02, 2009 6:12pm)

Hi ! I'm an appraiser of 23+ years. About 6 months ago I got on the list of a lender that "supposedly" did not use an AMC. Turns out they have something called an AIA that is in house that orders the appraisals. Well, finally I got my first appraisal order (you have to bid on turn time), and when I called the department to see if they wanted the loan number or order number on the appraisal, I was told to put the order number in case there was more then one appraisal. Hmmmm. Wonder why that would be....!! Also, they insist they are not an AMC, however, they take 15% off the top for their "service". I hear some quacking there. By the way, I managed to get 1 appraisal in 6 months of trying. Sigh.

george: (November 02, 2009 6:07pm)

with AMCs, i've never even come close to pushing value and the very few times my value has been questioned as low, i've never felt pressure once i state my case (for no additional fee of course). i totally agree with the guys- this has got to be coming from the big boys and their in-house AMCs/appraisers

GREATERGOOD: (November 02, 2009 5:48pm)

GOOD POINT ITSTOO, I WOULD NEVER PAY 50 CENTS WHEN I CAN GET THE SAME APPLE FOR 25. ASSUMING THE APPLES ARE INDEED SIMILAR IN DESIGN, FUNCTION, AND UTILITY.

itstoobad: (November 02, 2009 5:45pm)

finance logic, if the appraiser used all foreclosures was it for a good reason? if the entire market is foreclosure then that may be the best appraisal. unfortunately, the theory of substitution doesnt always work to the agent/lo advantage. "If every apple in the bushell is worth 25 cents, why would anybody pay more than this for your apple?" its all about the functional utility, and theory of substitution. I realize there may be exceptions, but the realtors and lo's need to leave emotions out and understand the true meaning of market "value"

HVCC MAd: (November 02, 2009 4:40pm)

I had a situation where a lender asked us to get an appraisal on a current residence so we could verify value and use the rental income to qualify for a new purchase. They refused the appraisal instead opting for an automated valuation that was not even close. This home was completely renovated and had an additional 1200 sq ft. The home was appraised in May at $295K, the new lender in OCT not only didn't accept the appraisal but said it was fraudulent and used a value of $200K that the UW decided was more accurate. HVCC is a joke. They wanted another appraiser from HVCC, that came in close to the $295K, they said that was fraudulent as well. What the HVCC Batman?

loannetter: (November 02, 2009 4:30pm)

Acutally, FHA Reverse Mortgages do set the anticipated maturity at 100 years to cover how long a person might intend to live in their own home. Guess we are all living longer these days!

HVCC and Coumo: (November 02, 2009 3:50pm)

I am baffled why a few home owners have not sued HVCC over this new ruling..with added fees and longer closings. we need some gun slinging attorney to get to the bottom of why Fannie and Freddie signed Coumos agreement so quickly

Montana Chas : (November 02, 2009 3:43pm)

Financial Logic - I won't argue with your categorization of federal government as stupid, but they didn't pass HVCC. Nobody passed HVCC! Fannie just did it. Why do you think NAMB sued to block it before it went into effect? HVCC was and is purely a product of collusion between Fannie and the State of New York, (read Andrew Cuomo).

FinanceLogic: (November 02, 2009 3:20pm)

I would bet the appraisal fraud is up due to UNDER-evaluations on Conventional (HVCC) appraisals. Using all foreclosures comps in an appraisal report and bringing the value in low IS fraud! I see that all the time and at this point I think My lenders desire the low/overly conservative appraisals! HELLO, if you do a legit appraisal then borrowers have more equity and can refinance instead of being a loan denial. The vast majority of my refi applicants have perfect credit and I deny them due to low appraisals. If each of those folks could save that $300-$400 per month on their mortgage wouldn't that be more money going back in to stimulate the economy! Stupid government for passing HVCC! It's a major over correction causing qualified borrowers to not be able to Refinance!

joecolorado: (November 02, 2009 3:12pm)

There also shouldn't be "off the record" discussions about a clients' value.The client's privacy has been compromised by those appraisers and they should be reported for that breach.They obviously havent the gonads to face the client when needed, now they backbite and stab the client in the back when they are faced with a question.The client needs to be informed about the appraiser's ethical turpitude.No wonder the client is using AVM's.They cannot trust the opinions they have been given by a backstabbing Judas.there is no place for people like these in the appraisal profession,get them out of your Rolodex.

brian tbws: (November 02, 2009 3:04pm)

BIG AL. Who's the lender. We'd like to check into it and maybe get them some more bizz.

joecolorado: (November 02, 2009 3:03pm)

Jen-There is no one forcing good confident appraisers to use specific comparable properties. after all its the appraisers' opinion of value.If the banks' wish to use different comparable properties its their prerogative on their appraisal, but for an appraiser to change his/her perspective on an appraisal to suit a client, is inexcusable.There are few words to express my abhorrence of estimators like those.(They are not appraisers as they dont follow the basic credo of any appraisal report).Their opinion is prettty much worthless as its not their opinion,its the bank's. Please ask them to change occupations to one that will suit their particular abscence of ethics.....politics is a suggestion.

Jen: (November 02, 2009 2:39pm)

The first time the value didn't come in last May I blamed the appraiser for bringing the value in at a ridiculous amount when there were closer, better comps that closed sooner than the ones he used. That deal bombed. It then happened again and again and again and after speaking "off the record" with appraisers I found out it was the banks and their computerized appraisals forcing the legitimate appraisers to cut the value while forcing them to use the comps the computer came up with. I think most appraisers are good and knowledgeable but they need to stand up for their own product and not bow down to the banks.

BIG AL: (November 02, 2009 2:03pm)

Hey everyone, I just got a conventional appraisal order from my old client. He said there going through a lender that doesn't require use of a third party. The party just got smaller:) Regular fee and feels good to bring home some bacon, not the turkey bacon the AMC's dish out. 3 Appraisals for $600 which took alot of time, gas, etc.... I found out it just ain't worth it boys and girls.

concerned american: (November 02, 2009 1:52pm)

Enjoy you real estate profesions while they last. We all need to stop and think about where all these loans are ending up. FHA backs (or owns) 70% of all loans being done now, Fannie and fred make up most of the other 30%. Who runs these????? The dollar is falling with every dollar printed and spent by our government. Inflation, if this trend continues is a fact in the next two years. Remember 15% interest in the mid 80's. That will be a good rate. Guess what will back the dollar in a few years. Yep Real Estate. And with the government backing or owning all of our mortgages?? Guess who will own all the property!!!! OUR GOVERNEMENT!!! .. Guess I need to get Rossetta Stone So I can talk to my land lord who will hold the bonds and titles to our land. LOL.... But on a serious note we need to start watching what is really behind all this.

MortgageAngel: (November 02, 2009 1:52pm)

Cool psychedelics, guys. It reminds me of something... I'm thinking of a title; 2 words, 4 syllables. The first word is also the last name of a literary figure

itstoobad: (November 02, 2009 1:32pm)

I am not shocked by how many agents and brokers do not understand the definition of a market value. In reference to the CA buyer from out of town, just b/c he paid 300k more than everyone else do not make his house worth that, a home value is what the "typical buyer, without duress" would pay for a home. This buyer was obviously not typical. The RE value theory being taught is at best, poor, from what I am reading. An appraisal opinion is part art, part science, all defendable. AVM's can calculate numbers, but nothing other than that. The appraisal business was great, loved it, but the recent garbage, and large numbers of misinformed people in the industry have driven me away. It's hard to argue with mis-informed people. I know the agents and LO's on this board do not want to hear it, but you guys have been mis-educated, and understand very little about appraising with USPAP/state regulations. The appraisers on this board state the facts, everyone else states their desires.

Neto: (November 02, 2009 1:30pm)

Good vid.. but I think you are missing a key stat. The percentage of loans that are originated that are not HVCC loans make up the lions share. Meaning FHA originations should dominate the numbers. Does the report break down the numbers by HVCC / non-HVCC loans? Although I agree that HVCC is a waste and a nightmare for all I am not sure that the fraud finger can be pointed in that direction. Kudos for using the Dr. Who theme..

Old Dog: (November 02, 2009 1:27pm)

Talk about pressure. I'm so tired of having underwriters and reviewers (usually by the name of Tiffany or Heather or Mitsy) who know nothing about appraising, pressuring me to look at and address erroneous data they found on some web site that has nothing to do with the subject AND a host of other ridiculous observations and criticisms. If appraisers are required to maintain continuing education, why aren't underwriters and reviewers required to have functioning grey matter and reasoning abilities instead of a checklist prepared for a cookie cutter subdivision property. AVMs are so poor. If that's what the lender wants, why even bother beating up the appraiser over a value by using their in house reviewer. If AVM's were any good, the banks wouldn't be in this fix and appraisers would be with the dinosaurs.

James the Appraiser: (November 02, 2009 12:35pm)

Well, as I stated this morning, I am off to see that property. Hope you all have fun when I'm gone

Danny Flucke - NaMoEx.com: (November 02, 2009 12:21pm)

Damitall. Now I'm hungry for a baloney sandwich....

James the Appraiser: (November 02, 2009 12:13pm)

Got to love days when Appraisals are at the center of every thing. So many Lender, Brokers and Real Estate Agents don't understand the job of the appraiser, to say nothing about underwriters, that the day is a mess of talk about what SHOULD BE and what SHOULD NOT BE. Then low ball, poor appraisers, put in their half cent worth and create even more crappy stuff and show why they should get out

Valuequestor: (November 02, 2009 12:08pm)

With a SIMPLISTIC definition of Market Value that I'm reading is what Realtors are being taught. You could have Buyer "A" come into town from across the country with no RE experience but sufficient money and credit. They don't look around but find a home close to their new job that they think is nice, its adequate and they are pushed for time. Its been on the market for 400 days and sits now at $299,900 and proffesionals in the local RE biz knows its overpriced by at least $75K. Buyer "A" makes an offer $25K under list because he/she wants a good deal and is no chump. The seller counters at $289,900. Buyer "A" accepts and a contract is signed thinking they have done well. Is this now the new market value for similar homes? Would you pay that much? Do you really want these two market participants to set market value? With this scenario the comps are selling in the $225K range, plus or minus $15K. The simplistic definition of "market value" described earlier leads to chaos.

