Should we raise the deminimus to $2 million? Or $5 million?
By George Dell
Excerpt: To simplify this discussion, let’s note two facts: Appraisers can perform ‘evaluations’, normally using the same scope of work as an unlicensed “evaluator”. What’s the difference? It appears to me that there is one key difference. The question is then: Which part of the service is not required? Is it the integrity/ethics, or the performance (such as using the right data and analysis)?
It appears to me that since unlicensed persons can charge less, have less tax/fee burden (for licensing, education, and errors/omissions insurance- the less ethical, less responsible ‘evaluator’ can always outbid the licensed appraiser every time.
Read the full blog post and appraiser comments. What do you think? Add your comments.
My comments: Interesting analysis by George, of course!! Credit unions are proposing to raise the commercial deminimus to $1,000,000. I didn’t know they made commercial loans. Guess they forgot about the commercial crash in the late 1980s.
As long as Fannie and Freddie (and their investors) require res appraisals, it won’t have a big effect on residential. The FIRREA deminimus in 1989 was $200,000. No effect on much of anything, even though we thought the Sky Was Falling.
The usual Mortgage Cycle: Good Business = lower requirements. Bad Business = higher requirements.
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