Steven S. Albert, MAI, SRA is the Executive Vice President of Allstate Appraisal, L.P. a national valuation and appraisal review services company founded by his father, Warren Albert, SRA in 1959. Allstate Appraisal, L.P. was already one of the Chicago area’s largest independent providers of residential, commercial, and industrial appraisal services when Steve joined the company in 1986. In 1993, he took the company national, providing valuation and review services through a network of quality appraisers around the country, managed by a highly experienced team of appraisers and support staff. Allstate Appraisal, L.P. is a member of The Appraisal Foundation's Industry Advisory Council, a group of professionals that help advise the Foundation on appraisal qualifications and standards issues affecting the appraisal industry.

BUZZ: Your father started Allstate Appraisal almost 50 years ago, and you’ve worked there for 22 years. That’s a long time in the appraisal business. Why is that important?

Steve Albert: Allstate began as a family company, and even though we now have a national footprint, we’ve remained a family company in many ways. Our staff is incredibly dedicated to us, and we’re dedicated to them. The average tenure of our senior staff now exceeds 10 years, and most are young people. Our national operations manager has been with us 27 years, and is only 48 years old—that’s more than half of her life.  The same with our national production manager and national accounts manager—all here nearly half their lives.

That doesn’t mean there’s no new, young energy here. We’ve been able to be successful nationally because we’ve adapted, incorporating leading-edge technology and encouraging smart growth in everything we do. Because we are so loyal to our people, we’ve built an incredible team, stocked with former chief appraisers, senior review managers, secondary market experts and fraud investigation experts. Our core staff has diverse experience and a quality background, all in valuation and appraisal review. I think that makes us more prepared to handle this kind of market than many of our competitors.  We are not a typical AMC at all.

BUZZ: Will the recent agreement with the GSEs, OFHEO, and New York Attorney General Andrew Cuomo that establishes the Home Valuation Code of Conduct have an effect on your business? What do you think about the Code? Will it help combat appraisal pressure?

Steve Albert: If it unfolds the way it is written, absolutely. The character of the agreement sounds great. The stated purpose is to eliminate broker-ordered appraisals (a net positive for the industry), prohibit appraiser coercion (we all want that), and reduce the use of appraisals prepared in-house at the lender or by captive appraisal management companies.

At Allstate, we’ve always known that appraiser pressure begins with a request (or demand) from someone—and not with an appraiser being born evil and wanting to wreak havoc on the lending world. Appraiser pressure presents itself in so many ways, and not all having to do with value.  So anything that aims to address a situation that was both patently unfair and incredibly unethical will obviously have enormous positive implications for the lending and appraisal industries – all good in our opinion.

BUZZ: Of course, AMCs like Allstate stand to potentially benefit from this agreement, and many appraisers are concerned about working with an AMC. What would you say to them?

Steve Albert: I can understand that. If I was a sole practitioner who relied on local mortgage brokers for the bulk of my work, I’d be concerned that many of the business relationships I had painstakingly built will possibly end. I’d also be concerned that I was going to have to accept work from an AMC that pays what appear on the surface to be extremely low fees, coupled with (often) unrealistic service level demands of me. Not to mention the difficulty of forging any personal business relationships with massive AMCs.  The appraisal business has always relied, in part, on personal relationships. That is changing in many respects.

The best advice I can give is that appraisers need to forge relationships with AMCs who have a reputation for paying fairly, for treating you with professional respect, and for standing up for good work. In the wake of this agreement, it is certain that new AMCs will pop up, all representing themselves as the biggest, best and most amazing. But both lenders and appraisers should look seriously at those newcomers before they commit. The best AMCs are much more than a collection of high-level executives with varied industry experience and varying backgrounds. Like most new service businesses, it takes some time to maximize business efficiencies, and to implement best practices. You want someone with the infrastructure in place to assist lenders in making a smooth transition from traditional appraisal ordering practices, and for that AMC to be able to handle increased volumes without crumbling under pressure.

If they link with the right AMC, those independent appraisers may find the arrangement empowers them to do their best work. For example, at Allstate, we spend the time and money maintaining our relationship with the lender clients. Appraisers concentrate on valuations. Our system eradicates the pressure to hit a certain value; appraisers can do what they are trained to do with honesty and integrity without someone calling and threatening to take away the job. Your position with an AMC is not in jeopardy if your values are too low to fund the loan. You’re judged on your ability to do your job, not make the deal.

At the same time, AMCs are held responsible for work they have retained others to complete for them. Thus, we have to put each completed order through an intensive automated and manual internal review before we deliver to the lender/client, and this requires we maintain a large staff of highly qualified review appraisers. The AMCs handle all client challenges initially, and allow the appraisers to focus on what they do best—appraise. Despite the misgivings they feel now, appraisers may find doing work for lenders under the new code more liberating than before.

BUZZ: Will Allstate do more business after the Code goes into effect?

Steve Albert: We don’t know how this is going to unfold yet, but we’re prepared to meet the challenge if it presents business opportunities for us. This is not going to change the way we do business. If anything, the industry is coming to meet us. Companies like Allstate represent the solution to appraisal overvaluation and appraisal fraud. We deliver high-caliber valuation and review services to our clients, we have a killer staff, and we have the existing infrastructure to accommodate controlled future growth, without missing a beat.

BUZZ: It’s not an overstatement to say that AMCs have a bad reputation among appraisers. Is that fair?

Steve Albert: There is legitimacy to some of the complaints we all hear about some AMCs. Some AMCs may be a better fit to work with for one appraiser than another. But this can be said of non-AMC clients as well. AMCs are a hugely important resource for lenders and appraisers alike.

BUZZ: As a mid-sized company, how does Allstate stack up against the national giant AMCs?

Steve Albert: That’s a better question for our clients, but we do have a healthy respect for many of our national competitors and believe most share a similar level of commitment to this industry as Allstate does.  However, experience has demonstrated for us that it is simply more effective to focus how we are performing for our clients, and less on how our competitors are doing for theirs.