Pressure on Appraisers by New Century.

[farbet]

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/06/AR2007050601402.html?hpid=topnews
Article in Todays Washington Post on the Mafia style pressures put on appraisers working for New Century.
Bring the “bats” on

[no_such_reality]

Of course, not working where fraud is being openingly committed apparently never crossed her mind.

[Critter]

Wow – I’ve worked in sales in offices that would ring a frickin’ bell every time you completed a sale, but never in an office where thugs would whack your desk with a bat when you were honest.

Jeez!

[Bugs]

Most of the subprimes have some variation of the same story – volume at the expense of everything else. Most of the Alt-A lenders are only slightly better.

An appraiser has an ethical obligation to avoid communicating a misleading appraisal or allowing other people to communicate a misleading appraisal. That obligation is hardwired to their license; it is not an option and it is not some abstract ideal.

[mixxalot]

These thugs are damn lucky that one of the appraisers did not take a gun and start shooting at these punks with the baseball bats.

[farbet]

Appraisers are like the wind, they sway in whatever directions will bribe them. They are just as responsible as the Subprimers for the market run up in fake prices.I know that they are exceptions but the majority are just HO’s(I said the H word).!!

[Critter]

I’m going to stick up for my favorite appraiser Bugs here – he always gives Piggingtonians the straight scoop. Unfortunately he has set the bar for everyone else and they come up lacking!

[farbet]

An appraiser either please and bring in the numbers or it is sayonara to future business.Come on they all do it. Maybe in matter of degrees.

[Bugs]

I truly wish I could prove you wrong, but it only takes a couple of idiots to spoil it for the rest of us; and right now the appraisal business has a lot more than a couple idiots.

If it’s any consolation, appraisers are regulated and those appraisers who have cooperated and enabled this fraud are subject to all kinds of civil, administrative and criminal penalties. Up to and including prison. Unlike with stock scams and the like – which require insider information that isn’t readily available – proving appraiser misconduct is relatively simple, if a little labor intensive. These folks can all be brought to account if the government or the investors have the interest to pursue them.

[farbet]

bugs, you may be “a play by the rules” appraiser. Show us articles, expose etc of the appraisers that have been caught and punished,or any investigation of Appraisers that is going on.Lets expose them here. Do they carry malpractice insurance? So that someone, who overpaid and is struggling, can recover from them and their insurance!!
It’s just that we read about the fraudsters and nothing is done. Nada

[Bugs]

The state regulatory agency (Office of Real Estate Appraisers) disciplines appraisers all the time. If you go and read the newsletters they post on their website you’ll see how many appraisers get reproved or fined or suspended or revoked. A lot more appraisers get suspended or revoked than realty agents, and I can guarantee you that appraisers are absolutely no worse than the agents and brokers in terms of conduct.

Nationwide, hardly a week goes by but that some appraiser gets sent to jail. Often times they are the only party involved with a fraudulent deal who gets serious discipline or jail, even though they never get anything more out of one of these fraudulent deals than their standard fee.

I woud say that most appraisers carry errors and omissions insurance, which of course is of no use if they’re committing or enabling fraud.

I’ll never stick up for a crooked appraiser, but I will say there is no such thing as a predatory appraiser; that is, one trolling the streets in search of a scam or a victim. Appraiser misconduct generally takes the form of enabling an unreasonable deal from which other people benefit; usually at the behest or coercion by a realty agent and or mortgage originator. If you’re at all concerned about bad appraisals the first step would be to hold those other professionals to their own standards of conduct as closely as we are held to ours’.

[sdrealtor]

There are definitely appraisers that wont bend the rules. I have been involved in several transactions the last few years where there werent comps for the property my clients were selling and/or buying. It wasnt a case of trying to inflate the value but rather finding properties that were comparable. Some appraisers said they couldnt justify the value with the available comps while others found ways to make the adjustments to come up with the value or at least get close.

[LookoutBelow]

I dont see how fraud can be committed by the "appraiser" in these situations ? Can somebody please explain ? 

After all, isnt a property worth EXACTLY what somebody is willing to pay for it ?….How else would anything "appreciate" in value ?

[Bugs]

Individual buyer and sellers make individual decisions, and those decisions aren’t always equally well informed or rational. Sometimes people get a good deal, sometimes they enter into a bad deal. Sometimes the true nature of the transaction isn’t being disclosed.

What we do is to seek out the predominant trend and rank the subject in that trend. In the case of a mortgage transaction, the value of the property acts as collateral for the loan, so a lender (theoretically) wants to avoid overencumbering a property by inadvertently loaning more than it’s worth. Hence their use of an appraisal to make that decision.

In truth a lender isn’t supposed to care what any individual buyer thinks a property is worth because individual buyers are not assumed to be adequately informed/motivated. However, we do assume that buyers as a group are adequately informed, which is why we seek evidence from multiple transactions that would demonstrate that dominant trend.

How a faulty appraisal enables a bad deal is usually the result of one or more lies told by an appraiser in the appraisal report. About 95% of “bad appraisals” can be objectively demonstrated to be bad by disproving factual errors or mistatements about the attributes of either the subject property, the properties used as comparables, or whether those properties really do rank among the “most recent, similar and proximate sales” as is certified in the appraisal report. It’s rare for an appraiser to use incorrect methodology in the analysis, and it would be just about impossible for an appraiser’s opinion to be unreasonable if they’re otherwise being honest about the facts in their assignment.

Columnists like Robert Bruss like to tell their readers that appraisers sometimes “miss” relevant sales data as a result of laziness or stupidity. He’s a very biased and poorly informed guy to be giving advice about appraisals.

The truth is that (around here, anyways) it takes a lot less time and effort to find the most similar sales and conclude to the reasonable value than it does to find sales that can be misrepresented and distorted into looking like the most similar sales for the purposes of getting the higher value. Easier to tell the truth than to tell the lie and get away with it.

[AK]

I’d like to think that I wouldn’t put up with that kind of treatment.

But IIRC the article did say that New Century paid well.

[Author]

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