Appraise This

NEW:  The HVCC: Home Valuation Code of Conduct is set to take effect May 1, 2009.  The Code is the product of agreements between Freddie Mac, the Federal Housing Finance Agency and the New York State Attorney General.  The purpose: to enhance the independence of appraisers...

http://www.ofheo.gov/media/news%20releases/HVCCFinalCODE122308.pdf

Well, I hope that this meets that goal.  As I see it the way they are trying to "enhance independence" is by putting a middleman between the End User of the appraisal and the Appraiser.  This way the Lender or other End User cannot put undue pressure on the appraiser to "meet a value".

HOT:  The intent is good.

But I have to say here, shouldn't we be above this kind of pressure anyway?  I seem to remember seeing it somewhere:  "It is unethical for an appraiser to accept an assignment, or to have a compensation arrangement for an assignment, that is contingent on ... the reporting of a predetermined result or the amount of a value opinion."

Oh yeah, it was in USPAP!!!!  The Uniform Standards of Professional Appraisal Practice!!!!  The ETHICS RULE!!!!!!!!!!! 

Lets face it, there are unethical people in all walks of life.  And more,perhaps, in those industries which are booming since where money is flowing, there is always an easy buck or two to be made from dishonest practices.  That describes the Real Estate Industry in the early half of this decade.  It was booming, so there was money to be made; more money if you were willing to cut some corners, wink wink, nudge nudge...

But I don't think you can legislate the dishonest people out.  It may make things more difficult, but they will still be there, lurking in the corners, waiting for the easy buck.

NOT:  As if I didn't have enough BAD to say under the HOT heading...

The imposed "middlemen" are called AMC's: Appraisal Management Companies.  The End User orders the appraisal through the AMC.  The AMC contracts the work to a licensed and qualified (hopefully) Appraiser.  The Appraiser does the work and delivers the report to the AMC.  The AMC sends the report to the End User.

The End User pays a NORMAL FEE.  The AMC takes up to HALF!!!  And the Appraiser, who has the qualifications, the license, the experience, the knowhow, is now working half price.

So, what do you think?  Will everybody just knuckle under and work twice as hard to make the same salary?  Or do you think, just maybe, this will actually make even the really ethical, really qualified, actually GOOD Appraisers start to cut a few corners? 

I have an Appraisal Product here that is reliable and accurate for $350.

I also have a nice little report that is pretty darn good for $175...

Next time:  Who is running these AMC's?  And why don't I start my own?!!!