Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
It's about time some state governments have recognized that appraisers are improperly influenced by owners and lenders to bias their appraisal results. As an appraiser, I know that it happens to my peers, and it happens to me on a regular basis. Sometimes it’s just a closing statement after the order is made and paid for, like "I sure hope that we can get to X dollars." On other occasions, for example, the pressure applied by a developer who is about to lose a large earnest money deposit, his multi-million dollar project and a portion of the fee already paid can be enormous and include threats to “put you out of business.”
Appraisers are still looked upon by some as “bumps in the road” that must be dealt with on the way to mortgage nirvana. Like Rodney Dangerfield used to say, “you get no respect.” There seems to always be some broker, developer or consultant who knows where you have gone wrong, or what comparable sale you didn’t consider. Or they use the argument, “who are you when compared to them?” Them being the high-dollar feasibility study gurus who didn’t value anything, but said that a project of that type could be supported in the market at a much higher price.
The following paragraphs briefly discuss some of the new laws that have either been put in place or they are being considered for passage. Personally, I would like to see some federal legislation put in place that would protect appraisers from undue influence.
California approved a code change in October of 2007 that in part "prohibits any person with an interest in a real estate transaction involving an appraisal from improperly influencing an appraisal sought in connection with a mortgage loan." (See details of the code change at the following Internet link: http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_0201-0250/sb_223_bill_20071005_chaptered.pdf )
In Connecticut Raised Bill No. 5577 took effect in July of 2008. The Bill specifically prohibits mortgage brokers from influencing residential real estate appraisals, and a mortgage broker’s license can be suspended or revoked if they are found guilty of such actions.
Colorado and other states have proposed legislation regarding undue influence, and we expect to see more state law and possibly federal law change to address this issue.
Appraisers jointly recognized coercion as a problem when they expressed, through their representative, their opinions to the Senate Committee on Banking Subcommittee on Housing, Transportation and Community Development in June of 2007. Specifically they noted that “some parties boldly demand overlooking material issues or conditions to make . . (an) appraisal arrive at the desired number - or else.”
A Washington D.C. based organization called the “Undue Advocacy Coalition” has been started in an attempt to change the law. Their Internet site notes that “The law should ensure (an) appraisers’ independence from commissioned participants the mortgage transaction.” (See the Advocacy Coalition Internet site at: http://www.appraisaladvocacy.org/undueinfluence ) We agree with their undue influence goals and their other goals relating to AVMs, copyrights and false advertising.
For more appraisal information contact Glenn Rigdon, MA,MRICS, ASA a Las Vegas / Henderson Nevada appraiser via email or via his business website Horizon Village Appraisal (http://www.horizonvillageappraisal.com), or you can also click on “Contact Us” on the home page of this website.
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