This is an incontrovertible fact that these loan originators cannot deny. They’ve all been told often enough by those appraisers who have refused to cross that line. They know appraisers aren’t supposed to accept assignments that are contingent on returning a minimum value but they routinely turn a blind eye to this corruption. In fact, when they do this they become a willing co-conspirator in the fraud that occurs when their “team player” appraisers fraudulently certify on their appraisal reports that they *didn’t* accept either the engagement nor the compensation for that assignment based on the promise to return a minimum value.

Secondly, loan originators really do need to recognize that the purpose of an appraisal is not to enable their loan. The intended use as stated on every mortgage lending appraisal assignment is to assist the lender (not the loan originator) in underwriting and making a loan decision. Loan originators don’t make underwriting decisions, they don’t grant credit, and it’s not their money that goes out the door. All a loan originator does is show loan products to borrowers and sell loans to lenders.

No appraisal report states that its intended use is to help the borrower obtain a loan and indeed borrowers are not named as intended users of appraisals. If a report prepared by one of these “team player” appraisers ever did truthfully disclose that its intended use was to assist the borrower in obtaining a loan or the loan originator in booking their commission, the lender would be required by federal banking laws to reject that appraisal. That’s why these team players have to lie about the nature of these assignments and the limitations of their relationship with the loan originators.

Because appraisals are not intended to be used as part of the marketing package the loan originators send to the lenders in hopes of “selling” the deal to them, there is an inherent conflict of interest when a loan originator engages the appraiser. The loan originator isn’t the one who makes the relevant decision - the lender is. It only makes sense that the lender should be held 100% accountable for the engagement of the appraiser and their use of the appraisal. It makes no sense to allow the lender to avoid these responsibilities and hide behind the thin veneer of plausible deniability that using outside loan orignators would seem to provide.

It is a huge mistake for loan originators to think - or for their appraisers to allow them to proceed under the misconception - that an appraisal is worthless if it doesn’t help the borrower to obtain their loan or the loan originator to book their commission. If an appraisal prevents a lender from overencumbering a property, prevents a borrower from entering into a mortgage wherein they are already under water, then the expense of that appraisal is well justified.

We now face multi-trillion dollar losses in the general economy that are directly related to the subversion of due diligence efforts - including appraisals and underwriting - in the real estate mortgage lending business. Had more loan originators paid more attention to the reasons why they are required to obtain appraisals and refrained from viewing them solely as a commodity or an element of their marketing their loans to lenders we could have avoided a sizable percentage of these bad loans - because after all, these bad loans never should have been made in the first place.

The Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 recognized that the the regulated institutions had to be held accountable for the engagement and their use of appraisals. As a result of these trillion dollar losses, it should come as no surprise to any loan originator that these regulations will be expanded upon and more heavily enforced as a result of the abuses in which many of them participated.

Oh yeah, and a pox on your “team player” appraisers, too. Had they done what they were supposed to do and refused your improper requests we wouldn’t have some of the problems with loan originator ignorance that currently exist.

Seriously, as the monkey has said, we have and do go thru hell dealing with the misconceptions of our profession. Those of us who work within the rules and hold ourselves to a high level of ethics are constantly berated by those who either don’t understand and/or simpley don’t care.

It makes it much more difficult when there are other appraisers out there who constantly do things in what is truly an unethical manner…

The OP said that he spoke to 3 appraisers who said that a comp check is not an appraisal….Kinda makes you wonder about those appraisers…I think that with all the information posted on this blog it has been shown that they are, in every manner, an appraisal.

Heather made a comment about greed in a previous post. She is on target more then she will ever know.

Hopefully readers of this thread have taken something good from it.

BTW, I also know some of the appraisers who have replied to this blog as we all belong to different forums across the internet and I can understand and share the frustration.

Yes, it is his opinion, but has also exposed how many of the undereducated MB/LO’s have little knowledge or do not want to understand USPAP or the long term damage by such business protocols. We are tired of being made the bad appraiser, when many of us love our profession and will continue to do it if we were allowed to do it correctly.

Many appraisers have gone to the Dark Side to appease these kind of business decisions and at the end, the one that gets hurt is the borrower and the American Tax payer. Yes, I am in your face will tell you the truth that such blogs do invite scrutiny, not just by appraisers, but also others that do search the Internet for such blogs. I did not expose this guy, it was someone else before I ever first posted. You may want to question the previous posters.

Should I have sympathy for his opinion? Did he have sympathy for the appraisers professional opinion that did a well researched ethical appraisal? (after all he had to go through many appraiser before he found the right ones. That is just code that he found the Appeasing Appraisers) well, just like his, I have mine, He invited the world to see. I will say it, WE ARE TIRED OF THIS! Not just for us, but for the American Public that has been and continues to be abused.

One thing that you may find out some day is that appraiser that do comp checks are not necessarily the most informed bunch. Here is your answer from the source, Appraisal Standards Board:

http://www.appraisalfoundation.org/s_appraisal/bin.asp?CID=12&DID=1224&DOC=FILE.PDF

The definition of an appraisal, as defined by the Uniform Standards of Professional Appraisal Practice, is noted below:

http://commerce.appraisalfoundation.org/html/USPAP2008/USPAP_folder/uspap_foreword/DEFINITIONS.htm

APPRAISAL: (noun) the act or process of developing an opinion of value; an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services.

Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value).

In the future, please provide support for you opinions, not just the opinions of individuals that have no idea what they are talking about.

If I am called to do an appraisal, I cannot perform it trying to “help” anyone beyond calling it like it is. If I cannot perform a particular appraisal assignment without bias, then I am required by the regulations governing my appraisal license to withdraw myself from that assignment.

When appraisers refer to being “independent”, that is more a reference to the fact that if we are independent that we are not employees of a lender, mortgage broker, etc. Each order that is sent to the appraiser is a new “contract offer” to perform an appraisal. The acceptance of that order is our acceptance of that “contract.” However, if there are “terms” in the contract that are against the regulations governing my license, I have two choices: 1) try to renegotiate those terms, or 2) decline the order.

Brent posted, “When I order an appraisal I need my appraiser to know unless a certain value is there, to not proceed with the appraisal.”

Here is the definition of an appraisal (from USPAP–the regulations governing appraisers):

“APPRAISAL: (noun) the act or process of developing an opinion of value; an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services.

Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value).”

Okay, the questions that come to mind are this:

1. How can an appraiser know if a property is going to meet a “certain value” without performing an appraisal (reread the definition above)?

2. Based on Brent’s statement, if an appraiser agrees to those terms, how can an appraiser know whether or not to go forward if that “certain value” is not a value that has been “predetermined” by the lender?

We really don’t know what the bottom line is yet…..Todays Wall Street action is a result of this situation with other things factored in….

Above someone said follow the money honey….That person is right…and look in the past….

The Dot.Com crash….Those who don’t remember the past are doomed to repeat it..

As for Cuomo deal being dead…As far as I know it has not died yet….

Mack, if you have something on it please share….