Talk about Pressure to Perform!

Posted by: Jonathan Simpson | May 20, 2008 at 02:27 PM

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I have recently sent this letter to my 2 Senators.

RE S.2452 This is an onerous cost to appraisers and doesn’t solve anything. This is an attempt by lenders to shift higher costs to appraisers and reimburse the lender for their own dishonest practices.

As an appraiser, I have been making the case with statistics that the market began to deflate since August 15, 2005. I have added this information to my reports and all I got for my in-depth analysis was “Customer Service Investigations” (CSI), “Grinder Reviews”, “Pre-Benching” and demotion on the assignment rotation que” (List) by some of the largest lenders in America. My personal experience is typical of the few appraisers in this area who are competent, experienced and honest.

In order to get nominated to the “List” in the first place, you have to be deemed malleable enough to be a “Good Appraiser” or “on the same Team” or “Team Player” by a manager of Loan Production. During the process of becoming a “Good Appraiser” you must make several sows ear property reports seem like silk purse reports. After becoming a “Good Appraiser” or ……..” you are then put onto the “Approved” Appraiser List. The list is often “Maintained” by a separate entity called an “Appraisal Management Company” (AMC). Generally the AMC is either controlled by significant volume or is a wholly owned subsidiary of the Lender. Their ostensible function is to maintain good appraisal practices and promote conformity with the “Uniform Standards of Professional Appraisal Practices” (USPAP). In actual practice this is a sham because The Vice Presidents of Loan Production is in charge and tells the AMC staff to promote those appraisers on the List who are still malleable enough to make his bonus bigger and better than the preceding years’.

If an appraisal doesn’t hit the numbers and Loan Production Staff can’t “earn” a fee they begin a systematic process of character assassination and slander against the appraiser. The tempo, stridency and level of involvement increases until they force “Customer Service Investigations” (CSIs). The Loan Production Staff considers itself to be the “Customer” of the AMC. I reiterate for emphasis; The “CSIs” are initiated when the Customer doesn’t get the numbers they need to make a loan and “earn” a commission. Once I was CSI’ed because I took a picture of the posted “Condemned By the Health Department sign” and included it in the report. In another instance I was called a racist and was discriminating against Latinos. This is laughable because I served 2 years in the Peace Corps in Latin America and speak Spanish, too. In another instance I was CSI’ed because I refused to classify a vacant vermin infested structure as a vacation (second) home. (The owner had moved into a camping trailer next door.) It was at this time that my assignments began to diminish and soon culminated in complete stoppage after I refused to consider comparables in another newer neighborhood as comparable to the older property being appraised. To be honest I don’t miss their business, but these are typical examples of how the Loan Production Staff/AMC’s interact.

Next, as the process continues a “Grinder Review” is ordered by the AMC at the behest of the Customer. A “Grinder Review” is an in-depth appraisal review process that concentrates on finding insignificant deviations from the Customer’s specifications, and which are almost always ignored when the appraisal report hits the numbers. As the process continues the “Grinder Reviews” are used by the Appraisal Management Company to document and justify the future action known as “Pre-Benching”. “Pre-Benching” is the process of assigning appraisal requests which are more and more difficult to appraise and making them more and more distant. As the appraiser begins to either falter or reject assignments because of difficulty, distance, or legality the appraiser is assigned a lower number on a scale of 1- 5. which lowers his standing in the assignment rotation que. “Benching”, as defined, is not removal from the list, it is just demotion downward in the assignment rotation que, until there are no assignments of any consequence. The process is used to punish the offending appraiser who can’t give them the numbers they need to make the loan and “earn” a commission.

As the process proceeds the offending appraiser is financially weakened until the appraiser is either forced to re-comply with the “conditions” or leave the business.

Under no circumstances should an appraiser ever ever try to assert independence because missed numbers, complaints about undue influence or refusal either due to legality, quality, distance or difficulty of the assignment will always initiate the CSIs, Grinder Reviews and the Pre-Benching process, again.



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