By Barry Bates
Appraisal is not rocket science, but it’s been around for about 300 years and it worked pretty well when the principles were kept simple and the consequences for ignoring them were disastrous. It would also have been nice if individual lending institutions still had to hold their own loans into perpetuity.
The “Just Pap” is more unpopularly known as the Uniform Standards of Professional Appraisal Practice, which came into being after the last big residential mortgage greeding frenzy (the failure of S&Ls in a 17%-mortgage-rate environment during the late 1980s).
Before your friendly author proceeds violently to eviscerate this not-even-very-well-meaning document, let’s get a minor but nonetheless irritating question off the table. Now you have to pay $75 for a copy of USPAP when, as a matter of public law, it should have been free to read. The solution? The Appraisa; Foundation put it out on the web where it’s free to read (uspap.org), but you can’t download it or search it effectively. So you still have to pony up the bucks.
My central thesis today, children, is still that a bunch of crusty old MAIs and soulless bank appraisers saw an opportunity in 1986 to create a bureaucracy that funds free trips to meetings where crusty old MAIs and soulless bank appraisers can assemble to get pleasantly drunk. This entity became The Appraisal Foundation, an organization designed to foster high appraisal standards that are written in weasel words even Donald Trump could circumvent.
It’s hard to know where to start; there are so many things wrong with USPAP. As an overview, suffice it to say that its structure appears to be designed so that over the long haul, most responsibility for bad loans can be offloaded to appraisers making less than $100K per year.
About Barry Bates
I have known him personally for over 30 years. He has a wide variety of appraisal “experiences” over the years, which he writes about. In his 42 years of appraising he has had different jobs, from a staff appraiser to senior management. He is lots of fun to chat with!
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