Starving Appraiser: (November 02, 2009 12:00pm)

HHHMMMM-let's look at it like this .... if, say over the past 2-3 years or longer, maybe only 10-20% of transactions were reviewed it would result in a low % of fraud (hence lack regulations). NOW, after the market melt down & everyone running scared, more like 80-90% of transactions are being reviewed, it OF COURSE would reveal more fraud. Do you get what I'm saying? >>> JAMES, thanks a trillion, since that's the 'illion of our times. Don't see my MLS on the list (we are Paragon) but will be contacting Don a.s.a.p. >>> Before he starts charging for this assistance.

Valuequestor: (November 02, 2009 11:33am)

Yep, I had a video blip. I just watched again and got the sources for the stats. In my experience the "cause" of anything in this industry is usually coming from several sources. The primary source has got to be the thousands of "rookie" appraisers that have been allowed to work unsupervised in this market by the HVCC and the AMCs that have taken advantage of the situation to stock up on cheap labor. In the past they would need to be associated with at least one senior/experienced appraiser. Yes they worked for a fee split but they were being educated and trained while they earned. That relationship has been effectively eliminated. Good appraisers don't just pop up after some classes and a quick training period. After 23 years I still seek advice from my peers. Most AMC appraisers are totaly on their own. Few of the AMCs have an adequate number of real appraisers on staff to answer questions and most of the appraiser / vendors don't want to appear "green" by asking questions.

Barney Frank loves gerbils: (November 02, 2009 11:32am)

I was Barney Frank for Halloween..i had a gerbil hanging from my ass and talked like i had 5 pounds of sand in my mouth all night!

DALLAS COWBOYS RULE: (November 02, 2009 11:29am)

Hey, its always been a willing seller and a willing buyer for a real estate transaction, but the problem today is we have willing buyers, no willing sellers because banks do not what there doing. Thats why they give the listings to Companys that know what there doing. Banks are keeping foreclosures longer to keep prices from tanking or flooding the market.

Scoop: (November 02, 2009 11:27am)

The fraud lends right in to the shift to FHA. It's not HVCC (conventional loans), it's the shift to FHA where brokers still order the appraisal. Just a hunch. And just so you know...I am a broker and HVCC is killing me. But that's just my opinion.

James the Appraiser: (November 02, 2009 11:25am)

www.donsappraisals.com ---- this is the site, look the link to the 1004MC page. If your MLS is not one there or a typical one like Paragon, then you can ask Don to create instructions for your MLS, he is great. He will even call you if he feels that it may not come out clear in an e-mail. I have talked to him more than once to get it working smooth for ours. You will see ours on his list, it is FlexMLS.

Ancient Appraiser: (November 02, 2009 11:21am)

Care for another laugh ! Ezzard Alves, Fannie’s director of credit risk, said that under Fannie Mae and Freddie Mac rules, AMCs may not send an appraiser to a job if he is unfamiliar with the neighborhood. There you go - - it's in writing and they never lie !! Tired of hearing it yet ?

clulessdad: (November 02, 2009 11:20am)

joe,real You both are giving the RE theory some good reason to change. But that is where the RE industry needs to be re-educated, because the real agents out there are being taught that simple definition. Myself included.

Starving Appraiser: (November 02, 2009 11:18am)

James-yes, please provide the link...anything that legitimately helps speed up the process is a good thing. REAL, my standard statement is "It is the appraiser's opinion that there is insufficeint data to determine any significant market trends." I've seen MC reports that reflect ALL properties (sales & listings) in an MLS defined area, sometimes in the 100s (which just isn't the case in my area), instead of just the COMPARABLE properties. Weeding out just the comparables, as the form request, takes more analysis so some apprsrs are just slinging out whatever number the MLS report generates. That's so bogus. A 2000sf, 10 yr old property, is not comparable to a 900sf, 30 yr old or 4000sf 1 yr old house, even if they are all in MLS area Z011.

Gmoney: (November 02, 2009 11:17am)

Appraiser's are influenced by AMC's criteria ! They will ONLY accept certain sales, sales dates, sf, location, date, etc. I can not produce a REAL report. They will NOT accept it if it does not meet THEIR criteria.

Ancient Appraiser: (November 02, 2009 11:15am)

Speaking at the Mortgage Bankers Association’s (MBA) convention, Patricia McClung, Freddie Mac vice president of offerings management, said that Freddie Mac also runs an automated valuation on each property and compares that number to the value submitted by an appraiser in the field. Since implementation of the HVCC, she says, 15 percent more submitted appraisals closely match the automated ones. And we all know how dependable AVM's are ! Give me a break !

Edward the data driven aprpaiser: (November 02, 2009 11:13am)

Big Al hit that one out of the ball park. There is no pressure to get value, but the one time the market doesn't support the value, you get blackballed. Fact of life with the AMC's pay crap, get rid of the good and keep the crap. Can't wait till govt wakes up and puts HVCC to rest. AMCs suck!

Ancient Appraiser: (November 02, 2009 11:11am)

People ! Interthinx.com says there is more fraud in valuation and Freddie says "Freddie Mac also runs an automated valuation on each property and compares that number to the value submitted by an appraiser in the field. Since implementation of the HVCC, she says, 15 percent more submitted appraisals closely match the automated ones. This is all news recently posted by NAR. Which include the fact that "The “Home Valuation Code of Conduct” could be terminated by the proposed Consumer Financial Protection Agency under a bipartisan amendment approved by the House committee." What is boils down to is Freddie, Fannie and the Banks are about to lose their golden goose ! All the arguing is BS started by the source of all BS - - the Banks themselves. Relax and don't believe any of it; but keep writing because your Senators might !!

Ancient Appraiser: (November 02, 2009 11:09am)

People ! Interthinx.com says there is more fraud in valuation and Freddie says "Freddie Mac also runs an automated valuation on each property and compares that number to the value submitted by an appraiser in the field. Since implementation of the HVCC, she says, 15 percent more submitted appraisals closely match the automated ones. This is all news recently posted by NAR. Which include the fact that "The “Home Valuation Code of Conduct” could be terminated by the proposed Consumer Financial Protection Agency under a bipartisan amendment approved by the House committee." What is boils down to is Freddie, Fannie and the Banks are about to lose their golden goose ! All the arguing is BS started by the source of all BS - - the Banks themselves. Relax and don't believe any of it; but keep writing because your Senators might !!

Valuequestor: (November 02, 2009 11:09am)

Great show Frank & Brian. You guys reminded me of The Emperor Xerxes in "The 300". I still feel a strange urge to inflate something. On the serious side, I don't remember hearing or later reading what your ultimate source was for those fraud numbers.

BIG AL: (November 02, 2009 11:07am)

Hi guys, I bowed to the pressure of the AMC by accepting appraisals at $200 per because this is what the AMC guy said would get me on the rotation. OK, I said, lets do it. The next few days came in at one a day. Until I turned in one that didn't make the deal. What could I do, 2 comps were same model, and sold for $25,000 less than subject. I was able to come up due to location, landscaping but was $10,000 short of sale price. Haven't seen an order since. I was supposed to get one a day. If this isn't pressure I don't know what is. If you don't make the value and you don't get another job, no reason. They just stop ordering. They know there on the way out. A short lived, money maker for the Banks and some lucky AMC's. Keep up the fight. I've written to all my California Senators, and Congress.

joecolorado: (November 02, 2009 11:04am)

unfortunately have to leave to take some comparable prperty pix. Hope everyone is well after halloween and that everyone got lots of sugar. Will read the comments later this evening, but have a ethics class tomorrow to attend. remember.....be good, play nice.

joecolorado: (November 02, 2009 10:58am)

cluless-actually you left a lot out of that definition including,the most probable price in terms of money,in a competitive and open market and with no undue influence(a fair sale) with the buyer and seller being prudent and acting knowledgeably.

real appraiser: (November 02, 2009 10:54am)

clulessdad: in my real estate sales class they taught the simple what buyer and seller agree to is price. In my real estate appraising class it would go much deeper in what the majority of people agree to is market value. They can be the same and they can be different for a number of reasons. you are not wrong, just step furter out to see a bigger picture of the same event.

Look in the Mirror: (November 02, 2009 10:52am)

The problem is as Frank and Brian say enforcement of the laws on the books. My husband once reported a very fraudulent real estate deal, all the info spelled out on the MLS. He was told it couldn't be investigated because they didn't have the manpower. Also had a "real estate agent" show my house and because he acted a little odd I checked him out. No license but somehow had access to the lock box. The police told me he could be in my house because it was for sale, reported it to the Dept of RE n the DRE told me to call the police. No penalty for this person's broker or for acting without a license. Can't stop fraud if no one in enforcement cares when you hand them the proof.

Look in the Mirror: (November 02, 2009 10:52am)

The problem is as Frank and Brian say enforcement of the laws on the books. My husband once reported a very fraudulent real estate deal, all the info spelled out on the MLS. He was told it couldn't be investigated because they didn't have the manpower. Also had a "real estate agent" show my house and because he acted a little odd I checked him out. No license but somehow had access to the lock box. The police told me he could be in my house because it was for sale, reported it to the Dept of RE n the DRE told me to call the police. No penalty for this person's broker or for acting without a license. Can't stop fraud if no one in enforcement cares when you hand them the proof.

joecolorado: (November 02, 2009 10:48am)

The 1004MC is a tool that I use if I can prove the information myself.If it jibes with MY data that I know I can prove then the data gets entered in the report.I use information that I can prove in an audit,not just because a computer spewed it out.Its my name on the line so I protect my name and reputation.The appraisals may take a little longer to produce but its worth it,as I dont settle for anything less.I will take my informtion from anywhere I can,I am not proud,but it gets checked and verified prior to being entered and definately prior to it being sent out.

clulessdad: (November 02, 2009 10:48am)

You all make good points. I guess real estate theory and appraisal theory differ in regard to value. I was taught RE theory, where the definition of value is "what a willing buyer and willing seller agree." What I am understanding from you all is that the appraised value is "the price that OTHER buyers/sellers have agreed and that no weight should be given the subject property's agreed upon price." If that is the case, the entire real estate/lender education and training needs to be revised, because that is what is being taught to many of us.

