An open letter from our member
American Guild of Appraisers
This letter is to address the issues that effect appraisers today and in the future.
First the independence of the appraiser and safe guards that were implement to protect the appraiser .
Second customary and reasonable fee to be paid to the appraisers and safe guards of enforcement.
Third enforcement by the states and the investigating process and the penalties to the appraiser.
And finally the support to the appraisers from a government agency for protection against fraudulent
complaints and pressure on the independence of the appraiser.
Dodd Frank added the amc to be a buffer between the lenders and the appraisers to
insure the fair treatment of the appraiser and the process. The amc were to add appraisers to a list
and rotate assignments from lenders. The amc were to manage the process that the appraiser be
with out pressure and undo influence. Amc were also to pay appraisers customary fee
to appraisers by as per Dodd Frank by one of the methods 1. Match fee given by government agencies,
2. fee to match work done by non amc work and 3. A survey done from data except from non amc work.
The process has failed and no enforcement on safe guards. The amc is hired by the lenders
and will do what ever the lender wants all the way from loan officers and mortgage brokers and Realtors and
builders and home owners. The amc will pick appraisers on fees and who will fallow the instructions
even thou it is against regulations from entities such as Fannie mae and Fha. The amc do not have true
rotation as they pick and choose the appraiser as they see fit or lender or other parties see fit. The amc
gets compensation from percentage of the appraiser fees and no enforcement or penalty of not paying
customary and reasonably fee and they will choose the cheaper fee over quality. Most states
are not investigating or enforcement of the amcs or lenders of following Dodd Frank. As mention on the hearing
ASC is not investigating or enforcement the state agency of following federal laws.
There is a model that works and address all issues today and that is the Va process.
First address customary and reasonably fee and they set minimum fees. Second they have a true rotation
of appraisers and no lender or loan officers or mortgage brokers or Realtors or builders or home owners
have any influence on the selection of the appraiser. Va has appraisers on staff and review policy
and regulation which is a true support system.
An enforcement agency to review against influence on appraiser
and process must be established. The possibility of FDIC having a bigger
role in investigating of the lenders, Amc and state agencies and any other parties
against fraudulent complaints and pressure on the independence of the appraiser. As all parties
will use state agencies to retaliate against appraisers with out no merit or supporting data. The appraiser
is intimidated by the threat or a formal complaint sent to the the state board as they are who issues
the licenses. In several Incidents the appraiser is fined or penalized for a very small issues
that can cause appraiser to loss his/her credibility and future business and punishment does not
fit the crime. We must enforce a policy that before an investigation that any party must provided data or
documentation to support a complaint. If no data or documentation is provided then the complaint must be dropped.
If there was investigation and no wrong doing was found then all parties must be fined and or criminal charges as
this a possible mortgage fraud. And also reimbursement to the appraiser for worked loss due to the false complaint.
The training of futures appraisers starts with higher fees and less pressure on the appraiser.
First appraisers do not want to do more complex work or complex area such as rural area when they are afraid
of a complaint and true compensation for a complex assignment. As less pressure on appraiser and better fees
then it will be more feasible both for the trainee and and mentor for growth. National association of Realtors
to provided more data to appraisers in rural areas and have the possibility of state wide mls or national mls that
appraisers can have access to. If the National association of builders must provided data support on there
trends if they the appraiser to consider the data.
All items mention in letter can give a process and possible procedures that address
appraisers issues today and future. If lenders want amc to be in the process then let the compensation
be paid from the lender not the appraiser. And have the Amc answer to the entities such as Fannie mae and Fha
and remove the amc's ability to order appraisal and select appraisers. Have less pressure on the appraiser from
state agencies. Have fines and criminal charges on false complaints against appraisers. Finally customary and reasonable
fee for growth of the appraisal industry.
Simon A(Tony) Palacios Jr
Real estate Broker
Equipment and machinery appraiser
Equipment and machinery broker
Certified residential real estate appraiser