Good Riddance HVCC? Not So Fast Says Pro Teck

This week’s Open Season is in response to our column last week, NJ Appraiser Counts Down to the End of HVCC. Dear Anonymous: My name is Jeff Dickstein, and I am the Chief Appraiser at Pro Teck Valuation Services.  I have over twenty years experience appraising, and I work for an AMC. I read your post and can imagine if my business was down 78%, I too would be looking for answers.  You seem to believe that AMCs and HVCC are wholly responsible for the decline.  I believe more market factors were involved. The growth of national banks has played a large role in changing how appraisals are purchased.  Where once you had regional banks working with regional appraisers, now national banks need a system where they can get appraisals anywhere and assume some level of consistent quality. You wrote about your experience with one appraiser – imagine if you were a national bank that had to deal with quality issues on a national level.  My employer, Pro Teck Valuation Services has been around for more than thirty years because banks have seen the value in having a third party review appraisals for completeness and consistency.  We have always been there, and we will continue to work with national banks because they don’t want to become AMCs. And on the quality issue you brought up, Pro Teck scores all its appraisers on accuracy and completeness of appraisals – giving more business to our best appraisers and shutting off poor performers.  We also report any anomalies we see to state licensing boards, something I suggest you do if you believe the appraisal on your own property was lacking. Where I can see your business being impacted was with the collapse of the subprime market, the subsequent closing of many major banks’ wholesale operations and the resetting of the market to being dominated by FHA lending.  Mortgage Brokers’ share of the market has gone from 80% to less than 20% because of these factors.  And while HVCC made it more difficult for brokers to work directly with appraisers, the drop in your business had more to do with the contraction of wholesale lending and origination than HVCC. If you look at the “Mortgage Industry Implode-O-Meter, you will see that since late 2006, 384 major lending operations have “imploded.”  This includes Ameriquest, Argent, New Century, Options One and many other that were funding billions of dollars in mortgage loans on a monthly basis.  Anonymous, do you see any of your old clients, or lenders  that brokers sent loans to on that list? I can understand your frustration, but maybe with the market meltdown and rise of national banks it’s time to look at a new business model.  An appraiser, Charlie W. Elliott, JR., MAI, SRA, outlined the benefits that an AMC provides the appraiser. These benefits cost the AMC and take operating costs away from you  — wholesale versus retail.  While I understand the draw of the retail model, the market for the last thirty years has been drifting toward the wholesale model; the meltdown just accelerated it. The “sunsetting” of HVCC will not magically correct the global economic situation, loosen up credit, bring the housing market back, stop foreclosures, create jobs, bring back the 384 major lending operations that have imploded or restore the 78% of your retail business that has left. Again, I understand your frustration but felt I had to respond.  Pro Teck clients use appraisers for originations, servicing and review.  We have many opportunities for qualified individuals.  I hope you give us or another AMC a chance. Have an issue you want to sound off on? Email the editor.