Nor Cal Mortgage Broker: (November 02, 2009 10:44am)

I'm not convinced its "fraud" as much as incompetence. The AMCs routinely assign appraisers with limited geographic experience in our area. Any idiot can appraise a tract with identical homes in a 1 mile radius. I got an appraisal in that claimed there was no value difference between a 2 acre lot and a 1/4 acre lot. Obviously that is not true, but issues like this would probably be greatly reduced if the AMCs would only hire appraisers whose office address on their license was in the same city or town as the property.

real appraiser: (November 02, 2009 10:39am)

Common Sense Broker. I agree with you. There are many arguements to be made against HVCC that are strong. A list should be made that does not include the weak stuff that may actually support the HVCC, like not reaching contract price and distance of appraisers (Some AMC"S are already limiting distance from the appraiser to property)fixes distance problem without addressing compentency

James the Apprasier: (November 02, 2009 10:38am)

1004MC Form (more) my local MLS was not one that worked with his spreadsheet, so I gave him my passwords and a link to the MLS and he created instructions for my local MLS is just over a day. Don't know how long it took him, but he most have other work that doing free stuff for me, so just over a day way great

James the Appraiser: (November 02, 2009 10:36am)

1004MC Form, this form is easy and the data that fills it in can come right off your MLS as an Export feature. There is a website to a spreadsheet that an appraiser created for each MLS for this. It uses the data you get in your research and goes over all the data and fills out the form. Then you can print it for your file or just save the spreadsheet. It even has 2 charts that show trends that I some times include in my reports. If any appraiser wants this I can look up the link and add it here

Appraiser in CA: (November 02, 2009 10:34am)

Just letting you know a situation I just ran into. I am appraising a Bank Owned home in the Inland Empire. The owners stopped paying on the mortgage over a year and a half ago. The bank has "OFFICIALLY" foreclosed on them and put the no trespassing sign in the front window of the entry. However, it is going on 18 months now and the owners are STILL living there! This is where the shadown inventory is. Banks are extending the foreclosure time frame, letting people live in the homes for MONTHS after foreclosing. No sheriffs locking people on the front lawn with all their belongings. The banks go slow so they dont have to write down all the horrible loans they have on their books. Kick that rusty can down the road. The Inland Empire has the 3RD HIGHEST FORECLOSURE RATE IN THE COUNTRY. But there is little or no inventory. Every single house for sale has 10-80 offers on it. The competition/over bidding to buy a house in the IE is crazy. The banks CANNOT do this forever. We'll see...

real appraiser: (November 02, 2009 10:30am)

Starving Appraiser: I have the same problem in pulling data for 1004mc, then realized, the review asks nothing about it. If your final value and report are strong, the 1004mc can not hurt you. Plus, the data is so variable from house to house, subdivision to sub, neighborhood to neighborhood. When I review I look at it to see if its in line with market and the rest of report. I no longer kill myself because the 4-6 and 7-12 data can be impossible to get, replicate, attack, defend, etc. it is basically crap that most UW dont even know how to read. NOT nailing UW's, the 1004mc is a hard read unless there is an abundance of data, which i typically dont have in my market, so I always say its not always reliable as an trend indicator since more data would produce a more reliable trend.

Common Sense Broker: (November 02, 2009 10:30am)

I agree with the idea that the values are being infulenced by the big banks....but it doesn't help the HVCC arguement for us brokers. The reason why is that if the premise above is true, that means their is pressure put on appraisers when they are contacted (we can't do that). I don't think that helps our arguement about the lack of infulence us brokers do/don't have on appraisers. The more appropriate arguement (like ysp) is that we should have equal oppurtunity for competition instead the ridiculous bias towards th big banks and their deep pocket lobbying techniques.

Starving Appraiser: (November 02, 2009 10:21am)

Edward-I didn't see where James sd he was completing all those reports from start to finish in one day. Sd he had 1 on the exit ramp and multiple inspections. The more field work you can do in one day, the more paper work you get done another day. >>>Worn Our & Joe - MLS MC data MUST be analyzed thoroughly as stated. Current comp listings in the 0-3 mnth column can't/shouldn't reflect listings over 90 days old so you have to weed out the older ones, my MLS doesn't do it for me so I spend more time analyzing the data than pulling it. Never do I just count on what MLS produces without analysis.

Appraiser Pete in CA: (November 02, 2009 10:21am)

To: CluelessDad - "So I have 3 questions. Does demand/supply ever play a role in the value? Is housing any different than any other commodity? How can home values ever appreciate?" #1-Demand/supply IS the role of creating values; this is simple economics. Over supply, values down; under supply, values up. #2 - HOUSES ARE EMOTIONAL PURCHASES. If a husband and wife 'just love a house' they are willing to pay MUCH more for the house. They may like the color of the cabinets or granite or the waterfall in the backyard. Remember, this is the house they will raise their kids in, their kids' kids in, their kids' kids' kids in, etc. Gold is a commoditiy too...and Gold has tons of other factors driving it's price, global demand, confidence in paper currencies, fear of systemic collapse of the entire finacial and industrial world, etc. Both are commodities but houses are more emotion driven in my opinion. #3 "How can home values ever appreciate?" SERIOUSLY? Supply/Demand, inflation,etc

Vacaville Realtor: (November 02, 2009 10:18am)

Are the appraisers getting paid less per job? Are they just cranking them out at value to turn out volume? I had an appraiser walk in during the inspection.. she listened to the inspectors talk about the serious foundation issues.. pool issues... broken HVAC...and still came in at top value on the REO property. Where is the pride in your job? Where is the accountability if not to yourself.

Tobby: (November 02, 2009 10:13am)

Frank and Brian's caveat that "if this report is true then..." is the key to this video. The InterThinx report is bogus. This company sells fraud detection services. It's like a Brinks security salesman showing up at your door touting spurious crime statistics to get you to buy their alarm system. The methodology used to claim overvaluation is based upon comparing appraisals to an AVM. WELL, anyone that has done battle with a CoreLogic report lately knows how bogus these AVMs have become. The AVMS include short and REO sales which depress the values. Appraisals, correctly, weed out unqualified sales. Wonder of wonders, the InterThinx report says that most of the "fraud" is in the bubble states, right where one would expect a lot of bad AVM data from short and REO sales. The report further mentions short sales and REO scams which would impy UNDERvaluation fraud. You can view the report at this site: http://www.interthinx.com/pdf/09_Q3MFRI_FNL.pdf

real appraiser: (November 02, 2009 10:11am)

Clulessdad: most appraisers will see market increase and adjust, your scenario (if as you say, and no other factors are affecting) should have the value in the range you indicate. Markets go up for several reasons(cash paid, smaller house price goes up on larger home prices around it/progression, buyer pays difference because they really want home, bidding wars will always have buyer pull more money out of pocket) all these are market related true increases in value. In a stable market, if buyer pays more for home that what the market would pay, the appraiser is the fuse in the line. if the house is worth more than the asking price, usually a quick sale. If you are either party with limited knowledge of price and value, you want a good appraiser. the key word is good. Your conditions, if left unchecked, will allow people to get together and overinflate for their own greed and you know this to be true. The appraiser is the fuse in your wiring, would you direct wire your car or house?

joecolorado: (November 02, 2009 10:06am)

cluless-ever think HOW the highest sale in the neigborhood was appraised?hmmmmmm If its the highest sale and is being used by an appraiser as the highest value in the area, WHO appraised THAT one and why shouldn't the LO go and get the appraiser that did THAT appraisal to work their own mortgage situation. Two comps above wouldnt work in that scenario. I consider ALL proerties in the neighborhood, searching mls, assessors, newspapers,contractors,anywhere the financials can be verified.If I cant verify, I mention the sale but dont use it, to illustrate there is an active market.

sus socal: (November 02, 2009 10:06am)

I'm an appraiser working in the So Cal market - low to mid range products are limited ($200-$650K)- so the agents get multiple offers - CASH & 30%+ down buyers offers are accepted (cash sales no appraisal - 30%+ down - buyers have cash to make up the difference from apparaised value to agreed sales price...News reports of Foreclosure Rates remain HIGH.... HUM....limited current inventory, High Forclosure Rates...SO where are all the New Listings for these Foreclosure/Short Sales ??? ONLY THE SHADOW INVENTORY HOLDERS have the answers.....

James the Appraiser: (November 02, 2009 10:02am)

Clulessdad: we covered this, if the appraisal comes in at 270 and you buyer wants to pay 285 then they need to come up with the 15 extra from their pocket. Then that becomes a new sale that can be used to increase the next sale. The demand increases prices when the buyers are willing to dip into the pocket to pay the extra demand.

joecolorado: (November 02, 2009 10:00am)

Problem is that AMC reviwers are generally not licensed within the state they are reviewing. Seems like a licensing/competency problem to me...But to reiterate, why would you jeopardize your license because someone other than you, has demanded a change in YOUR report! If they dont like your figures tell them to get their own, yours is staying the way it was sent.If they want another report they need to come up with the money to buy one!Remember as it has been sent in cyberspace it is there FOR EVER no amount of changing the report in your computer is going to change the one that is already out there. If you do change it you better have a brilliant reason WHY you changed it as the State will be asking why you originally sent an erroneous report in the first place. (see rock-hard place)

NotSurprisedinSoCal: (November 02, 2009 9:56am)

I've read most of the comments. The prevailing problem seems to be that human beings are GREEDY and many of them are without moral conscience and lack the ability to be totally 100% honest in all of their dealings at all times. Humans are definitely the one and only problem!

Clulessdad: (November 02, 2009 9:55am)

Actually I kinda agree with Blackhawk. EG-House listed for $310k, in a cookie cutter neighborhood. 4 offers on it, at $305,310,310, and 315K. Appraisal came in at $285K, where other sales were $282,285,284. There were some amenities that could bring the value based on other deals to $290. (Seller took 285) Demand is pretty good with 4 solid arms length offers. Does demand ever enter into an appraisal? Is an ounce of gold what it was last week, or is it what today's buyer and seller agree? I have a hard time differentiating the two commodity transactions. Lastly, I honestly don't know, based on this thinking, how the property values can ever appreciate. No matter what the buyers/sellers agree, the value will be $285K. But if there is a sale of $270, that new "comp" will bring down future sales. So I have 3 questions. Does demand/supply ever play a role in the value? Is housing any different than any other commodity? How can home values ever appreciate?

