In todays marketplace, I am left wondering exactly what the highest and best use of a residential real estate appraisal really is. It would seem that I have finally reached a point in my life where I have lost my Mojo for the profession.
Intellectually I can say that the use of the real estate appraisal is as valuable today as it was back when lenders were actually lending their own money and really cared about receiving an honest opinion of value.
At that loans were sought, but only in situations of need because someone needed to buy a home or a building for a very specific reason. Entire generations of people were content to stay out of debt and save for their dream home. In a large percentage of cases, lives would be spent saving money only to have to roll to the next generation. People who were finally able to buy their homes took pride in the actual unencumbered ownership.
If an appraisal was required for tax, insurance, mortgage, estate or “God forbid” divorce purposes there was not a tendency to pressure the outcome because people genuinely wanted to know the value of the home.
In contrast today, people do not save for anything. If they do not have cash they find a way to afford the payments for what they want from clothes, to toasters, to cars, to houses. We live in an instant and disposable society and if an honest appraisal is conducted that does not meet the whim of the consumer then, the appraiser is labeled as “bad” or barraged with reconsiderations until such time as they cave in or flip off the client. Of course when the loan goes bad, the lender is not judged, the borrower is not prosecuted. The appraiser is labeled as “bad” and if they are lucky they only lose future work. If the make too many deals, the FBI gets involved.
Am I suggesting that America has made its own brand of criminal “the appraiser” and the prosecuting them for following the pressure that was imposed upon them? Actually, yes that is exactly what I am suggesting.
For the record, I have fired more clients than I can remember and because of my sense of honor and ethics my wife and children have been deprived some of the finer things in life so that I could hold my head up without shame when I look myself in the mirror each morning.
But as I pour over file after file after file, I can not help but ask myself what exactly did all of my folderol accomplish in fighting the good fight and standing firm for my sense of right and wrong?
Lenders simply found other appraisers to make the deals. When I changed my practice to fraud investigations, all I really did was find myself surrounded by literally tens of thousands of appraisal reports that presented appraisal opinions that were gladly accepted by the lenders until things got challenged and then the “bad” appraiser caused the bank to fail.
I would like to think that this just burn out talking, but it seems to me that for the purpose of mortgage lending the highest and best use of the appraisal is to line the bottom of the loan file until they need someone to blame.
See you around the water cooler!