Appraisers often use surrounding homes to assist in the process of establishing the value of homes but now will have to use the new standardized measures which mandate additional information from appraisers.
Fannie Mae and Freddie Mac are requiring appraisers to adopt the new system and are “assisting” appraisers who are not properly prepared for the new system with software downloads.
Don’t you just love how politicians provide a fix that has nothing to do with the problem? It does not matter if it is a car sale, or a home sale.
What drives a “tweaked” deal is self interest and getting the most out of the deal for all parties involved. How does this apply to appraisals?
Well, when policy makers allowed mortgage lenders to create Appraisal Management Companies (AMC’s) as wholly owned subsidiaries and affiliate companies, they let the foxes guard the chicken coup.
Same thing for commercial banks to create investment banking divisions during the TARP bailout. Let me illustrate this a bit more clearly.
Allowing banks to regulate their own deals, while removing moral hazards (bailouts) is like having the Mexican drug cartels secure the border.
Giving the cartel members stop signs in order to halt drug trafficking is like giving appraisers new software and policies in order to effect a problem with unrelated causality.
That problem being AMC’s and the conflict of interest in their ownership by lending institutions.
Know what I mean?…
Appraisal Source is a New York based residential real estate appraisal firm. Their highly-qualified appraisal staff provides independent residential real estate appraisals throughout Long Island and New York City.
Here’s the original article…Low Appraisals Slow Home Sales