We have a very messy smelly soup brewing. It relates to certain federal governmental agencies promoting the appraisal industry to perform property evaluations (AKA – Home Inspection).
ASHI, the association of which I am a proud member, and its Board are doing everything possible to resolve this issue sensibly. However, ASHI will need your help. Since appraisers are not actively opposing these rules, it may fall upon inspectors to make enough noise to be heard.
With nearly 10,000 members, FREA is the largest professional organization for appraisers and home inspectors in the country. FREA provides Appraiser E&O insurance, Home Inspector E&O insurance, education, and other benefits to its members across the nation.
Brian Trotier, Executive Vice President at FREA, says:
If it were up to me, I’d have appraisers stick to doing valuation work and have inspectors stick to doing property condition assessments, but the truth is the lending community (led by HUD, the FHA, Fannie Mae, and Freddie Mac) are driving the bus on all of this and like the overall market they are over-reacting today due to their failure to act responsibly in 2005-2007. The pendulum always swings past equilibrium once it is put in motion.
The E&O industry was totally unaware of this until I accidentally overheard former ASHI President Marv Goldstein describing the situation to several ASHI members. I wish the insurance carriers were willing to step up and speak up, but so far, like the appraisers, the insurers are sitting silently.
The desire by the lenders to know more about the physical condition of homes is admirable, but looking to appraisers to do the evaluation is risky. Ideally, ASHI’s Board will be able to convince lenders to use inspectors to do this work, but it is an uphill task. Stay tuned for more…
Is the answer a uniform inspection standard across the US? Since the appraiser is performing an inspection can’t I save the money … just not hire a home inspector? Are inspectors and appraisers qualified/prepared to answer the question?
So…since my appraiser is performing the inspection, when my water doesn’t work after I move in, I’ll just call the appraiser, right? The problem: The appraiser’s E and O insurance doesn’t cover this scenario.
Listen to this recent “Eye Opening” FREA Webinar :: How to Navigate Regulatory Changes for Appraisers
What can inspector’s do? Contact your local association (if you have one) and make your feelings known and contact ASHI.org.