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Clark Howard on the HVCC

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Lloyd Bonafide, Sep 1, 2009.

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  1. Lloyd Bonafide

    Lloyd Bonafide Senior Member

    0
    Jan 15, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Short video:

    http://www.wsbtv.com/video/20672122/index.html

    He makes some good points:

    * Post-HVCC appraisals are "junk"

    * Big banks are controlling the appraisal process

    * Inexperienced appraisers are working for "peanuts"

    *******************************************************

    I don't know about this one:

    * "Nincompoop" and "dumb" appraisers are using REOs for comps (???)
     
  2. VolcanoLvr

    VolcanoLvr Senior Member

    37
    Oct 30, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Washington
    Mr. Howard is a pretty decent syndicated financial commentator on many radio stations, but last I checked, he does not hold an appraiser license.

    What he is conveniently forgetting in regards to REO's, if he ever understood the concept, is the principle of substitution. If the only COMPARABLE properties to the subject are indeed REO/Short Sale, etc., than that is the 'market.' That is what is being purchased and should be considered for a current appraisal. "It is what it is."

    He is also broad-brushing our profession and regurgitating the position of the NMBA and NAR, and some appraisers. Not all appraisals under the HVCC are junk.

    And some experienced appraisers are also working for peanuts, just to survive in the industry.
     
  3. MDAPPR

    MDAPPR Member

    0
    Mar 10, 2009
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    "Nincompoop" and "dumb" appraisers are using REOs for comps (???)


    I guess you can call me dumb and put me in the nincompoop camp, otherwise in certain neighborhoods I would have to put "None" for comps #1 to #3 on the grid.:Eyecrazy:
     
  4. Bama Bayou

    Bama Bayou Senior Member

    0
    Oct 19, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Alabama
    I'm in that camp also. I suppose I should start appraising brand new never lived in beach front condos using the cost approach rather than using the brand new never lived in REO sales in the same building as comps (and listings).
     
  5. Truett Neathery

    Truett Neathery Member

    0
    Feb 16, 2003
    Professional Status:
    Licensed Appraiser
    State:
    California
    Sad


    What's saddest that some SRAs. Certified Generals and, for all I know MAIs are doing these AMC appraisals on SFRs, after journeying miles to take classes, turn in samples to be scrutinized, paying fees to worthless organizations that will not stand up to the politicians, all in the name of $200.
     
  6. Mike Garrett RAA

    Mike Garrett RAA Elite Member
    Gold Supporting Member

    56
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
  7. Bigrock

    Bigrock Member

    0
    Jun 6, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Georgia
    I saw a field review with additioal comps on one of my appraisal from some SRA through LSI and LSI charged $175.00 for a field review,I wonder what his split was,,what a frikin joke...

    Those letters are really helping him out...
     
  8. Pine Tree

    Pine Tree Junior Member

    0
    Aug 19, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Maine
    The REO/short sale arguement amuses me. It tells me the person speaking does not understand value cycles. What goes up.. tends to come down.. sometimes it floats gently down, sometimes it dives like a missle. Sometimes the market contains more debris that other times. An objective observer should consider the effect of debris, even consider that debris may be an alternative for market participant. Is more CE needed?
     
    Last edited: Sep 3, 2009
  9. normando

    normando Senior Member

    41
    May 2, 2009
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Appraisers need to use their knowledge whether REOs are suitable comps. When I use REOs, I would use more than 3 comps in my report. In my market, I notice REOs are getting near market prices because of high demand. Also, I generally put less weight on short sales because their market transactions take too long and so the market expects a lower price due to long close of escrow.
     
  10. mgalleshaw

    mgalleshaw Sophomore Member

    0
    May 10, 2009
    Professional Status:
    IT Professional-Appraisal Related
    State:
    North Carolina
    Thanks for the link. I hold Clark Howard in very high regard, but it's hard for him to be an expert in everything. That said, he has an amazingly clear view of the fox guarding the henhouse that is the HVCC and AMC structure.
    Regarding using foreclosures as sales, he probably needs a little more understanding of general theory behind how comparables are selected and analyzed. In another time, foreclosures were not used as comps because there were other comps plentiful and there is always a little bit of risk in a foreclosure sale that's not there in a straight-up negotiated sale. However, just because it's a sale in lieu doesn't mean the seller didn't market and the buyer didn't research it, especially when that is the primary type of sales in the market.
     
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