Appraisal #FAIL

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A fisheye image of a mid-30's business woman pouting and looking angry.If you are buying, selling or refinancing a home right now, you might be quite surprised to learn about the current state of appraisals. It ain’t pretty…far from it.

Currently, appraisals are taking weeks to be completed and appraisers are demanding fees where it seems the sky is the limit. The fees are so high, it almost feels like extortion. If you don’t accept their extremely high fee and lengthy timeline – you don’t know when or if you will ever receive an appraisal.

Appraisers currently have NO regard for purchase and sale agreement closing dates or locks for refinances. They say they are so inundated with business, they just can’t help it.

Let me back up.

Just a few months ago, appraisal fees at our office typically ran around $550 for a typical transaction and you could expect the appraisal to be back in 10 days.

Let’s skip to now.

We have to wait days for an appraiser to even “accept” an appraisal request. Then you receive two smacks to the kisser – the cost for the appraisal and the length of time it will take before you receive it.

Today I had an appraiser respond that they would accept our appraisal request for a refi as a “rush” providing it back to us in 20 days at a cost of over $1000! A “non-rush” appraisal from this person would cost around $800. There was no notes as to when we could expect to see this appraisal back…my bet is about 4 weeks.

The consumer is who gets stuck with this bill and the delayed closing, which could include lock extensions and possibly lost earnest money if a seller thinks they can get a cash buyer. This is impacting ALL types of mortgages.

Why is this happening? Well…let’s jump way back.

Years ago, I wrote about a New York Attorney General who thought that Loan Officers were corrupting appraisers and therefore, they should not be able to have contact with them.  Cuomo helped created the initial legislation, HVCC, to stop this evil doing. Ironically, it stemmed from Washington Mutual and their in-house appraisers! It was not about mortgage brokers or mortgage companies working with independent appraisers.

What has happened over time is that, thanks to government “intervention”, the appraisal industry does not have to be competitive. period. Mortgage lenders go through an appraisal management company (aka AMC) …the term “management” seems like a farce to me as nothing is managed from my viewpoint. If appraisal management companies were truly about managing appraisals, why are they not adding support staff for appraisers or recruiting to the industry?

As a Loan Officer, I cannot have contact with the appraiser. I don’t even know who the appraiser is going to be. Real Estate Agents and consumers, however, CAN contact the appraiser.

When HVCC first went into effect, many appraisers were thrown a curve ball. They no longer were able to work with Loan Officers they enjoyed working with and many lost income having to go through AMC’s which (IMO) took a chunk of their well earned income to help place appraisal orders.

Back to now.

I can’t help but wonder if this is “pay back” time for appraisers. They are crying and whining they are overloaded so they double their fees. This is something that I could (or would) never do as a Mortgage Originator (even prior to LO Comp, which regulates how a Loan Officer can be paid).  You can’t tell me that the appraisal now cost twice as much?  When I am “over loaded” with business, we add to staff! I’m looking online and I’m not seeing where appraisers are hiring support. Why not take on apprentices to beef up this dwindling field? There seems to be a real lack of planning, management and a bit of greed going around.

What I do know is that this is impacting consumers negatively. Appraisers have everything in their corner and don’t give a damn about your closing date.

Appraisers work hard and I loved working with appraisers prior to the HVCC regulations. I think it sucked to see AMC’s have any part in taking their income. The appraisers I worked with were hard working and honest people.

As much as I’d rather see less government, I’m wondering if more regulation is needed so that the industry follows what is done with VA appraisals. Appraisal selection is random and appraisers are required to provide the appraisal in 10 days.  There were times when the “VA appraisal” was dreaded…but these days, it would be WELCOMED!

This is a hot mess. 

Am I missing something? I would WELCOME hearing from an appraiser!!!

 

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