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>Many appraisers that work for banks have the uncanny ability to appraise just high enough to get the loan (within reason, of course). Yes however Appraisers c

>Many appraisers that work for banks have the uncanny ability to appraise just high enough to get the loan (within reason, of course). Yes however Appraisers cannot work for the bank. They can be part of a separate company "owned" by the corporation, but they cannot work directly under the lending institution. Hence why 2008's crash happened. Also with a purchase, appraisers basically know loans need to come in at a minimum of 80% Loan to Value (LTV) ratio so they just take the purchase price and divide it by 80% to get the value needed so the loan can be funded and to speed things up. Although it doesn't matter to appraisers because they get paid either way. A lot of appraisals today are ordered through a third party that contracts out the appraisal bidding for banks because it absolves the financial from having a bias. >There is a lot of wiggle room for appraisals. Not once it's said and done. The appraisers cannot just change things in the appraisal cause the borrower complained. The borrowers can come back with comps or disprove inaccurate information such as incorrect sq footage and the appraiser can readjust it if they deem it necessary. They're on the line when an audit comes around and they're risking their license each time they do it, that's why they rarely ever change it unless the borrower is definitely right (which they rarely are, but it happens). > And if an appraiser is very motivated and willing to put in some extra time and effort looking for comps and finding reasons to increase, decrease based on other details, they can affect the appraisal greatly. They most definitely are not. They have no incentive to work harder on one appraisal over another aside from retaining repeat business if it's not ordered through the third party appraisal company. Financials try not to go with the same appraiser for all appraisals because then it looks as though we are the sole employer of an appraiser and therefore can become a serious audit issue. Auditors will look at everything, even some stupid doc that wasn't supposed to be in a file and write up the institution for it. >I wouldn't expect that the make huge differences, but i can imagine it having an aggregate effect of statistical significance. You are overinflating their power by a lot. Appraisers have far less influence on the loan process than the lenders do. The simple fact that there are for profit lending institutions that can charge single digit percentage fees on 6 figure loans or allow for 0-3% down just shows were heading for 2008 again. Except the only difference is investors know when they're buying risking mortgage securities as opposed to not knowing if all of them are good or bad.

jjeaff 5y ago
Just how long do you think an appraiser will last if they consistently aren't appraising high enough? Banks decide which appraisers they want to work with. Usually, it's someone from the bank that doesn't work in "loan production", which is better than nothing, but still laughable. They all work for the same company, they all know each other. And if they are using a neutral 3rd party to select appraisers, just who is selecting this neutral 3rd party? The bank of course. I suppose you also think that "3rd party" arbitrators selected and paid for by one of the parties to the issue being arbitrated is also unbiased? As for racial bias, unconscious bias needs no incentive one way or another.
- MeinBlutIstBlau 5y ago
  >Just how long do you think an appraiser will last if they consistently aren't appraising high enough? Well seeing as the banks don't get to always choose...long enough to remain solvent. You are coming at this with a conspiracy misconception and that is not how the industry works at all. There is not guiding hand incentivizing "only good appraisals." It's 100% autonomous. Do appraisers know how to game the system? Absolutely. Do they? Well if their comps are in the $100k range and the borrower thinks the house is $150k, an appraiser is not gonna risk their license because some schmuck thinks they're entitled to another $50k in equity. It. Doesn't. Happen. >They all work for the same company, they all know each other. No they don't. Most appraisers are independent contractors or work for a specific appraisal company. Of which there are a lot. Competition is extraordinarily healthy in the industry. In commercial, we had like seven we'd use for quotes consistently. >And if they are using a neutral 3rd party to select appraisers, just who is selecting this neutral 3rd party? The bank of course. Part of post 2008 rules say the bank can't pick them for residential mortgages. That is why it goes through an independent company as I stated before so the bank can wash their hands of bias. But the "bank" does not choose. The processors submit an appraisal request. That's it. No deciding who and the lenders don't say who they want. If anything, the lenders just want someone to do it quick. >I suppose you also think that "3rd party" arbitrators selected and paid for by one of the parties to the issue being arbitrated is also unbiased? I'd say it's more unbiased than what existed previously. >As for racial bias, unconscious bias needs no incentive one way or another. You need a cultural shift to fix that which is beyond the banks expertise. I'm kind of getting annoyed how ignorant you are of the situation yet still actively looing for a way to dispute this. This is the system and the biases that you are fabricating just aren't there. If they are, they're so minimal; few and far between, that you're assuming the banks are run by some Bilderberg group trying to ensure some fraction of racial bias in one industry that fucks over thousands of people everyday who can't say they got screwed because of a racial bias.

jjeaff 5y ago

Just how long do you think an appraiser will last if they consistently aren't appraising high enough? Banks decide which appraisers they want to work with. Usually, it's someone from the bank that doesn't work in "loan production", which is better than nothing, but still laughable. They all work for the same company, they all know each other. And if they are using a neutral 3rd party to select appraisers, just who is selecting this neutral 3rd party? The bank of course. I suppose you also think that "3rd party" arbitrators selected and paid for by one of the parties to the issue being arbitrated is also unbiased? As for racial bias, unconscious bias needs no incentive one way or another.

MeinBlutIstBlau 5y ago
>Just how long do you think an appraiser will last if they consistently aren't appraising high enough? Well seeing as the banks don't get to always choose...long enough to remain solvent. You are coming at this with a conspiracy misconception and that is not how the industry works at all. There is not guiding hand incentivizing "only good appraisals." It's 100% autonomous. Do appraisers know how to game the system? Absolutely. Do they? Well if their comps are in the $100k range and the borrower thinks the house is $150k, an appraiser is not gonna risk their license because some schmuck thinks they're entitled to another $50k in equity. It. Doesn't. Happen. >They all work for the same company, they all know each other. No they don't. Most appraisers are independent contractors or work for a specific appraisal company. Of which there are a lot. Competition is extraordinarily healthy in the industry. In commercial, we had like seven we'd use for quotes consistently. >And if they are using a neutral 3rd party to select appraisers, just who is selecting this neutral 3rd party? The bank of course. Part of post 2008 rules say the bank can't pick them for residential mortgages. That is why it goes through an independent company as I stated before so the bank can wash their hands of bias. But the "bank" does not choose. The processors submit an appraisal request. That's it. No deciding who and the lenders don't say who they want. If anything, the lenders just want someone to do it quick. >I suppose you also think that "3rd party" arbitrators selected and paid for by one of the parties to the issue being arbitrated is also unbiased? I'd say it's more unbiased than what existed previously. >As for racial bias, unconscious bias needs no incentive one way or another. You need a cultural shift to fix that which is beyond the banks expertise. I'm kind of getting annoyed how ignorant you are of the situation yet still actively looing for a way to dispute this. This is the system and the biases that you are fabricating just aren't there. If they are, they're so minimal; few and far between, that you're assuming the banks are run by some Bilderberg group trying to ensure some fraction of racial bias in one industry that fucks over thousands of people everyday who can't say they got screwed because of a racial bias.