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feature SERVICING Or ig i nat ion s e r v ic i ng Blueprinting Appraisal Reform Why marshaling the right allies, approach, and strategic accountability measures are crucial catalysts to establishing effective housing policy. a na ly t ic s By Joan Trice First, there was a plan: to jettison scores of officers Gen. George Marshall considered dead weight. He then executed that plan by engaging the right people to do the right job. Part and parcel to his strategy: Gen. Marshall didn't just expect accountability—he demanded it. Absent that two-pronged approach—right plan, right people— the Marshall Plan could never have been the success it was. Unlike the esteemed general and his troops, however, we as an industry are in the midst of a post-mortgage crisis period without a plan and without any clear leadership. But like Gen. Marshall, if we align ourselves with the right forces and arm ourselves a strategic plan, we can attack the current housing situation head-on—and end up on the winning side. Plan on It I have had the privilege to work with the National Association of Homebuilders (NAHB) over the past 12 months as a consultant. You might think NAHB would be an unlikely ally in the battle to reform the appraisal profession. Not so. The organization recognizes that at the very core of the housing market is a broken collateral valuation process. This past summer, NAHB formed an Appraisal Work Group comprised of its senior leadership and members from the Collateral Risk Network. After several meetings, we developed a plan, "Blueprint for Appraisal Reform," that is still in draft form. Soon, NAHB will be reaching out to other stakeholders to garner broad industry support. Then the hard work to execute that plan will ensue. Foster the People I n the interim, what can industry leadership do within their respective institutions? Do as Gen. Marshall did: Engage the right people for the right job to do the right thing. Some lenders have adopted the strategy to outsource all things valuation. There is nothing wrong with that strategy, but lenders cannot outsource their policy, risk, liability, and accountability. So while waiting for a master plan, create one of your own. The appraisal process begins with the engagement of the right people. Know your vendors. Have the right processes and policies in place to remove any bad actors. Don't be shy about it. Be assertive and fair. Assemble the Appraisers T here seems to be a general hue and cry from appraisers that "a few bad apples have spoiled the whole bunch." State regulators are reluctant to destroy one's ability to earn a living. That is most unfortunate. Their role is to protect the public. They are not an appraiser advocacy group. When regulators don't perform their function, the entire system breaks down. Allowing unethical or incompetent appraisers to continue to operate is grossly unfair to those professionals who routinely do the right thing. But don't rely on the state regulators to do your job. An appraisal license is a minimum standard. It doesn't constitute due diligence. A The M Report | 53 se c on da r y m a r k e t A brief lesson in the history of World War II reveals a success story in the rebuilding of Europe during the fouryear post-war period. The goals of the United States were to modernize industrial Europe, rebuild a region devastated by war, remove trade barriers, and make the once wartorn country prosperous again.