Appraisers' Free Forum

I don't see a fight here or even see what is wrong with the original letter?
The letter asks BPO providers to advocate for the value of their product (value to the end-users). What's wrong with that?

I don't see it implied that the BPO is better than or should be substituted for an appraisal.

If we are going to advocate the quality of our product, it should be done to our clients, end-users, the public, and regulators.

Denis DeSaix wrote:If we are going to advocate the quality of our product, it should be done to our clients, end-users, the public, and regulators.

I agree, in fact currently the end users and the regulators are the ones that really count, especially the regulators.

Another thing on the BPO issue, some people at the other place have a cow every day about BPOs replacing appraisals, I don't worry about them on the origination side, but they are a hindrance on the pre-foreclosure, REO loan managment and REO side. A tribe of Luddites over there go insane at the mention of performing any type of exterior appraisal.

I've been out all morning...sorry I haven't responded sooner.

Corporate Lackey-

A friend--who knows my stance on BPO's being used for lending purposes--forwarded this to me. I'm forwarding it to others. After all...Fiserv sent out the invitation themselves.

Please feel free to forward this e-mail to all of your associates that may have an interest in joining this call to action.

Edd-

Steve had me pegged correctly.

I don't feel BPO's should be used for lending purposes. I've seen first hand how BPO's are cranked out by agents with little to absolutely no knowledge of market value. Based on what I've seen...these are 'MacValuers.' There is a time & place for BPO's, but again, I don't feel they should be used for lending purposes.

Appraisers are valuation experts...not agents.

Moreover, the time alloted for these BPO's is absolutely insufficient. Tell me how someone can do massive amounts of BPO's on a regular basis (including driving-by, or inspecting subjects) and do an adequate job. Again, from what I've seen, heard & read...'BPOers' are performing 5-10 of these for every appraisal completed by a knowledgeable, educated, qualified appraiser.

I don't want to embark on a Crusade, but we're just coming off a 2nd MASSIVE lender bailout in 20 years. We can't afford another one.

The 'BPOers' (including AMC's) are banding together for the betterment of their industry. Appraisers should do the same. Fight together...or die alone.

Somebody should paste it on the other forum...this is probably one issue MOST of us can agree on.

Senior Jefe wrote:A tribe of Luddites over there go insane at the mention of performing any type of exterior appraisal.

That came in as I was getting ready to submit this, and I must say...I belong to that tribe.

I've been at this business in one form or another for 19 years now (about to enter my 20th year), and so much can be missed (including out-and-out fraud) by just "driving-by" a subject.

I can appreciate the desire to "get it faster-cheaper," however, average Joe(sie) taxpayer is past tired of bailing out lending institutions @ the tune of billions followed by trillions.

Appraisers WERE SUPPOSE TO BE the brakes applied to an out-of-control-industry (lending), but their warnings & petitions were totally ignored, and so we find ourselves in the midst of a mini-depression as a result.

Some common sense needs to be restored to the valuation business & pounding out 10-15 drive-by BPO's a day is certainly not the answer.

Mako what do you suggest I do in the following situation. Real VP of a real bank calls and says “You did an appraisal for us on 101 Elm Street in July of 2005, we would like to assign you an exterior assignment for the property.” The order is for pre-foreclosure, REO, loan management whatever you want to call it. Should I refuse the assignment? Insist on an interior assignment? Insult him and make a speech about BPOs? The lenders who own the paper will order these assignments and will allow the necessary EAs. Don’t confuse exterior assignments with the AMC driven mortgage broker specials, those will no longer exist very soon if they haven’t already. BTW, I’ve done 7 exterior pre-foreclosures on the same property, they have never foreclosed, they just want to know what they’re dealing with, I assume they’re renegotiating it yearly. It's one of the perks with dealing with companies that keep their paper.

Senior Jefe wrote:Mako what do you suggest I do in the following situation. Real VP of a real bank calls and says “You did an appraisal for us on 101 Elm Street in July of 2005, we would like to assign you an exterior assignment for the property.” The order is for pre-foreclosure, REO, loan management whatever you want to call it. Should I refuse the assignment? Insist on an interior assignment? Insult him and make a speech about BPOs? The lenders who own the paper will order these assignments and will allow the necessary EAs. Don’t confuse exterior assignments with the AMC driven mortgage broker specials, those will no longer exist very soon if they haven’t already. BTW, I’ve done 7 exterior pre-foreclosures on the same property, they have never foreclosed, they just want to know what they’re dealing with, I assume they’re renegotiating it yearly. It's one of the perks with dealing with companies that keep their paper.

I've performed a lot of REO appraisals over the years, and it's my experience these properties are typically in extremely poor condition. I don't know if the homeowners are depressed about their financial situation, or if slovenly people tend to lose their homes more often (I suspect it's the former).

Deferred maintenance can damage a home a great deal in four years. I don't think you can tell what the interior condition of a home is by sitting in your car. However, the way the rules are currently...drive-by's are permissable...so you're stuck between a rock & a hard place.

It's ultimately your call, and that's why I decided not to do them any longer. I did about 7 drive-bys back in the late '90's & didn't feel comfortable doing them any longer...so I quit offering the service (smart choice ).

You ask what I recommend; get involved with appraiser advocacy groups. Try to do something on the state or federal level about valuation laws, rules & regs.

Write a letter to the Realtors (as Fiserv has invited everyone to do), write your Senators & Congressmen(women). Pasting Fiserv's email over on the other forum would be beneficial too!

I had another thought on this subject as I was logging out;

After the S&L Bailout...appraisal licensing was required. As time went by some lenders & agents felt comfortable pressuring appraisers to hit predetermined values (regulation enforcement was nowhere to be seen).

All that resulted in the need for another much BIGGER bailout.

This time around, however, there isn't much of an urgency to bring some common sense back into the valuation business. In fact many feel BPO's SHOULD BE permissable in some instances. Never mind who's doing them...how little valuation education they may have, or what their experience level is. Noooo...it's how many can you do & how fast. That's it...no concern for quality.

I've said this on the other forum years ago, but if this trend is allowed to continue, and you look down the tunnel into the future...valuations will be performed in Mumbai w/the aid of Google Earth. That's the next-best-cheapest thing to sitting across the street guessing what the interior of a home looks like, and big business just loves the next-best-cheapest thing.