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Lenders asking for comps that are NOT comparable

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by marytt, Mar 16, 2009.

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  1. marytt

    marytt New Member

    0
    Jan 19, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Georgia
    Hello all

    What are you doing when lenders including AMC's are asking for comparables that are NOT comparable just to appease their underwriting guidelines of distance and time.

    I have a property in an area of town where sales are not abundant and there are no sales inside this small development in over 1 year. You have to travel 2-3 miles easily to find recent comparable properties.

    Recently I have had lenders tell me that my appraisal is unacceptable and that they need all comps within 3 months and 1 mile, which is basically impossible in this market. However they are saying just give us any sale you have within this distance and time guideline, give it NO weight in the appraisal and this way the underwriter or client (in the case of the AMC) will be happy and they may accept the report.

    This makes my skin crawl. I am sure you are getting this same thing from lenders. I tell them it makes no sense to add comps that have no weight and I am not in this business to make underwriters happy! I am here to value property and not MISLEAD the client with bogus comps just to make their guidelines work.

    It does not appear to be against USPAP, but I just wanted your take on this and what you do in these cases. If I must do this I will in bold letters advise this is NOT my choice, this is only for the lender at their request and these comps are unreliable in terms of the report. Even this makes me mad as someday someone is going to look at this report and say what the H E _ _ was she thinking and why did she not stand her ground instead of cater to them. This is what got us in trouble to begin with Appraisers bending under lender pressure.

    What do you think?

    Thanks so much for any input you have!

    m2:m2:m2:
     
  2. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    949
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    Put it in then write a caveat to ignore that info because it if used it is MISLEADING and is only included to pacify a UW. State that you did ignore it. Otherwise, this goes in all my reports and should go into your engagement letter.

     
  3. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    348
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    According to USPAP, you must not be biased. If taking the direction of your client for the selection of comparable properties, or any properties, results in a bias that favors your client, then you have violated USPAP.
     
  4. Elliott

    Elliott Elite Member

    120
    Apr 23, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Oregon
    My standard policy for UW requests that are stupid is they don't get done
    till the next day. Drives the processing people crazy.
     
  5. PropertyEconomics

    PropertyEconomics Elite Member

    1
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    USPAP also indicates that if a client has unreasonable assignment conditions you must simply decline the assignment. I believe these conditions are unreasonable and accepting them may also be a violation of USPAP.
    Someone will do it, and while I have issue with that as well, it wont be me and it shouldnt be you.
     
  6. saharabound2k

    saharabound2k Sophomore Member

    0
    Sep 30, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Michigan
    In a separate letter I restate their request and probably a lot of my addendum which was not read in the first place and add something similar to this:

    "The research performed for this file was deep and wide covering adjacent neighborhoods/communities (where applicable), and is further filtered by the appraisers well schooled knowledge of the area which utilizes data from only those areas within each deemed to be viewed on a par with the subjects location and marketability. Unfortunately, at this time there were no more recent sales better suited to establishing the subjects market value than the ones presented in the appraisal. Furthermore, adding comparables to a report that require excessive gross/net adjustments due to large variances in size, site, age and design/appeal/condition (use whats appropriate) would not produce credible results and only further distort the process for which I was hired".
     
  7. fifteen

    fifteen Senior Member

    0
    Nov 15, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Washington
    Terrel: That's good, I'm going to use it or a very similar variation.

     
  8. William K

    William K Senior Member

    0
    Sep 21, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    I have begun addressing this with a statement on the same page as the additional sales they want me to provide.

    "The underwriter/ lenders representative is attempting to provide professional assistance in regards to the selection of Comparable sales. The Underwriter/ Lenders representative has requested the inclusion of the above sales which they thought to be comparable to the subject. These sales have not been given weight in My final opinion of value but have been included at the request of the lenders representative"

    Always get the request in writing before proceeding.

    And I charge for the inclusion (gridding) of sales which were not comparable and were not given weight in MY opinion of value
     
  9. Jerry Bone Jr

    Jerry Bone Jr Senior Member

    0
    Feb 23, 2004
    Professional Status:
    Licensed Appraiser
    State:
    Oregon
    Marytt, unless you just got your appraisal license yesterday, you should know a lender will want exactly that. Either way, now you know.
    Suggestion; use whichever sales that you need to form an opinion of value and use whichever sales you need to meet the lenders requirements.
     
  10. fifteen

    fifteen Senior Member

    0
    Nov 15, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Washington
    Could it be they want their AVM to update with actual use of AVM comparables? And that's why they insist on their inclusion? I just say NO, but then again, I don't hve many clients due to my attitude
     
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