2013 Year End Wrap Up
I love this time of year. Of course what is not to like about the holidays? But it is nice to take a look back over the past year and reflect on accomplishments while simultaneously keeping an eye towards the future. I suppose if you aren’t careful, that means you would have each eye going in a different direction.
I have been freakishly adept at predicting trends in the appraisal space to the degree that some might just say I am a witch. I have no special powers really. I just listen. I am at the nexus of lots of feedback from appraisers through Appraisal Buzz and surveys we perform, from lenders and AMCs through their affiliation with the Collateral Risk Network, and from policy makers inside the DC beltway where I spend a lot of time. It is a privilege that I cherish. And while not everyone may like my prognostications I beg of you please don’t shoot the messenger. Heck, sometimes I don’t like the trends I see.
There is one prediction that has thus far proven me wrong but I refuse to accept defeat. I hailed the Home Valuation Code of Conduct, HVCC, as a call to quality. It was more like a shallow voice than a full-throated scream but I think there is momentum. Based upon actions and conversations with regulators and policy makers on the topic of appraiser selection, there is renewed focus. The OCC issued a bulletin on Third Party Oversight on October 30 and just a week ago Fannie Mae issued Lender Letter LL-2013-10 about appraiser selection.
How does that translate into anything of value to the field appraiser? Well it means that if you have been competing on price and not quality, that strategy might not work for you going forward. Lenders and regulators are taking another close look at Customary & Reasonable. Remember while the Interim Final Rule may have muddied the waters a bit, Interagency Guidelines make it abundantly clear that fee cannot be the basis for selecting an appraiser. Quality comes before fast and cheap.
Some disturbing trends as of late have been the increased use of broadcast ordering systems that troll for the lowest bidder. There are some state regulators who have their eye on these AMCs and their abuses of C&R regulations. I think you will see some very public cases emerge next year. Before you fire off any hate mail please let me clarify. There is a big difference between auto assignment and a random broadcast system.
The other bothersome trend is AMCs ordering through other AMCs. If the goal is to evade registration in every state no doubt that will eventually catch up with the offenders. Any lender who allows this to occur is stepping on a banana peel. The other exposure is that AMC #1 cannot ensure that AMC #2 will compensate the appraiser based upon C&R. Risky business. And lastly this practice could be interpreted as a RESPA violation.
As a field appraiser how do you strategically take advantage of these emerging trends? First, you can only manage what is within your own domain. If appraiser selection is priority one, then ensure that you put the best possible foot forward. Create a peer group for at least a quarterly review of your work product. Personally I would choose other appraisers with far greater experience. How else can you learn? Join local coalitions. Join a professional association. Attend conferences. Take more than the minimum education.
It is a simple formula really—if you learn and network you will prosper.
Have any comments or would you like to submit content of your own? Email email@example.com.