Blaming Appraisers

In answer to a question from a reader (Real Estate Q&A;, April 16), Robert J. Bruss has charged the appraisal profession with fee gouging, internecine warfare and, if I understand correctly, conspiracy to jeopardize the loan portfolios of all the mortgage lenders.

I would answer the first charge by saying the profession of which he is a member is considered standard reference on the topic; thus he may be a closet authority. I would agree that fees should not depend on the value of the property being appraised. But they do depend on the amount of time necessary to complete an appraisal.

Proceeding to his second charge, Bruss says, “Yet the appraisal societies are fighting among themselves.” That is true. They are fighting over the quickest way to enter government regulation Nirvana: become certified, licensed, sanctified and maybe rise to the rarefied ethical atmosphere occupied by the American Bar Assn.

His final charge is: “Ask most mortgage lenders, and you will find bad appraisals are the major cause of their loan losses.” There it is. Forget conventional wisdom attributing the national S&L; crisis to deregulation consequences, ineffective regulatory agency supervision and incompetent or dishonest management. The appraiser did it.

Most mortgage brokers or loan officers with S&Ls; live or die on commission income paid only for loans funded. Loans based on values documented and established by the appraiser’s opinion of fair market value. Does an appraiser work for them twice if he, in good faith, undercuts one of their deals?

DAVID M. CALLAHAN

Los Angeles

Callahan is an independent fee appraiser.