Forsythe Appraisals Think Tank Event Attracts Top Decision-Makers to Capitol Hill.

 

Washington , DC --Some of the appraisal industry’s top decision-makers arrived in Washington DC last week to participate in Forsythe Appraisals’ first annual Chief Appraiser Think Tank event.

 

Held at the historic Hotel Monaco located in downtown Washington DC , the two-day event was geared toward understanding and addressing the needs of senior-level appraisal professionals while providing a foundation for consensus and impetus for change within the industry.

 

The esteemed group of 33 participants included chief appraisers from across the country along with prominent industry experts from the DC area including Jacquie Doty, of Freddie Mac; Mary Jewell, of Morgan Stanley; John Rasmus, of the American Bankers Association; Bill Garber, of the Appraisal Institute; and  representatives from the Federal Reserve and the OCC.

 

Alan Hummel , Forsythe Appraisals’ senior vice president and chief appraiser, served as moderator for the event.  “The primary objectives of this event were to facilitate the sharing of insights and issues and to identify key take-aways that could be implemented within our respective institutions. The “Think Tank” format worked exceptionally well in terms of generating intelligent, candid discussion with potential outcomes and resolutions.”

 

“We’re very excited and impressed with the sincerity of the participants and their eagerness to drive change within the industry,” said Tim Forsythe, chief executive officer. “It was evident from the start that this group shares the same passion and commitment to achieving and maintaining the highest quality standards.”

 

A variety of emerging industry trends and issues were discussed throughout the meeting. Among them: appraiser training and mentoring, regulatory issues, fraud, and the use of AVM’s.

 

A significant portion of the discussion was also dedicated to the lack of appraisal independence which was described as a growing industry threat to financial institutions, secondary market investors, borrowers and appraisers.

   

“Ensuring appraiser independence—specifically with third party brokers---is a major concern throughout the industry,” said Hummel.  “Our goal is to raise awareness of these concerns and find solutions.”

 

One of the suggested solutions discussed was the development and enforcement of engagement letters that would be included with every loan.  “It could be used to compare what the appraiser did and what he or she was asked to do,” said Hummel.  “Essentially it would require accountability on the part of the person ordering the appraisal.”

 

 Better promotion and distribution of appraiser “hot lines” and guidelines were also suggested as potential solutions along with the development of nationally regulated, “Do Not Use Lists” with the participation of all major lenders.

 

According to Hummel, one of the most confounding problems for both appraisers and users is making certain that an appraisal was actually prepared by the individual whose signature is shown on the report.  “In an era of rapid technology advancement, signature fraud is on the rise. There is a significant need for a system that will allow both the appraiser and the lender to conclude definitively that the appraisal report received was completed by the signing appraiser.”

 

During the meeting, one of the participants proposed the development of a National Appraisal Registry which would significantly reduce, if not eliminate, signature fraud.  The National Appraisal Registry would be an extension to the Appraisal Sub-Committee’s license registry system.

 

Proposed policy shifts of federal banking regulators were also discussed. “Regulators are pushing for third party management of the appraisal process to reduce undue influence,” said John Forsythe, President of Forsythe Appraisals. “They want the lenders to have controls in place so that they know how the broker ordered the appraisal. They are also much more aggressive in pushing states to ensure they live up to AQB requirements,” he added.

 

The use and effectiveness of AVM’s was another popular topic. Most participants concurred that their viability as a successful evaluation tool depends largely on the person who is doing the analysis.  “As the use of AVM’s steadily increases, we need to be diligent about our training and testing efforts,” said Hummel. “While AVM’s provide useful information, they are definitely not a “one size fits all solution.”

 

 “The event exceeded our expectations on every level,” said Tim Forsythe. “We’re thrilled by the positive response we’ve received and what we were able to accomplish.  Collectively we identified problems that are inherent in the appraisal industry and were able to outline some potential solutions for them.  Our goal is to continue to facilitate discussion and consensus until the issues are resolved,” Forsythe added.

 

Forsythe Appraisals is planning on hosting a second annual Chief Appraiser Think Tank event which will be held in the fall of 2007. A similar event, targeted exclusively towards appraisal management companies, is also being planned.

 

Headquartered in St. Paul, Minnesota , Forsythe Appraisals was founded in 1940 by the grandfather of the Company’s current CEO and President.  Forsythe Appraisals currently operates 37 branch offices nationwide, serving 20 states.

 

Forsythe Appraisals, LLC is owned and managed by John and Tim Forsythe, together with John and Jeff Turner, founders of Hillcrest Capital Partners (HCP).  Located in Minneapolis , HCP was established in 2002 as a private investment firm to make control investments in high quality businesses based in the Upper Midwest .

 

 

 

DATE: October 9, 2006

CONTACT: Deborah deLambert, Forsythe Appraisals

PHONE: 612-269-2296

E-MAIL: dedd@forsytheappraisals.com

Back to Press Room