Now that we are a week into May, I wanted to personally thank you for your efforts in regard to creating the Home Valuation Code of Conduct (affectionately known as the HVCC, or "Half-assed Values at the Cheapest Cost" to those of us in the appraisal industry).
But seriously, I applaud your efforts in allowing Fannie and Freddie to get out testifying in the Washington Mutual/eAppraiserIt lawsuit. I mean, what would that have accomplished anyway? Actually proving that the lenders who were pumping our financial system full of suspect loans were well aware of what they were doing? If you had actually prosecuted that case, it might have caused a major financial meltdown that could have collapsed Fannie and Freddie. Good thing you just let them make a deal. Can you imagine if that had really happened?
Anyway, that whole thing with WaMu and eAppraiseIt was silly anyway. I mean, it was only in your lap because the LENDER was pressuring the MANAGEMENT COMPANY (who was of course pressuring their contract APPRAISERS). And of course the best possible solution was to develop this HVCC, which solves that whole problem by having the LENDERS order directly from the MANAGEMENT COMPANY!
Wait a minute, that doesn't sound right, does it? If I'm getting this right, the HVCC, which was set up in response to a lawsuit alleging pressure from a lender to a management company, now essentially forces lenders to order from management companies. Well, at least we know that if the lenders aren't allowed to pressure the appraisers any more, the appraisals will be more accurate since the appraisers can now focus on doing the job correctly without having to worry about all that "pressure".
Whats that? The AMC's only hand out assignments to the appraisers willing to work the cheapest and fastest? Well, that can't be right either. Wouldn't that be an inverse relationship? Maybe I've got this wrong, but I've always told clients that they can get it fast, cheap, and accurate -- pick any two. All three is impossible unless your goal is to be broke and exhausted.
Okay, so maybe you didn't get it all right, but at least you made sure to separate the relationships, so that large lending institutions can no longer own these appraisal management companies. I mean, appraisers have to be impartial, right? Those AMC's can't have Big Brother threatening to take away their sales meetings in Vegas and Christmas bonuses because of trivial concepts like "accuracy" and "impartiality". But what am I worried about, that would never happen, right? I mean, how stupid would some manager have to be to walk down the hall and say "hey, lighten up on those appraisals, we need to meet our numbers this month!" I can see the sign on the wall of the AMC telemarketing department: "The heck with our Wall Street numbers, our goal is accuracy!"
What? Oh, you're saying that is okay for lenders to own AMC's, as long as they have "controls" in place to make sure nothing funny happens. Well, I guess that is okay, if the controls are pretty strict. What kind of controls did you specify for them? None? They can determine their own?
Andy, I've gotta tell ya, I'm starting to get a little worried about this whole thing.
Oh, by the way, I've got a copy of an email that a good client (inadvertently) sent to me. It was a long thread in response to my request for my standard $100 fee for a final inspection. Someone at this LENDER didn't want to pay it, and specifically wrote:"I wonder if we can keep him off the (their partially owned AMC) list so he doesn't get any Conventional orders from us after May 1st? I'll check with my Boss to see if we can use it as leverage against him to do it for free." So I'm really glad that there is no more lender pressure occurring. What a relief!
So in closing, I would like to thank you, on behalf of many in the appraising profession, for everything you've done for us. With Obama now in office, from a tax perspective it's probably a good thing that I make substantially less money this year. Let me know what your next lawsuit/deal is going to be, so I know to stay out of that profession!
Mike LayAppraisal House Texas
Thank you, we'll be in touch!