WornOutAppraiser: (November 02, 2009 9:54am)

REAL - RIGHT ON!!! i get these NIMRODS 3000 miles away telling me what comps i should use - get real! I asked one guy,who was in PA (im in CA) that he had no business reviewing my report and is violating uspap as he does not have the geographic cometence to do so - i told him when a local appraiser reviews it i will respond then!

joecolorado: (November 02, 2009 9:52am)

Stats can be manipulated to suit whatever condition is needed,its the interpreting of that data to a situation and knowing when the stats are incorrect which takes the skill. It takes nads to stand up for your beliefs in that you are correct. Most AMC's have reviewers that are also under the gun to produce. AMC's also have to produce. No produce...no work...there alone is a shed load of pressure to MAKE things work. when appraisers like me dont kowtow to AMC pressure it causes them problems, ergo....no joe...too bad sad. I will however change to adapt to the situation and work out a method of getting more work.I am not afraid,there will ALWAYS be available work.Again,I give good appraisal.

James the Apprasier: (November 02, 2009 9:48am)

Edward the data driven appraiser - Most often I would agree with you, and I do reviews from time to time as well. But three of the last 6 reports I have done, all within 9 days, are within 2 blocks of each other in the same sub-division. So the data research is the same for all, gee even got to use them all as PENDINGS for each other. Nice that I can report in the report that I have seen the other houses too, inside and out. Only the new construction and todays inspection are different areas. The the 3 reports can be done as I saw then all over the weekend. But this is not a typical case, your right in that respect

real appraiser: (November 02, 2009 9:48am)

joecolorado. Part of my problems are the AMc reviewers asking us to change anything. IS THIS NOT PRESSURE to change data in the report to fit their interpretation of the dat, which is usually wrong since they are comparing it to their own markets. They do not sign the report, why is this allowed. The report should stand, unless the data is ABSOLUTELY wrong(like a sale date in the future or similar typo). A review appraiser should never ask for changes, just clarifiaction or more detail. If the appraiser is wrong, then they should correct only. Am I wrong on this, AMC REVIEWERS SHOULD LOSE THEIR LIC/CERT for asking appraisers to change anything in a report that is not an ERROR.

WornOutAppraiser: (November 02, 2009 9:46am)

JOEC - the 1004mc is a joke - it pulls expired and withdrawn listings which naturally are going to skew the numbers - listings usually expire when they are listed TOO HIGH!my mls throws everything including the kitchen sink in the report and is a poor analysis of what is really happening in the market - i have to spend a lot of time actually analyzing the data myself and not relying on that report - here is some advice i think may help - look at the data CAREFULLY urself - you have the knowledge needed in your area and don't depend on a report that frequently makes no sense - this practice has helped me.

e-homeappraiser: (November 02, 2009 9:43am)

One of your best videos. No fraud here. I don't get any pressure for values, because I won't do appraisals for AMCs or lenders. I will, when they start paying my fees for competent reports with supported non-biased values. Won't compromise 33 yrs in the business.

Edward the data driven appraiser: (November 02, 2009 9:42am)

James the Appraiser. How can you pump out three credible reports and go on an inspection in one day. That is my point about slash and burn appraisals. I reviewed 20 reports over the last 6 weeks and only one of them had original comp photos the rest were from the MLS. This is slash and burn and putting a bad image on our industry. There is no way that one person can pump out credible reports in that time frame. Gathering the neighborhood data to determine contribution adjustments, marketing, property values over time cannot be done in such a short frame of time and have credible results. I'll stick with my Rolls Royce appraisals and you can pump out your Yugos all day long, we shall see who is in business longer. This is of course assuming that you don't have a staff working in the background.

joecolorado: (November 02, 2009 9:41am)

My comps all had dom's in excess of 180 days, my listings were in excess of 180 days, all reducing their asking prices periodically,the market could have been skewed by the low number of recent active listings/sales and the high sales prices of two of them sold in the neighborhood which probably skewed the stats.HOWEVER the AMC's reviewer wanted me to remove the downward indicators as the stats showed different. I requested but did not get a letter asking me to do so. All of my indicators showed my statistics as being more correct than the skewed data from the mls. who is correct? I know I am because I can prove why I didnt use the mls stats. BUT who is going to be removed from the AMC's approved appraiser list? HMMMMMM let me think.....and do I care!!!!!

Starving Appraiser: (November 02, 2009 9:40am)

Joe- the 1004MC data is nothing short of BS in my area. Reflects flucuation, which is not uncommon and not a trend. I believe it was intended for the few areas that have the most RE related issues going on. Just more work for me that isn't relevant to my market.

Loanwise: (November 02, 2009 9:37am)

SoCal, I am a lender in SoCal as well. There are areas such as Irvine, CA that are going crazy...There is not enough inventory for the amount of buyers. The buyers are putting in anywhere from 5-18 offers on short sales. However, SOME listing agents are taking a much lower offer and ONLY submitting their "double ended" offer to the short sale lender. This is causing lower values due to lack of morals/ethics. It should be against the law. Short sales are the terminal illness of this market...

real appraiser: (November 02, 2009 9:37am)

EVERYONE should remember that we are all in different markets were things are going to be vastly different from one another. One comment that implied appraisers are weak to stand up to AMC's is wrong. If they ask for comps within 90 days, 20% in size and 40 other restrictions, they are dictating the final value without pressure, just another way the HVCC is flawed. I wish that FRANK & BRAIN would use that arguement in the NEW HVCC PETITION VIDEO and not the under contract prices which is an arguement for HVCC. I know they do not think so but you can NOT make the statement of contract price not being hit unless you have proof that the appraised values are intentionally low and not "an opinion".

James the Appraiser: (November 02, 2009 9:35am)

Starving Appraiser - THANKS, he just set me off. I have 3 reports to write today and an inspection at 2PM. Just sent the first one off and starting a new construction one now. Work has been coming in at a record level this month, a record for this year any way. Best month of the year to date. THANKS for putting me right, going to go get a cup of joe and cut into this new report.

joecolorado: (November 02, 2009 9:32am)

SoCal-I had 1004MC data from the MLS we use that stated an increase in prices,asking and attaining and a decrease in Dom. I KNOW this information is incorrect, but I included a copy of the data into the report, stated in the 1004MC form that the stats shown are skewed and incorrect and marked the relevant items on page one correctly as decreasing markets,over 6 months and and over supply.Dont know where the MLS got its information,but it was definately incorrect. The particularv area has MANY foreclosed/ing homes,lots of properties on the market for sale and most have d.o.m's in excess of 180 days. go figure,but to put anything other than the truth, relying on data that you know is incorrect or suspect is criminal. Appraisers need to be aware of what is going on ALL the time and not fully rely on 3rd party information as gospel.

Edward the data driven appraiser: (November 02, 2009 9:31am)

Well I have started doing reviews lately. What is see most that scares they lenders is a lack of data to support conclusions. I have seen appraisals indicating decreasing value, making adjustments and not including any support for such reasoning. What is sad is that when the data is reviewed the values have remained stable over the period or have increased. Overall, I believe that those AMCs are running out the "good" appraiser's who do the report the "right" way and use newbies who just rush out reports as fast a possible and in a fashion that they think is "safe" and will pass the underwriter. If they would just do there job, use the data that is available, they can easily support their appraisal if an underwriter or review slashes their report. I have a 100% win rate on rebutting idiots that fail to read the content of the appraisal report. Do your work, put out a good product, back conclusions with data and you will always have a good result.

Starving Appraiser: (November 02, 2009 9:28am)

Hey James, DUDE, are you having a bad day? This doesn't even sound like you. Thought we'd learned to "ignore" the ones just trying to stir things up. Your post are usually more positive and productive than what I'm seeing today. Take a breath and don't get caught up in the games.

WornOutAppraiser: (November 02, 2009 9:27am)

What is defined as fraud? an inflated appraisal is not necessarily fraud - for it to be fraudulent there has to be an intent to provide false information to inflate the value - i do a lot of reviews and i see both - but generally what happens is u get an out of area appraiser who does not have the proper data or geographic competence to do the assignment - he/she doesnt understand the market area and produces a bad report - while they are in violation of numerous USPAP guidelines the intent to commit fraud was not there - if they are including those reports then the numbers may be right - this is one BIG problem with AMC's - when an appraiser signs up generally the AMC asks the appraiser what zip codes they cover so appraisers can put anything down then when they get an order that's too far for them they send a trainee - they usually get the work because they have the lowest fee. AMC's should assign the areas to appraisers at 10, 20 and 30 mile intervals depending on density.

BupkissNBuckwheats: (November 02, 2009 9:24am)

So lets pull together and shame those loan officers and realtors out of the business. Its not the appraisers fault at all. Appraisers work hard for their fee and are by and large genuine and honest in their opinions of value. Lets help the FDIC examiners find the real culprits in our communities.

iam2520: (November 02, 2009 9:24am)

Prices inflated ? Numbers are in too quick...how do you KNOW... are the comps using Foreclosures or worse short sales (hidden re-capture $) or bank owned....De-Valuation big Time. Compared to the same home now for sale that is prestine well cared for and selling via the owner... what they should get 10-20% less then a distressed property.? O R is it the properties bought in 08 that have been fixxed up and are now coming back from foreclosure hell ... bought LOW (see above) and now at a par with the rest of the neighborhood. Finally the 3-6% in Seller concessions that never show up anywhere...where is the NET price?

real appraiser: (November 02, 2009 9:24am)

James: I agree with you that the "buyer/selling agree to a price= value". By definition it is wrong, unless you pay cash like you say. The point is defend the answer, do not get personal, it helps no one. There will always be those who want realtors, appraisers, brokers and such out of the industry. I beleive we all have a part and all have some blame, because there are bad apples in all our groups, ALL OF YOU KNOW IT TOO. If you are honest, be polite, harch critism makes you look like one of the bad apples. this is not a dig on anyone, But if you rip someone for a question, no matter how simple the question, you do not have any place in this process I thought was to help each other out, just my two cents.

joecolorado: (November 02, 2009 9:22am)

worn out-They will probably be contacting everyone to see if they can get THAT one through....but SCerra did the right thing, JUST SAY NO.maybe at some point they will get the message.

