Jonathan Miller is a frequent speaker and guest at housing-industry conferences, but lately his presence has caused some troubling reactions.
As Miller tells it, property brokers he runs into accuse him of one of the most heinous acts imaginable….
…Miller is an appraiser, president of the well-known New York-based Miller Samuel Real Estate Appraisers….
…Miller says most appraisals are valid….
…Put another way, bidding wars have erupted in sought-after neighborhoods with tight inventory, including some in Miller’s own backyard in Manhattan and Brooklyn.
In such fast moving markets, valuations can change “within a couple of weeks,” Miller says….
…But often it’s lacking, and that is the other main reason appraisals may come in low, Miller says….
…Miller and other experts trace the changes back to May of 2009….
…As noble the attempt was to right the wrongs, it backfired, Miller says….
…Meanwhile, the HVCC’s goal of assuring appraisers’ independence unintentionally “opened a Pandora’s box” by prompting the rise of appraisal management companies, Miller says….
…”Think of them as very large, quite often national entities that are a clearinghouse for appraisers,” Miller said, adding that appraisers working for them on fees often agree to quick turnaround times.
“The practice falls short because it encourages a lot of cutting of corners,” Miller said….
…Miller says AMCs account for about 90% of appraisals done on mortgages from big banks such as JPMorgan Chase (JPM) and Citigroup (C)….