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[Greater Fool Theory v2] Getting Paid $55 For An Appraisal, Paying $4 For The Privilege

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The other day I came across a brand new form [1] for use on Wells Fargo mortgage appraisals

On February 13, 2010, the Wells Fargo RVS Desktop Appraisal (RVS Desktop) will be released into production. This is a streamlined desktop appraisal report to be completed by Licensed or Certified appraisers only. The Desktop Appraisal Form will be accessed through AppraisalPort using FNC’s Data Express system.

FNC [2] has long been an innovator in the collateral management business and I recently interviewed its controversial co-founder [3]. Their automation/statistical orientation doesn’t leave much room for human interpretation of property value. They provide a web portal to many national and regional lenders for a variety of mortgage related services including appraisals.

Some of the highlights of their new appraisal product [1] provided for Wells Fargo is designed for SFR, PUD, and Condominium assignments.

So a professional appraiser – a local market expert – has to crank out a thorough analysis on a property for a fee of $55, within 2 days and pay $4 to upload the report through AppraisalPort to Wells Fargo.

Technology sure is cool. Of course common sense clearly says that the least competent appraisers out there will sit at their desks and crank these reports out. No lessons have been learned from the credit crunch.

Needless to say, my firm won’t be performing these types of assignments and it is very clear that the “greater fool theory [4]” also applies to appraisers.