SoCal Realtor: (November 02, 2009 9:21am)

Don't want to be slaughtered (apparently you guys hate realtors) here but IMO there is far more UNDER valuation going on. I only need FMV or somewhere near it to sell a house--but even with clear comps to support, the appraisers I've encountered are ULTRA conservative (even when market addendum shows increasing value, decreasing DOMs, increasing prices--they mark stable to decreasing and will hack away with time adjustments when we are seeing price increases here.) I think they are afraid of the idiot 18 year olds at the AVMs who are going to beat them up undeservedly--so they just turn in an undervalued appraisal to be safe. It hurts the market and makes the recovery take all the longer. I think we webt from overvaluation issues and now we've traded them for undervaluation issues. Stinks. Realtor in SoCal

James the Appraiser: (November 02, 2009 9:20am)

appraisitall - see we live in horse county far north of the bay area. It is others like him that came here no looking before they spend that we all smile at. NOTE, the real estate agents took advantange of these buyers with hands full of cash too, working deals for an amount that the buyers would not need appraisals for buy finding out just how much cash they had to pay and then working wioth sellers to over price property. Saw it every day in 2004 through 2006

WornOutAppraiser: (November 02, 2009 9:18am)

SCERRA - Please tell us who this AMC is so the rest of us can avoid it - you should keep a printed copy of the order and send it to your state agency - if they regulate AMC's they could get fined - if they don't now they probably will in the future.

BupkissNBuckwheats: (November 02, 2009 9:17am)

Sue Sawyer hits it on the head. The so-called Realtors have always had there way with directing loans to their favorite WAMU or Countrywide loan rep who fudged the numbers for them and controlled the appraisal selection process. Look around you California, where are those agents now? There back in business with BofA pretending and acting as a loan preapproval rep for guess who? Many of the agents that perpetrated a fraud against Fannie, Freddie and the FDIC. Yes, you must get preapproved by a crook who works with crook real estate and is trying to make their 3rd or 4th commission on the same property in less than 5 years. Smells like churning to me. Where the heck are the federal examiners for fraud and why aren't prosecuting these realtors and accomplice "loan officers" to the fullest?? Perhaps attorney general Jerry Brown is too busy preparing his campaign to ramp up statewaide fraud investigation. Look around you, you all know the particular realtors and loan officers involved.

James the Apprasier: (November 02, 2009 9:17am)

appraisitall - you did miss it, I said he came from the bay area, I don't live there, ha ha, see, you can't read.

James the Appraiser: (November 02, 2009 9:15am)

appraisitall - maybe you and blackhawk are the same, and you think Ucan AppraiserItAll, I bet you are one of the appraisers that drives 100+ miles to do a job for $200, as you know the value is always the sales price

appraisitall: (November 02, 2009 9:14am)

So saying, and I quote what you said: "We all smile as now they have seen that they got it in the A$$." This is not enjoying their misfortune?? I did not miss anything. Just stop writing and go out and enjoy your "fantastic" 3 acres in the bay area

James the Apprasier: (November 02, 2009 9:07am)

appraisitall - what misfortune? The guy made a lot of money and it is his to spend. I would never tell him how to spend it or that he could not pay that much, it is his money after all. I was just pointing out to blackhawk that just due to the fact that some one paid more that value for a home does not make that the value to the area, did you miss that too?

Jen: (November 02, 2009 8:59am)

suesawyer: the banks are cutting legitimate appraisals by 20% without our involvement. They are killing deals left and right and dictating home values so they can lend less and have a less risky investment. Who does this help? Not the buyer, not the seller, not the market, THE BANK! Of course us Realtors will re-direct our buyer to another lender when these shady practices take place. Some appraisers are bowing down to the banks, using bogus comps crammed down their throats by the banks so they can justify the banks cut in value. Appraisers should hold their ground and not cave under the prospect of not getting that next gig from that bank. Grow some balls!!

appraisitall: (November 02, 2009 8:59am)

Hey James....It's nice to see that you enjoy other people's misfortune!!! You ARE indeed a MORON!!

Starving Appraiser: (November 02, 2009 8:56am)

SUGGESTION-Let's not get into bashing one or the other (Agents on this day). Apprsrs, lenders, banks, homeowners, buyers, etc.,... we all need agents to list & sale so we have work. There are the good, the bad, and the ugly EVERYWHERE. Agent pressure is not new, and as apprsrs we should be willing to consider their input, but as stated "JUST SAY NO" when they don't have anything pertinent. In my 25+ yrs apprsring, there have been a few occaisons where the agent provided data that was useful. It's rare, but does happen and when they don't have a leg to stand on, I tell them why their info is not useful. As for FHA repair issues, I believe some lenders, maybe many, lean towards the apprsrs that ignore FHA repair guidelines, but I'm not one of them.

James the Appraiser: (November 02, 2009 8:55am)

blackhawk - every day brings me joy and happiness. The fact that we have one stupid moron that came from out of the area with a pocket full of cash does not mean the rest of us here are morons. But it is typical of all the areas like mine in this county, that those with hands full of cash came here thinking that they could get 3 acres cheap. They sell in the bay area for 1M and come here and pay $700K and thing they hit gold. We all smile as now they have seen that they got it in the A$$. Lol, but your comments show that you know little about value

minker: (November 02, 2009 8:54am)

I think it's that lenders are calling everything fraud.......no matter how perfect an appraisal I put together underwriting rips it apart.....One got sent back because the last space for a photo on a page was blank but I didn't erase the default "Subject Interior.....boy am I bad and fraudulent!!

minker: (November 02, 2009 8:54am)

I think it's that lenders are calling everything fraud.......no matter how perfect an appraisal I put together underwriting rips it apart.....One got sent back because the last space for a photo on a page was blank but I didn't erase the default "Subject Interior.....boy am I bad and fraudulent!!

SCRREA: (November 02, 2009 8:50am)

Just had an AMC want me to do a 2055 (drive by) for $42.00, thats a joke, with 3 sales, 1 pending and 2 actives. Guess what? They Gave a value range the sale comps must fit!!!! I did not respond in any way.

blackhawk: (November 02, 2009 8:48am)

Here comes the name calling...So I'm Stupid?...Your the one that lives in a neighborhood of MORONS that pay $700K for a home you say is worth $417K. You fit in just fine!!! Have a nice day. May your Monday bring you joy and happiness.

Starving Appraiser: (November 02, 2009 8:47am)

Blackhawk-We've had this discussion before & I agree w/James. NOW, look at it in reverse, mom & pop are off to the nursing home, out of state heirs just want to get things settled quickly, so they sell the house for say $20K less than market value. Does that mean the value "POOF" just dropped for all properties in that area? NO, it means price is not always value, as with any product, not just real estate.

James the Appraiser: (November 02, 2009 8:41am)

blackhawk - STUPID, the buyer has to pay the extra over the value of the appraisal. How long (short) have you been in this business? Did you have some one else take your test?

coach: (November 02, 2009 8:39am)

As for the early comments, if a purchase price is $425,000 and appraiser come in at $400,000 the purchaser has an option of comming up with the extra cash, the lender will always lend on the lower of the to numbers contract or appraisal; thus if the value is influenced by something an appraiser can put a finger on.. he (the borrower) can come up with the extra $25,000 and thus transaction a success and value might go up with a good closed sale.

Starving Appraiser: (November 02, 2009 8:39am)

Just the Facts-I also thought this was interesting.... report on increased fraud from an organization that is recruiting appraisers to root out fraud.... Fox watching the henhouse scenario seems to me.

suesawyer: (November 02, 2009 8:38am)

Get the realtors out of the process. They threaten the lenders and the appraisers if they do not come in at value. They control the buyers and send them to the lenders who WANT their business. Nothing has changed. They just have an easier way to push values with the HVCC...slightly less detectable.

blackhawk: (November 02, 2009 8:37am)

Then home values will never increase. Every underwriter is requiring atleast 2 similar homes to support the high end of an appraiser's value. How can values go up of there is always a glass ceiling?

James the Appraiser: (November 02, 2009 8:35am)

blackhawk - you are part of the problem, just as the guy down the street from me paid $700,000 for his house just 6 months after I paid $417,500, is his worth $700,000? He came in with cash from outside the area, no appraisals, and he thinks he got a deal (the owner/builder is sure he did). As an appraiser I could not have gotten it to $500,000. SO NO, just becouse you find some fool that is willing to pay to much does not make the house worth the sales price.

suesawyer: (November 02, 2009 8:34am)

It is the Realtors. They send borrowers to the lenders and threaten to send them somewhere else if the value is not met. The lenders pressure the middlemen if value is not met and they appear to be tweaking the software to exclude the honest appraiser. Nothing has changed. The Realtors have always pushed and threatened - even calling the appraisers directly with their threats. The HVCC has only given a more direct path to cheat. Why don't we go back to giving a 3rd party (the appraiser) the right to do the work without any Realtor envolvement. Realtors should lose their license if they direct borrowers to lenders.

suesawyer: (November 02, 2009 8:34am)

It is the Realtors. They send borrowers to the lenders and threaten to send them somewhere else if the value is not met. The lenders pressure the middlemen if value is not met and they appear to be tweaking the software to exclude the honest appraiser. Nothing has changed. The Realtors have always pushed and threatened - even calling the appraisers directly with their threats. The HVCC has only given a more direct path to cheat. Why don't we go back to giving a 3rd party (the appraiser) the right to do the work without any Realtor envolvement. Realtors should lose their license if they direct borrowers to lenders.

coach: (November 02, 2009 8:33am)

If banks really compete on a level playing field with brokers; they can never have staff appraisers who do the original appraisal; its ok to have review appraisers for quality; however if banks employ appraisers and the appraisers who are indepentent are hurting for work; thus the staff appraiser may inflate values to keep there jobs and not have to enter the real - indepentent market.

real appraiser: (November 02, 2009 8:32am)

Trapper, they can call the "hot line" at the "Institute" established by the HVCC. Damn, my bad, 18-20 months after HVCC was enacted and it has NOT yet been established. Maybe they can stare really hard at the HVCC Web page and kill it like George Clooney does with goats in his new movie, problem solved. If that works, tell them to stare at Cuomo next,(wishful thinking on my part)

joecolorado: (November 02, 2009 8:31am)

Blackhawk-that only works when you pay the price with your own money and not borrow from someone else.

Greg G. in MD: (November 02, 2009 8:30am)

If anything I would think the fraud on the part of portfolio lenders to DEFLATE value to permit them to impose add on charges for "high LTV".

blackhawk: (November 02, 2009 8:29am)

Isn't a home worth what somebody is willing to pay? If somebody is willing to pay $425,000 for a home and the appraisal comes in at $400,000. Who is right?

