THE DAILY RAMBLE - DSNews.com: Trade Group Challenges Critics’ Claims of “Out-of-Town” Appraisers
Earlier this week I came across DSNews.com. What a fantastic resource. I have included a link to the right –>. If you are interested in the goings on in the distressed real estate market (and who isn’t, even if it is just a perverse voyeuristic interest), it is definitely worth checking out.
I have commented many times about the low opinion I have of the Home Valuation Code of Conduct (HVCC), and the damage it has done to the real estate market. While a positive step philosophically, the implementation leaves a LOT to be desired.
According to the article that follows, a trade group is fighting back by claiming that the overwhelming majority of appraisers come from a radius of 13 miles. Sounds fair, doesn’t it? Perhaps in North Dakota, but not in New York. Take a look at the following map to see how far 13 miles is from my property;
Ummm…NEW JERSEY??!!
No offense to my friends in Jersey, but you do not know our market! This also understates reality. Over the summer I had an appraiser call me for a job from my building who was driving from Staten Island, which is well out of the radius above. I actually felt bad for the guy; having done appraisals on Staten Island, I know how much the tolls cost just to drive round trip. There was no way he was going to be a happy guy working in Yonkers.
Needless to say he did not get into the property. The lender eventually sent an appraiser with a lot of experience locally and it was fine. All you can ask for is a local experienced appraiser who will value the property fairly. I do not think that is too much to ask! So sit back, relax, and read the spin from this trade organization. Its a load of BULL.
Thanks to DSNews.com!
November 12, 2009
Appraisers have been pushed into the spotlight lately, particularly with the ongoing debate surrounding the GSEs’ Home Valuation Code of Conduct (HVCC) implemented last May.
Realtors and mortgage brokers have voiced the most opposition to the HVCCrule, with one of their primary criticisms being that appraisal management companies (AMCs) assign properties to appraisers regardless of their geographic competency, resulting in low-quality and low-ball appraisals that impede home sales.
But the Title Appraisal Vendor Management Association (TAVMA) says that’s just not true and has produced the numbers to prove it. According to a new survey conducted by TAVMA, the typical driving distance traveled by independent appraisers, retained by the nation’s largest AMCs, averaged 13 miles this year.
The Pennsylvania-based nonprofit professional organization, which represents companies that disseminate appraisal assignments for lenders in compliance with the HVCC rule, says it speaks for more than 75 companies with a combined market share of 85 percent of the AMC market.
“We polled our AMCmembers in light of unsubstantiated statements that AMCs send out-of-market appraisers great distances to value properties,” said Jeff Schurman, executive director of TAVMA. “Based on what our members are reporting to us that’s simply not the case.
Schurman said his organization plans to provide a regular quarterly report on independent appraisers driving distances, and added that AMCs typically use one of three methods for controlling how far appraisers travel: Geo-coding; zip code to zip code mapping; and/or order form instructions not to exceed defined distance parameters.
According to Steve Haslam, CEO of StreetLinks National Appraisal Services, AMCs use specific selection criteria to find the most appropriate appraiser for an assignment, including how often and how recently an appraiser has serviced a particular area.
Haslam said “Appraisers sometimes travel outside of their own neighborhood –– but that doesn’t mean outside of their sphere of professional expertise. In many markets, our selection criteria divide heavily populated counties into smaller zones that we don’t let appraisers cross.”
Haslam also noted that as licensed and certified appraisers, those working with AMCs are required under industry standards, known as USPAP, to refuse assignments where they are unfamiliar with the markets.”
According to TAVMA, AMCs currently provide approximately 60 percent of all the mortgage industry’s residential appraisals. Although some AMCs employ in-house appraisers, most assign orders to local independent appraisers, the organization said.
“The economics of the industry give neither the AMCs nor the appraiser an incentive to go great distances to conduct an appraisal,” Schurman said.
