FLORIDA - Regulate Appraisal Management Companies NOW

The Florida Real Estate Appraisal Board (FREAB) has been concerned for years about the influence of Appraisal Management Companies on Appraisers. In the interest of of protecting the public and ensuring pubic trust in the Real Estate Appraisal Profession, the FREAB has sought and supported legislation in 2003 and 2006 to assure the public the appraiser has the necessary knowledge and experience to perform the appraisal assignment competently. The efforts have avoided the regulation of companies and concentrated on enhancing the qualifications and abilities of individuals.

Because the world has changed, individuals within companies are gaming the system and influencing appraisers. Knowledge, experience, competency and quality are NOT a priority for these companies and individuals. Their priority is COST and Turnaround Time. There is plenty of evidence of potential and actual harm to the public. It's time to regulate Appraisal Management Companies. Remember, it was the unethical and illegal activity of an Appraisal Management Company that prompted the investigation and complaint by the Attorney General in New York.

Page 9, Paragraph 24. "Despite their claims of independence from their lender clients, First American and eAppraiseIT violate federal and state independence requirements with regard to appraisals performed for WaMu, and in doing so deceive borrowers and investors who rely on their proclaimed independence.

Page 11, Paragraph 29. "Almost immediately after WaMu retained eAppraiseIT to provide appraisals in early Summer 2006, WaMu’s loan production staff began complaining that the appraisal values provided by eAppraiseIT’s appraisers were too low. It was clear, and eAppraiseIT well understood, that WaMu’s dissatisfaction was largely due to the fact that eAppraiseIT’s staff and fee appraisers were not "hitting value,” that is, were appraising homes at a value too low to permit loans to close.

Page 13, Paragraph 37. "In February 2007, WaMu directed eAppraiseIT to stop using its usual panels of staff and fee appraisers to perform WaMu appraisals. Instead, WaMu’s loan origination staff demanded that eAppraiseIT use a Proven Panel of appraisers selected by the loan origination staff, who were chosen because they provided high values.

Appraiser Active has posted several times in the past year about the efforts to regulate Appraisal Management Companies.

January 26, 2009

February 25, 2009

April 13, 2009

May 15, 2009

May 19, 2009

October 8, 2009

November 4, 2009

January 17, 2010

February 2, 2010

Today, another story illustrating the danger to the public appears in the St. Petersburg Times. The poster child of Appraisal Management Company insanity makes another appearance.

Recent appraisal rules open door to shady middlemen

By Susan Taylor Martin, Times Senior Correspondent
In Print: Sunday, February 7, 2010

Last year, Global Appraisal Solutions of Clearwater hired appraiser John Viscusi to do property evaluations in the New York metro area.

But Viscusi says the company failed to pay him for 20 appraisals. And when he tried to contact the owner, Larry Holzer, he got no response.

Then Viscusi made an unsettling discovery. An Internet search for Global immediately linked him to another company, Appraisal Mediation Solutions. Its phone number: The same as Larry Holzer's. Its address: a UPS store in Clearwater close to Holzer's condo.

---

In 2007, Florida regulators permanently revoked Holzer's appraisal license because he had approved an error-filled appraisal done by a trainee under his supervision. The report didn't even have photos of the correct house.

The revocation barred Holzer himself from appraising property in Florida. But it didn't keep him from starting an appraisal management company, Global Appraisal Solutions, that could do business in Florida and every other state.

Read the whole thing.

Folks, there are bills in the Florida House and Senate to regulate Appraisal Management Companies that have been filed by Representative Matt Hudson and Senator Mike Fasano. Let these two know you support the effort and contact your State Senator or Representative and urge them to protect the public from unscrupulous individuals and companies.