We have all experienced the geographically ignorant real estate appraiser who comes to do our appraisal and has no idea about our town or neighborhood values. The $250,000 sales price appraises at $175,000 because the appraiser used "comps" that were not comps. These are appraisers who are doing $400 appraisals for $200. How does this happen when the borrower was charged $400.00 for the appraisal?
The appraisal management company, many who are owned by the lenders, charges the borrower the $400 for the appraisal. They pay the "appraiser" $200 and pocket the rest. There are cases where the lender keeps $100, the appraisal management company keeps $100 and the wanabe appraiser pockets the $200.
April 1 (how appropriate a day for this to go into effect) brings us the long awaited appraisal reform bill that was part of the Dodd-Frank (talk about mental midgets) took effect. This was supposed to pay appraisers "customary and reasonable" fees. It would be the $400 in the previous example. This way the pool of qualified appraisers would be increased. The public would not be subjected to appraisers who prostitute themselves. Sounds like the government might have got it right this time. Not so quick Sparky because the law has been perverted. How?
The objective third party information surveyed includes government agency (VA, FHA, etc) fee schedules, independent private sector fees, etc. Guess who is included in the survey? You got it - the appraisal management compnay. The fox guarding the hen house. Wonderful. The HUD statement shows a $400 "appraisal fee" but that doesn't count. It is what the appraiser is paid. What a bunch of governmental crap.
Where is NAR on these obvious issues that have a negative impact on our incomes? Why are they not using "our" lobbyists to push congress to get it right? We the largest "union" (I know we are not a union but it feels like one) in the United States. NAR should be pushing their considerable weight around. We could be the 800 pound gorilla if NAR played it right.
Where are you NAR?