In my continuing obsession with appraisal/lending issues given the bank shakeouts that will occur over the next 12-18 months, here’s an email conversation with IndyMac on an appraisal assignment occurred in late May with my appraisal firm Miller Samuel.

The report was ordered with a specific inspection date needed. Up until then, our turn time was consistently 7-10 days, usually inspecting the property within a day or 2 after the order depending on the contact info accuracy and customer cooperation. Granted, 7-10 days is not stellar, but we are very busy, ours clients know this in advance and our competitors (that I would consider competent) have the same turn times as well.

You can see one of our employees frustrations toward the end because we had gone through great effort to accommodate the bank to inspect the property on the day they needed it done and they did not indicate early on that there was any “rush” plus they basically told us we were not needed, after a warm and fuzzy relationship that preceded this conversation. Very odd.

I guess what annoyed me in seeing this email later on, was the comment about their 0 default rate and yet the lender collapsed 2 1/2 months later. I am sure this person was responding to their own branch’s experience but its weird they brought up such a reference in the dialog, inferring (to me, anyway) that it was a big problem looming at the bank).

Incidentally, 300 banks are projected to fail in the next 3 years.

May 28, 2008 email dialog

IndyMac Please provide status on this report – thanks

Miller Samuel [address omitted] will be inspected tomorrow, May 28th.

IndyMac And how soon thereafter can we expect the completed report? Thanks

Miller Samuel All appraisal turnaround time is currently 7-10 business days starting from the time of inspection.

IndyMac We are going to have to cancel this order- sorry but your turn around time is just too long.

Miller Samuel [name omitted] we have worked an entire schedule around this appt.
When do u need the hard copy and we will deliver it.

IndyMac We have appraisers that give us reports back within 2 days of the inspection. This is still not going to work. If you can get us the reports back in that time frame we will have a lot of business for you. I am sorry

Miller Samuel Yikes! That’s called bang it out, hit the number appraising. No that’s not something we participate in. That’s how subprime occurred and why the housing market continues to fall. Conditions for mortgage fraud remain in tact with many lenders because of a lack of concern for quality.
48 hr Speed = Bad appraisals and ultimately bad loans. We can do 5-7 business days. I really hope you guys don’t end up like countrywide and all the rest. But with 2 day turn time its inevitable.

IndyMac I understand your position and would never ask you to do something you are not comfortable doing. This branch does AAA business with typically low ltv’s, high credit, etc. Our default ratio is nearly 0 pct and we pride ourselves on efficiency and effectiveness. I think going forward we should help you gain access earlier in the transaction so you can adequately do your job. If there is something we can do on our end please let us know.

July 11, 2008

IndyMac collapses

July 17, 2008

FBI fraud inquiry after IndyMac collapse

IndyMac Collapse Fuels Fears About WaMu


4 Comments

  1. Soapbox | Appraisal Ethics, Ideas and Industry Issues July 18, 2008 at 10:51 am

    […] also posted on Matrix […]

  2. Edd C Gillespie July 18, 2008 at 11:39 am

    Good for whomever it was that held the line at your firm.

    I suggest that when an appraiser gets a cheaper-faster assignment there is all the reason needed to be truly concerned about ho you are taking on as a client. At this point the only thing appraiser can do to turn this crap around is to individually refuse to work for clients who have little or no respect for what you do or how your business must be run.

    Course, my solution subsumes character matters.

    On the other hand you could try what I suggested for your job applicants. Throw IndyMac in the river and see if it floats.

    Problem is, do the good guys float or is floating reserved to those who are full of sh–?

    Until somebody knows about this floating stuff for sure, let cheaper-faster be your guide to the character of your prospective clients.

  3. L'Emmerdeur July 18, 2008 at 2:06 pm

    “so you can adequately do your job” LOL

    See what happens when you take human stock that is barely adequate for farming duties and give them desks, pens and computers. Yup, Armageddon.

  4. Steve Simon July 20, 2008 at 9:55 am

    Anyone that is shocked by this ought to be in theropy!
    The US economy cannot withstand much more of this almost $5 a gallon gas crisis.
    The economy just isn’t built to absorb that kind of price for energy.
    The T. Boone Pickens site tells you the truth, “This is the largest shift of wealth in the history of mankind”…
    It is dreadful to thini that a handfull of gigantic companies steered us into this over the last thirty years or so, but that also seems to be a reality.
    Listen to people who have been screaming about conspiracy for years (Google Lindsey Williams), your hair will stand on end.
    Immediate and significant action must be taken or the downward spiral will rock our foundation..
    I have been a licensed real estate instructor in the State of Florida for over twenty years. I have taught over ten thousand students the required courses for real estate licensure. I have never seen it this bad, and I see no help on the horizon…

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