NW GUY: (November 02, 2009 8:23am)

I'm surely not seeing inflated values as most are coming in BELOW assessed value. Property sales by my search sources show Values should be about 5-15% over in most cases. I have changed my business plan now doing only Purchase and sales.

Trapper: (November 02, 2009 8:20am)

This whole HVCC debacle makes my stomach turn. One of my friends who is an appraiser, told me the AMC made them change their appraisal putting the banks comps which lower the price by 100 grand, yes a lower price go figure! They say they can't work like this and really did not know what they could do about it.

el jefe appraiser: (November 02, 2009 8:18am)

....To finish my thought. The value came in at $400,000. This is what is wrong with the system. And, lastley, I think real estate agents should have to get an appraisal done before they list a property. That way the values can't be inflated. No pressure towards anyone. Come on agents, I know you are out there. Bring it on. You bunch of know it alls.

ruapruved: (November 02, 2009 8:16am)

Interesting spin. Does HVCC cover FHA? What does the report say with respect to a breakdown of fraud as it relates to FHA versus CONV originations? What would you say your % of business is CONV v FHA? 95% FHA?????????????? I think that would be industry standard. Can a broker/banker order an their "own" appraisal on FHA? I'm not surprised at all about the report, and to flatly state "it isn't brokers" is foolish at best. You gotta come stronger than that...

Starving Appraiser: (November 02, 2009 8:15am)

CLUE- Down w/AVMs, EXAMPLE - just did a SF w/6 very comparable sales less than 9 mnths old. HO was not happy w/$202K, sd it apprsd for $230 within the last year, but come to find out that $230 was an AVM number. House is 6 yrs old & pd $176 new. Lender agreed $202K was fair appreciation and value for our area. My number did NOT change. AVM is a nightmare.

el jefe appraiser: (November 02, 2009 8:13am)

My wife is a loan officer. I can't do appraisals on her loans, but I do comp checks for her, so that she doesn't do too much work on a loan that will never work out. My wife is doing a loan on a purchase. Purchase price $425,000. Appraisal comes across her email, value $425,000. However, she looks at it, calls me in to take a look. I review it. Low and behold, 3 solds, 2 listings. 5 comps, 2 of which are way over three months(actually up to 7 months old), and 3 comps that are at least 1.5 miles away! Talk about inflating value. I relooked at the appraisal on my own, picked the best comps, oh yes, I actually know and how worked the area, and what do you know

GC@BMI: (November 02, 2009 8:08am)

Just shared this with my old appraiser and he agrees wholehardedly with the banks committing the fraud. He cited an example of Wachovia (prior to Wells officially) about 4 months ago called him and asked why his appraisal was with 4 bedrooms and "another appraisal" had 5. The 5th one was in the basement, he explained. He asked why they got another appraisal and they advised him that "they felt his was a little low for the market and wanted to get another opinion". Hardy har har.

ej: (November 02, 2009 8:08am)

My stance has always been if the AVM is THE value why waste time and borrower money ordering a real appraisal. mjust go with the AVM and let the values fall where they may! this is exactly what happens when we let the crooks write the rules. They (HVCC companies) are the only beneficaries to this entire FUBAR!

real appraiser: (November 02, 2009 8:07am)

Clulessdad: Good post, I am with you, all numbers can be manipulated when they want to reach a goal, and selling AVMS is a cash cow.

Starving Appraiser: (November 02, 2009 8:05am)

Thanks for the confirm Joe & James, now I'll not refer to that issues as a "rumor" but fact. But there it is for all to see...Bank owned AMCs (& I hear that's the majority) can make the value whatever they want to make to loan work and you can bet your arse they do. >>> I disagree with the post stating lenders will not return to previous process... I've spoken with 2 of my long time clients and they indicate they will return to ordering themselves as some/many of their loans are not going thru due to apprsl issues and delays. More loans closed means more $$$ for the client.

Gold Coast: (November 02, 2009 8:01am)

The problem here folks is not the Brokers or the Appraisers. We are the scapegoats for the banks decision to loan money to people who stated their income. So it is always easier to blame others when you blow it. So the Big Money is blaming us, Banks, Wall Street and others. The truth always prevails. I won't work for 50% less money, Others will but the quality of the appraisal will suffer because you are getting the Appraisers who don't have work and there is a reason why they don't.

Clulessdad: (November 02, 2009 8:00am)

Have any of you gone to the sitehttp://interthinx.com/press/fbn.php? Of course appraisal and mortgage fraud is up! They are trying to sell their 4506T and proprietary AVM model to combat the problem. Come on people, this is a scare tactic to get mortgage companies to buy their products. Just how could anyone measure that there is a 46% increase in appraisal fraud? In order to determine that you have to take the appraisal and compare that to what? An AVM? Has anyone seen an AVM that is above the appraisal? And they are concluding that the AVM is right and the appraisal is wrong.

joecolorado: (November 02, 2009 7:57am)

Spooky-I know its the minority you are talking to,unfortunately the honest appraiser appears to becoming in the minority if I read it right.What do LO's,realtors and brokers do when they see a fraudulent appraisal?Do THEY report the appraiser to the State?We can't ALL be the bad guy.(I know there are crooks in every profession),but there has GOT to be an answer to this debacle somewhere.

Frank: (November 02, 2009 7:56am)

Mortgage/Real Estate Person: The report specifically said they were inflated..

QTRHRSE: (November 02, 2009 7:49am)

Just lost a loan due to an HVCC appraisal coming in $40,000 lower than expected. The house was just down the street from a sale in the last 6 weeks. The very same house!

joecolorado: (November 02, 2009 7:48am)

Spooky-Never said I dont get pressure.I get pressure EVERY day,I just have the cajones to say no.The pressure NEVER stops,it NEVER goes away,it is ALWAYS there,the difference is that I have the Nads to say NO(and I say NO a lot).I am not afraid of losing clients due to that pressure and neither should anyone else.I,like others,am proud to be an appraiser.I have worked long & hard at getting my name synonymous with quality,honesty & integrity, my mum and dad(both deceased)would be appalled if I even considered reducing the standards they instilled in my brothers and I.It horrifies me to know that there are others out there sullying my profession due to their parents relaxation of standards.They probably will not be the ones leaving the profession,it will be people like me that say NO.We are losing good appraisers every day and the outlook is bleak.So I changed my M.O. to less lender based operation,we'll see how that works.

LVApsr: (November 02, 2009 7:44am)

Big Banks using their AMC's, which are now requiring all forms be AI Ready. AI Ready Appraisal report may be manipulated, if Data is easily extracted it's possibly also easy to change. Just a thought.

Seriously Speaking: (November 02, 2009 7:41am)

HA HA HA! That is the best news I have heard this month! (yeah I know its the 2nd but who cares this still may top everything else for Nov). If this doesnt show, case in point, how stupid Cuomo and his "industry knowledge" / completely BOUGHT agenda's are, then help me figure out what is. To point the finger at brokers, stating THEY are the sole reason for appraisal fraud, impair loans to qualified borrowers and near wipe out the appraisal industry nationwide, to get these results?!?!?!? LMAO Cuomo <pronounced> (dodo), WAY TO GO. You did it! Destroy an industry that probably needed a tweak NOT an implosion, Hurt well qualified bwrs and INCREASE the fraud in appraisals!!! Did he get voted in with Obama???? Their policy seems to go hand in hand together. lol Next RAPID thing to implement without thought... Healthcare! Can Obama top Cuomo....??????

Nice Job Cuomo: (November 02, 2009 7:41am)

Fraud up. Banks own the AMCs. Banks now make money just placing an appraisal order. Banks make a ton of money making a loan. Banks are the fraud problem. They screwed the appraisers, brokers, but they are really screwing the consumers.... NICE JOB CUOMO. You really created a mess.

Mortgage/Real Estate Person: (November 02, 2009 7:40am)

Furthermore, the Fraud that this article is reporting could be about the ordering process: AMC's, appraisers, etc. Look at the whole process (BIG picture). There are many things that can go wrong when a "Third Party" with no Regulation and Minimum Standards of Expertise are allowed to become a middle man...

CO Mortgage mama: (November 02, 2009 7:36am)

I have first hand information from a local broker buddy. His appraisal (ordered from AMC) was a few thousand short, he called his AMC and asked them if they could talk to the appraiser. The contact asked (I am NOT kidding) "how much do you need"? and POOF he received an appraisal within 24 hours at the value he needed. How do we get this to anyone that can do something about it? He sure isn't going to rat out the AMC that helped him close another deal.

Mortgage/Real Estate Person: (November 02, 2009 7:32am)

One minor problem with today's video: Fraud is up 46%. tha doesn't neccessarily mean value is being inflated. There are a couple blogs, that mention one of the bigger problems-appraisers new to FHA and never require FHA repairs. I haven't seen/or read the report Brian and Frank were talking about. It just seems a little presumptuous that the Fraud is just in the VALUATION. There are hundreds of other things that can be going on; it's possible this report is referring to some of them.

spooky: (November 02, 2009 7:27am)

This goes to Minority. I've been appraising since the 80's as well. I find it UNBELIEVABLE you've never had pressure to inflate a value. Never got an order that said "We need $amount to make this deal"? I wonder what corner of the country your from? where all the lenders are honest and have never put pressure on their appraisers??

James the Appraiser: (November 02, 2009 7:25am)

Starving Appraiser - YES, some AMCs require you convert your appraisal using LIGHTHOUSE, an ACI produce. Even if you use Alamode as I do, they require you to convert it with Lighthouse. This lets them change the report when they get it, so it is true. I stopped working for them when they started this requirement a few years back.

joecolorado: (November 02, 2009 7:24am)

Just refused to join US Bank as their reports are to be in AI format. Their fees are acceptable but that AI format stinks....what was the appraisal institute thinking?THAT signature removal process endorsed by the AI goes against EVERY appraisal tenet that I know.

Loaner...: (November 02, 2009 7:22am)

It's a political stat to get rid of FHA free form appraisals... You think appraisers are corrupt? You should dig into out elected officials...

