Here’s my interview yesterday afternoon with Liz Claman & David Asman on the Fox Business Network that covers the agreement between Fannie Mae and New York State Attorney General Cuomo’s office covering appraisal pressure.
I enjoyed the experience and the anchors were fun to speak with before we went live.
It is an important moment in the appraisal profession and, as I have said before, “devil is in the details.” I have serious concerns about the enabling of appraisal management companies as a result of this agreement which should be brought up by appraisers and appraisal associations during the commenting period.
One of the things that appraisers have to be wary about is to be labelled as a scapegoat for this situation. I made that clear in the interview this is not the case. Cuomo recognized this and is attempting to create an environment where appraisers are not pressured. Before the housing boom, it is my opinion that 80% + of appraisers were competent, not unlike most professional services. However, the ability to control the appraisal order flow by individuals who would benefit financially and have no personal risk as a result, gave significant volume to appraisers who “played ball” and enabled more of the same kind to enter the profession because it was so lucrative.
The majority of the competent appraisers were driven out of business or moved on to other appraisal work. As a result, the break down is the reverse and I suspect that 80% of appraisers that do primarily mortgage work are not competent because they were empowered by a form filling, play ball lending culture.
In these uncertain times for residential housing, it will be more difficult for consumers and the lending industry to find competent appraisers to provide neutral opinions of value.
On a lighter note, I loved my security pass for Fox. They report, you decide. 😉