Jonathon Miller’s original recent article on Bloomberg and follow up article replying to very negative appraiser “trolls”. Most of the appraisers did not read the
Guess What’s Holding Back Housing? – Original article
Jonathon Miller’s Original posting was on Bloomberg and got lots of appraiser comments, many of them very negative and defensive
Excerpts:
During the U.S. housing boom, real-estate appraisers acted like deal-enablers rather than valuation experts. Indeed, inflated appraisals were a key ingredient in the erosion of mortgage-lending standards that led to the housing bust. Now we are seeing the opposite — low appraisals — with unwelcome consequences for the housing market.
A recent working paper by the Federal Reserve Bank of Philadelphia looked at the impact of the HVCC rules on the outcome of appraisals and mortgages, touted as the first empirical analysis undertaken since the agreement was enacted.
The study looked at the frequency of low appraisals, in which the appraised value was less than the contract price. A low appraisal doesn’t necessarily equate to low quality but it could be a concern. The highest percentage of low appraisals occurred around May 2009. This was not only the peak of the housing-market collapse, but also when the agreement first went into effect, easing the pressure on appraisers by mortgage brokers and banks to “hit the number.”
http://www.bloombergview.com/articles/2014-09-25/guess-what-s-holding-back-housing
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Lone Wolves: Appraisers Fighting Everyone, Including Appraisers
Follow up posting after lots of appraiser ranting
Excerpts:
There are many great people, incredible talents and solid organizations within the appraisal profession. But in my opinion only 20% of the industry are truly competent professionals and the remainder are merely varying degrees of form fillers.
I have been an appraiser for 28 years and it is apparent that the industry is dying a death of a thousand knives. One of the key reasons for this slow death is the lack of national leadership and the extreme fragmentation since most appraisal shops are comprised of a single or just a handful of professionals. I’d also like to offer that the majority of our profession seem very willing to make unsupported negative inferences on reviews of a colleague’s work such as appraisal field reviews or troll columns like mine.
To read the full article and the appraisers’ comments:
http://www.millersamuel.com/lone-wolves-appraisers-fighting-everyone-including-appraisers/
My comments:
I have been following Jonathon Miller for many years. He is very savvy and is widely quoted in the media – local and national. Plus, he has a Most Excellent blog.
I agree with Miller regarding the lack of competent appraisers. It is not the appraisers’ fault. The problem is the lack of adequate training and poor education after appraisal licensing. Fee appraisers were expected to train new appraisers. But, it takes a lot of time. Also, poorly trained recently licensed appraisers were allowed to train new appraisers. The recent change to AMCs and UAD have made residential lender appraisers focus on “filling out the form” to fit guidelines and criteria that do not have much to do with getting a credible and accurate value. In fact, the restrictions can result in being hassled if you try to use comps and analysis that are appropriate for the appraisal. Many appraisers just give up and give them what they want.
I don’t know of any other trade, job, or career where participants constantly “bad mouth” each other. The only reason I can see is that their appraisals are reviewed. Appraisers are used to being criticized and look for “problems” in other appraisers’ work.