Hardly: (November 02, 2009 7:22am)

Here's an explanation of Inflated Values. They are a completely predictable result of HVCC. An AMC orders a report from Skippy who needs the money badly. No one told him what value to come in on and he is clueless, but he knows if he comes in too low, AMC will stop sending him business. He pushes it to at least 10% above the most reasonable value. AMC loves him and sends him lots of work. L.O.s KEEP the extra 10% profit. Yes, you guys - the ones who complain to the AMC when Skippy does NOT give you an extra 10%.

john g: (November 02, 2009 7:21am)

I don't know how they're being OVER inflated....On the last refi I had on my books the appr came in just fine. Then the lender got a hold of it and it came back $95K less. The appr was on we've used many times before (we were alolowed to order since it was non-conforming) They're on every lenders approved list.

BuckeyeinCA: (November 02, 2009 7:19am)

The appraisal fraud increase makes sense to me. If the less experienced and less ethical appraisers now have more of an even chance of being able to obtain an appraisal order by "color-blind" AMCs, one is going to see an increase in thoes business practices and appraisal quality. There is one major AMC run by a former appraiser who has a revoked license! Another says they will chose the best and most experienced appraiser for the customer (so they can avoid going through the yellow pages) when its policy is "first comes, first serve." The first appraiser (or whoever!) responds back to a text message, receives the order. Actually, the only pressure I received from L.O.s, which I always resisted were from those I had no established relationship with. My regular and preferred brokers simply ordered the appraisal and generally never questioned the indicated values in my reports. And they paid on time. I have one AMC who has already admitted they lied when sending my check- 90+ days old.

beaumama: (November 02, 2009 7:17am)

I too am highly skeptical about this report of inflated fraud reports. I work for Landsafe and Rels 99% of the time these days - yes their fees stink, but I just work more to make the same, and the volume is there. And I have to say, NO PRESSURE. I feel a bit nameless, just a number, but no pressure whatsoever to hit a number. Just a little sad, though. Lots of Preforeclosure drivebys and REO requests. Hardly meet anyone at the property any more.

joecolorado: (November 02, 2009 7:13am)

AMC's which require the report to be in AI format note that the signature is removed and stored.This was brought to my attention by commentators of this site. so THANK YOU guys I appreciate it.I dont do AI format appraisals.Now I need to knwo which other format permits this type of manipulation,'cos I am computer naive.

Texas Appraiser: (November 02, 2009 7:13am)

I have spoken with a few of the folks from the lenders that were previously my clients. Sadly, I have been informed that - even if the HVCC is overturned completely, they will not be reverting to their previous procedures for ordering appraisals. The primary justification for this is fear. They are afraid that the reversal of HVCC will only be short-lived, and they would be required to go back to using AMC's anyway, and they don't want to scramble the prodecures manual any more than they already have. These are the same folks who called me to inquire why I was no longer working their files, as they were told by the AMC that I declined the work. I wasn't OFFERED the work! They are hiring appraisers 60 miles away, because they are willing to work for a more "competitive" fee. I'm feeling close to a career change, but the real estate industry is running out of opportunities that are reliable!

EdC: (November 02, 2009 7:10am)

Did you hear that gas at $3 a gallon is 46% fraud? It's true

EdC: (November 02, 2009 7:07am)

It must be California appraisers

joecolorado: (November 02, 2009 7:05am)

I appraise to the market.If the value "hits" the figure then whoopee,if it doesn't,thats too bad, blame the market,I just report the facts,so dont kill the messenger.I say NO several times a day.Its no big deal.I have no problems submitting an appraisal with a value that is market driven.I sleep well at night and dont worry about State audits.I have done my job making sure that the investors money is as safe as it can be. Appraisers need to be confident in saying no to pressure.SO DO IT.The pressure wont stop,it NEVER stops,just keep on saying NO.There will ALWAYS be more work for an trustworthy,honest,ethical appraiser but the trust has to be earned.SO EARN IT!as for hitting value,EVERY appraisal should hit a value if its a market driven value.Its hitting a required figure is the problem.There is a big difference between hitting a value and hitting a figure.My fees are set by ME.I know MY worth.If you think I'm too expensive,move on,stop wasting my time'cos time is money.

SoCal Appraiser: (November 02, 2009 7:05am)

If Interthinx is including FHA appraisals in the data then it makes perfect sense and i am surprised it is not higher. I stated in an earlier post that I have been an FHA appraiser for 10 years. The new "Fraud" comes in the form of the new FHA approved appraisers that have found "FULL FEES" by doing FHA. These new FHA appraisers promise to not come back with any FHA repair requests which facilitates the loan going through faster. I have had several companies call me up to find out if I do FHA appraisals and they all ask "do you ever ask for those repair things?" to which I answer yes, and their response is well then we can't use you because we already have a couple of appraisers that don't ever make any requests and we just can't waste the time or money on repair requests. Just another example of the prostitutes that are rampant in our business.

Big Mike: (November 02, 2009 7:04am)

Cuomo needs to die! That would be a good "message" for the rest of those winny little rich brats that dadies are setting up in office. To fix the entire world is simple. Line up all the lawyers and shoot every other one. Then anounce that if things don't improve over the next 364 days on the 365th day we do it again. Why do we allow these worthless scum to mess it all up?

Starving Appraiser: (November 02, 2009 7:04am)

Maybe it's the AMCs that are inflating values. I've heard that some AMCs require software that allows them to remove the appraiser's signature and make whatever changes they want to the apprsl reports. I don't work for any AMCs so would like to hear from some of the AMC apprsrs here re: the software "rumor" I've heard.

EdC: (November 02, 2009 7:03am)

hahahahaaa first time home buyers credit lol. Inflated values by 8 grand. idiots

Big Mike: (November 02, 2009 6:55am)

I am an appraiser is Northern CA and in the 1990's I was working with Loan Brokers who loved to call the tune. I was forever defending and fighting for relistic values. I have also done over a million dollars in appraisal fees with large banks. Boys there is a diffenence. I would be willing to bet that there is very little to no support of factual data for the story you quoted. You guys are about half right though, the media and the large banks love to point their fingers at appraiers and brokers. Have you ever watched a senate hearing on banking and seen an appraisal group their to tell their side of the story? Of course not because it has not happened. If the appriasal groups were allowed to speak then the banks would get all pissed off. And Seantors are always looking for money to run for re-election from the very same banks they regulate. How nice.

Bye: (November 02, 2009 6:54am)

I have been getting inquiries from lenders about appraisals we did 3 years ago. It is possible that the fraud that is now being reported is the result of work that was completed some time ago. There is also the possibility that current work is being performed by people who have inflated the reports without communication from lenders OR that some lenders have found ways to still communicate with appraisers. Anyway you look at it I will be starting a new career in the next couple of months. I have enjoyed 17 of my last 20 years of appraising. I have watched banks create great increases in value by offering unlimited financing. I have watched banks dump their foreclosures and create very low values. I have watched my income get reduced by 50-60% and my assets in real estate become worthless. I'm ready for some new challenges as I watch my home go into foreclosure.

appraiser: (November 02, 2009 6:54am)

I have typically been anti-broker on these blogs but as someone stated earlier it takes two, what I see is we definitely have an abundance of appraisers who are willing to push values and there is also an abundance of appraisers who simply dont know what they are doing. I really believe the HVCC is the first step in removing appraisers from the whole process. When appraiser no longer have the trust/confidence of the people/community in general you have to find an alternate way of valuing properties.

Starving Appraiser: (November 02, 2009 6:50am)

WOW!!! I find it hard to believe, that the majority of 3Q RE transactions have been thoroughly reviewed being that 3Q is barely 30 days old. This, like most of these "reports", are subject to revision in the near future. BUT, it will be good for the fight against HVCC and like opt 4 in the poll, be interesting to hear what Cuomo has to say.

EdC: (November 02, 2009 6:39am)

How can they saw appraisal fraud is up? Foreclosures? Defaults? It makes no sense. Almost 50% foreclosures? WTF. It makes no sense. If I wanted to commit fraud and was busy 24/7 I'd be lucky to affect 10% of the market. Logistically it makes no sense and I'm offended 100%

MINORITY: (November 02, 2009 6:39am)

Just found you guys. Quite funny! As an appraiser since the late 80's I guess I'm in the minority because I've never had anyone ask me to inflate a value. I have had them try to give me data to justify a sales price, but if they can justify it that's not inflating a value nor is it pressure - well unless you think asking you to do your job properly is pressure. I think the whole issue is one of definition. Define pressure and define inflate.

appraiser guy: (November 02, 2009 6:39am)

I agree with the guy who mentioned the question from Mgmt companies and Underwriting, "why did you not use such and such sales"? Not only are these short sales/foreclosures, but they are often as much as 500 to 1200 square feet smaller than the subject? What a waste of my time. What about the special instructions by the AMCs. I have one that has 12 pages of special instructions? Fortunately I don't get hardly any work for them. One last note, encourage your larger clients to handle the HVCC rules in house with an appraisal rotation handled by non-production staff. I just got hooked up with a company that is doing this that is good for 10-15 appraisals to my company a month! 2-3 more companies like this one and the AMCs can just lose my profile!!! I have another great client that has gone through about 5 AMCs and are very diappointed with their performance (imagine that). I hope by this spring I will convince them in developing an internal rotation as well =)

EdC: (November 02, 2009 6:34am)

How could appraisal fraud be up 46%? Are we talking just one house? What is the value of their measure? I just don't think that's possible

appraiser: (November 02, 2009 6:33am)

Lets try to be clear guys? Is this information based on FHA appraisals or conventional appraisals? I still do FHA appraisal for independent brokers, and I am absolutely still shopped by brokers for value when doing FHA loans. So there is definitely still pressure if your old time clients do FHA loans. In my experience with these guys they typically offer full fee or at least close to it which would make them very attractive to someone who has been effected by the HVCC.

Landsafe suxx: (November 02, 2009 6:33am)

I work for a Big Bank..... I laugh at the notion of inflating values. The "Fraud" is in the quality of the appraisals. When you are GIVEN work, why try for accuracey when you can PUMP them out and move on to the next !!!! The path of least resistance is too tempting...

Penny: (November 02, 2009 6:33am)

To Painful Truth Appraisal Services Who are you to continue to blame mortgage brokers for everything? What are you appraisers willing to do to continue getting business? It takes more than a broker to get these fraudulent deals done. I am sick and tired of the mortgage brokers being blamed for this real estate crash and NOW appraisal fraud? The initial blame lies with our illustrious politicians. They are the crooks along with several other organizations. They created the sub-prime, no doc, loans that opened the door for fraud.

