Here is the letter Michelle Patrick sent to her State Representative:
At the current time with all the market issues we are facing in the housing
industry I am writting you with regard to several issues that are being
discussed for changes in our laws. The first being the following issue coming up
for a vote in the near future (Jan 2008), I would ask that you vote against this
change and work with our other state representatives to protect the Florida
Certified appraisers right to work.
Ref: bill - H.R.3837
proposed change is as follows;SEC. 203. AMENDMENTS
RELATING TO APPRAISAL SUBCOMMITTEE OF FIEC,APPRAISER INDEPENDENCE, AND APPROVED
APPRAISER EDUCATION.
(k) Consideration of Professional Appraisal Designations- Section 1122(d) of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (**12
U.S.C. 3351(d)) is amended by adding at the end the following new sentence: `No
provision of this subsection shall be construed as prohibiting consideration of
designations conferred by recognized national professional appraisal
organizations, such as sponsoring organizations of The Appraisal
Foundation.'.
This in fact will undermine the sole purpose of the Certified appraiser as an
independant party as it will allow the financial institues to work with a
"private income producing company" to virtually blacklist appraisers who meet
all state and federal guidelines but do not wish to join these private
organizations at an annual fee or pay their absorbant fees for coursework. It
would be against all our country stands for to allow one organization to dictate
the appraising of residential and commercial properties throughout our country,
which is in fact the long term goal being worked in a little at a time. There
are numerous qualified professionals in Florida and the US who feel that
allowing for this change would undermine the individuality of opinion of values,
appraisal firms and would highten the possibility of repeating the prior SL
crisis but to a greater extent.
I would also like to pose to you a follow up with regard to paying appraisal
firms, in Oregon their state passed a law that requires payment to appraisal
firm within 15 business days of invoice wether the loan has closed or not for
services rendered (this is already clearly stated in USPAP). If a bank, broker
or other entity involved in the hiring of an appraiser/appraisal office does not
remit payment the appraiser fills out a form with the state and the state
suspends the right of the said "client" to lend, originate loans in Oregon.
Appraisers in this country are legally responsible to their clients, their
profession and the federal banking laws yet we run the highest in businesses
with outstanding unpaid billables and bad (bounced) checks as we have little to
no recourse againt consistant abuse by the parties originating the transaction.
I have had clients state that their loan didnt close to Visa and Visa charge
back the appraisal fee in addition to the fee to process and the fee to return
the credit against our account for services rendered and redacted copy of
appraisal provided to Visa as proof of work completed. So to do my job correctly
I lost 150.00 in fees, no other business is in our particular situation at this
time.
Another issue I would love for you to look into on our behalf is the
appraisal management company issue. By law the lenders are required to disclose
fees on the HUD statement at closing, the lenders own "appraisal management
companies" as a loop hole in the original lending laws requiring seperation of
lender/appraiser to best provide an independent appraisal product.
Lenders/Brokers state on the HUD that the borrower is being charged anywhere
from 350-450.00 for a standard sfr appraisal but that fee is paid to their own
appraisal management company which in turn is paying the licensed professional
appraiser approximately 1/3 of the stated fee on the HUD. Lenders have also used
the changed "scope of work" to dictate to appraisers what the appraiser will and
will not do and report however if USPAP requires more work the lender refuses to
pay stating that they arent requiring that "scope of work". Scope of work was
sold to appraisers as a way of us being allowed to disclosed through USPAP our
required scope of work and any variables and determine our fees. The lenders
have done a bait and switch on the whole "scope of work" law and are continuing
to do so. If you decline the assignment you are then blacklisted from receiving
any future work from that particular client or lender.
This seems at best to be a conflict of interest with regard to the
relationship between the lender/AMC and at worse to be a deceptive practice as
the borrowers are assuming based on the HUD that the appraisal professional is
being paid the 350-450 appraisal fee which is not true. Most major banks have
now resorted to ordering appraisals only through their bank owned AMC's which
eliminates the whole system of "free enterprise for the appraisal firms, full
disclosure with regard to loan fees and seperation of the lending institutions
from the appraiser with regard to valuation of properties being considered for
collateral on the loan.
We have appraisers in Florida with over 20 years business and appraisal
experience defaulting on their personal obligations due to these issues as a
whole our business's are failing not out of our own doing but out of the
lenders/brokers and organizations having more money to push for law changes that
would not be in the best interest of the country or the appraisal industry in
the long run. More and more appraisers are starting to think the banking
industry is trying to set our profession up as a fall guy for the current market
situation as a reason to elimate the "appraisers" all together from the
requirements for loan origination and underwritting.
This is of deep concern to many in Florida as we have I believe over 50,000
appraisers in our state and few states allowing reciprocation for Florida
appraisers. I ask you as our representative to please review these current
issues, look into the future of the Florida markets with regard to banking and
support your state appraisers in providing an honest valuation of properties
without client interference, requirements to join a private for profit
organization for fear of loss of income. As we like all other professionals need
protection from the "larger fish" and the ability to provide for our families in
the future based on a profession that we have been well trained to do and
genuinely love of our work.
Sincerely
Michelle Patrick
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