The third firm to be subpoenaed by the State Attorney General, eAppraiseIT, is based in California, despite the fact that they reportedly work on as many as 15,000 New York homes annually. That’s because they’re an appraisal management company that contracts appraisal work out.
“It’s effectively finding appraisers working for half the rate,” Mr. Miller said about management companies. “I’m all for competition, but they can’t do business without cutting significant corners. They get high volume because they turn paper around in 24, 48 hours.”
The firm is owned by the First American mortgage-service conglomerate; eAppraiseIT did not return calls for comment.
But our localized system isn’t perfect, either. For example, Vanderbilt Appraisal’s Web site has an affiliations page that listed Manhattan Mortgage as a “strategic partner.” (It was removed one hour after Mr. Fautley was asked about it by The Observer.)
“All that means is, sometimes they give us work—that’s it,” Mr. Fautley said. He added: “And I’m friendly with Melissa Cohn—that’s it.”
Does she get anything in exchange? “Absolutely not,” he said. “I do not accept pressure from anybody.”
But some do. “I think every state, to one degree or another, has some problems going on with this issue,” Mr. Brenan at the Appraisal Foundation said. “We’ve heard different people talk about possible solutions: They are anywhere from changing the way that [mortgage brokers] are compensated, or saying that only a disinterested third party engages an appraiser, and that the appraiser is made completely unaware of the specifics of the transaction, or what the owner thinks the property is worth.
“It would take a fundamental change in the residential lending system,” he added, “to bring about that kind of change.”