EdC: (November 02, 2009 6:27am)

Ohh hey - and the recession is over. Banks are all healthy and the dollar is not being smoking printed. Banks and their amc's are not a monopoly as their primary concern is consumer satisfaction. Come on folks, it's over. No more need for bailouts ! Ignore the 15% unemployment and rising gas prices. It's over!! It's in the paper so it must be true, right? I guess GMAC didn't hear

Mark V: (November 02, 2009 6:20am)

As I have said before, it is not and has not been the Mortgaeg Brokers falut for any of this appraisal or financial mess. Guess where it goes back to --- the BANKS. Stop punishing the Mortgage Broker and go after the Banks for a change. They own the AMC and they have gotten FAT on the backs of the Appraiser. I still say that the AMC's are violating RESPA since they are stating that the "appraisal" fee is $350 when in fact they only pay the appraiser $200. Isn't that a mark up and a clear violation of RESPA???

SoCal Appraiser: (November 02, 2009 6:20am)

Most posts so far have made excellent points and I will not repeat them. One thing that has not been brought up is the fact that HVCC only applies to loans going through Fannie/Freddie. This means that anything not going through Fannie/Freddie can still be ordered direct from the appraiser. In my area of So Cal, a large percentage of the "in trouble" properties that people are trying to refinance have loans that exceed Fannie/Freddie limits & with financing for these larger loans becoming more available it does not surprise me one bit that valuation fraud is up. For the record, i am a 3rd generation appraiser with 23 years of experience, I have the SRA designation with the Appraisal Institute, I have been an FHA appraiser for more than 10 years. I spent years acquiring clients who appreciated quality work with honest valuation & lost all of them to HVCC. I am doing everything in my power to find a way out of lender based appraising. So yes, the good appraisers are leaving.

Nike 'em 'till they Glow: (November 02, 2009 6:17am)

Brian must me the new model Dalek! The Doctor will defeat you like he did the last time! Die you evil machines Die!

EdC: (November 02, 2009 6:16am)

AMC's are the banks retarded brainchild that costs everybody that has to deal with them. They are buying off newspapers now. AMC's are such a profit center for their bank owners that they'd outright lie and pass it off as the truth. That headline is an outright lie

Ancient Appraiser: (November 02, 2009 6:15am)

Old Timer hit the nail on the head. Right now it's almost impossible to appraise a property at it's current value. For every ten legitimate comparable sales there are two or three "short sales" or Bank owned dumps that have sold. These are the one's the underwriters want used. I guess if we don't use them we must be inflating appraisals. Three more months and I am out of this business. Great being a short timer!

EdC: (November 02, 2009 6:08am)

Red herring. As if the only fraud is raising values. Sometimes the news is the fraud. This backs up the amc model of ripping values lower as fighting fraud. Blindly ripping values is incompetence, not quality experience. Remember, amcs are all about appearances because they lack the skills and intellingence to be "managers"

FL appraiser/realtor: (November 02, 2009 6:03am)

AS an appraiser I have always gotten a full fee from the very few AMC's that sent me work occasionally. Recently those few AMC's will not budge from their large percentage of the fee from the lender. I REFUSE to work for any AMC unless I get my full fee. Let the AMC's get their fee from their client, the lender, not the appraiser. Appraisers MUST unite and learn to say NO to the AMC's unless your full typical fee is paid. If enough appraisers say NO, the number of AMC's will dry up. After all they are in the business to use the other professionals for their own gain. I say enough stand your ground. Remember you are entitled to make a reasonable profit which includes your time in the equation, many appraisers are forgetting that part of the equation and end up giving their time for free to the bloodsucking AMC's. Down with AMC's they are the worst thing that has ever happened to this industry. Appraiser UNITE, grow a pair, or a spine and just say NO!

Painful truth appraisal services: (November 02, 2009 6:03am)

It is FHA fraud from brokers.

In need of a bailout appraiser: (November 02, 2009 5:35am)

Since the inception of HVCC (Helping Valuation Careers Crash)small shop, ethical appraisers have seen their profitability evaporate. Many of these experienced appraisers, which have tried to fight the good fight and not work with AMC's are finding themselves looking for a different occupation. THEY ARE LEAVING THIS BUSINESS IN DROVES! Which leaves you with an disproportionately high level of inexperienced appraisers trying to eke out a living at the bargain basement pay scale which the AMC's are paying. Knowing the only game in town rests with the big AMC's and keeping these clients happy, not all, but MANY inexperienced appraisers are finding the path of least resistance as well as the pathway to continued workflow rests in giving them what they want. Although this new research is more than likely slanted, (no one ever manipulates statistics to ther benefit, right?) as is many times the case, there may be some small truths hidden in there somewhere.

joecolorado: (November 02, 2009 5:32am)

hvcc has not created bad appraisers, bad appraisers created hvcc.Again we are left with the question WHY do some appraisers put their license in jeopardy by inflating values?..... apparently they dont...as it is still happening. We need to get the State authorities to be more proactive in punishing these idiots.If the statisticians know there is overvaluing,they know WHO the appraisers are,why are they not being reported to the State for punishment?I also would like to see infractions like this resulting in license loss,not a slap on the wrist.As for USPAP,what a joke..obviously the classes we are all mandated to take,dont work.Ethics apparently cannot be instructed in a classroom,by an itinerant teacher.The State licensing authorities need to be the police of the industry not the independent appraiser as that is not working either.What a fiasco!Thanks for the Dr.Who music,I havent heard that aural extravaganza for nearly 25 years.

ArizonaBrent: (November 02, 2009 5:20am)

I owned a brokerage for 7 years ad now work for a FDIC. I loved being a broker, but the model does not work right now. Regarding appraisals....Trust me.....They don't have an agressive or optimistic appraisal department. Nobody does!!!

RC45: (November 02, 2009 5:14am)

I do work for several of the larger AMC companies That pay "my" fee. None of them are bank owned. Since the HVCC arrived I have not been pressured to hit any number. NOT a fan of the HVCC!!!! But do like the less pressure. I agree that on an AMC if you come in consistantly lower on appraisals you will be taken off there rotation, and the real estate agents will request you not be used. ie... One appraisal I completed of an older home, the home had some updating. Better quality than most homes in the subdivision, used two sales from subdivision two from neighborng sub division and came in $40000.00 less than contract. No sales in either would support the value. Agent raised !@#%.. I asked her to find comparables. She sent back homes over 1000 sqft larger and on golf course. I tell you this to show it isn't always the appraiser. She was an agent in the businness for 20 years. I am with FRANK & BRIAN in that if what was reported about the fraud being up it is from the bank owned AMC's.

Anonymous: (November 02, 2009 5:12am)

Here is the Interthinx link with their Fraudbytes newscast that clearly shows the conflict of interest: http://interthinx.com/press/fbn.php Thank goodness for the internet where boots to the ground solution providers can quickly spot the propaganda and educate consumers on the challenges that will be faced. As is too often the case, these challenges are due to politicians lacking compassion for those they represent and seeking emotional headlines that lack valid information. This leads to more Central Planning government results called consumer protection regulations. The result of self serving arrogance from far removed cause & effect politicians. Shrink the government and the brilliance of the citizens will shine. That is what gave the United States its competitive advantage over the rest of the world in attracting the best of people. Power to the citizens not the politicians!!

Appraising 25+ years: (November 02, 2009 5:08am)

No pressure from AMCs? What a joke. Work for almost free or loose the work. Give them real values, and suddenly you get no more work. Been there and done that. Won't whore myself for those bastards.

Just the Facts: No Spin: (November 02, 2009 4:58am)

Real Estate Appraiser & Broker. Please do a little simple research before exposing your bias. Type in "Interthix 3rd quarter increase appraisal fraud". You would present yourself in a professional trustworthy fashion if you do some homework before commenting. Emotional spew is the last thing our country needs when searching for effective solutions to our challenging times. You can have a positive impact in your profession when you share your productive solutions.

Just the Facts: No Spin: (November 02, 2009 4:49am)

What a hoot. Interthinx is providing research that says there is an increase in appraisal fraud. Yet, they have a conflict of interest as this is intended to increase the sales of their product/service offering. What kind of pressures are the owners of this company putting on the research people to come up with inflated fraud reports??????? I think it is time for a Fraud Research Management Companies to be created to avoid this conflict of interest. As well, send in the FBI to investigate the undue influences this information thrust upon unsuspecting Politicians & Lenders.

St Pauly Girl: (November 02, 2009 4:40am)

I hate to say it..."this new info is GREAT, in that it will only help to smash HVCC out of the lending environment". I hope it forces new rules disallowing banking ownership in any AMC used for that banks origination process. Keep up the communication with local law makers and continue voicing concern over this poorly implemented scam called HVCC. Moving forward...There should be no reason for any appraiser to get pressured for value- appraisers have a choice in who they will accept appraisal orders from; thus they can terminate any relationship that lacks integrity (and they should).

Real Appraiser & Broker: (November 02, 2009 4:34am)

I don't think this info is correct, did you get this from Fox News? That might explain it. I get calls every week from realtors upset that the appraisal is extremly low from the contracted price. Seller's think that we are working for the buyer to get a lower price after acceptance of the offer.

Old Timer: (November 02, 2009 4:19am)

The only scenario I can see that would explain the increase in appraisers overvaluing (ha..ha..ha.., sorry, I tried to write it without laughing...) is this:.... As an appraiser, I am ALWAYS getting these AMC's asking me "Why didn't you use these sales", which are usually bank owned or short sales "liquidation values NOT market values".... The lenders are using AVM's to verify values, however, these AVM's are mass data sites that do not differenciate between "liquidation and market values", therefore, the values they provide are lower... Maybe that's where the "overvaluing" is coming from....***MUST GET FRANK & BRIAN MORE VALUE***

Hate HVCC: (November 02, 2009 3:58am)

Where does one get a statistic that Appraisal Fraud is up 46% Quarter over Quarter? Could it simply be that there are more regulators looking into appraisal values quarter over quarter?

See ya: (November 02, 2009 3:54am)

As an appraiser, I feel like the ONLY good thing about the HVCC is less pressure regarding value. However, I have seen where values can affect your being on an approved "rotation" list as well (think MoonDistrust). I'm just sayin'. This data has to be either wrong or distorted to fit someone's agenda. Thanks Brian and Frank for what you do.